[ Page 1563 ]

CONTENTS

Routine Proceedings

Industrial Relations Reform Act, 1987 (Bill 19). Committee stage. (Hon. L. Hanson) –– 1563

Mr. Gabelmann

Mrs. Boone

Mr. Clark

Mr. Miller

Mr. Harcourt

Hon. Mr. Parker

Mr. Lovick

The House met at 10:05 a.m.

Prayers.

Orders of the Day

HON. MR. STRACHAN: Mr. Speaker, I call committee on Bill 19.

INDUSTRIAL RELATIONS REFORM ACT, 1987

(continued)

The House in Committee on Bill 19; Mr. Pelton in the chair.

On section 25 as amended.

MR. CHAIRMAN: The member for North Island.

HON. MR. STRACHAN: Did you dream about this?

MR. GABELMANN: As a matter of fact, yes.

Mr. Chairman, just while I catch my breath and organize my notes, I want to this morning, in continuing the discussion on section 25, which is the so-called double-breasting section.... I would argue that the term "so-called" should not need to modify the noun.

I want to refer to a series of cases, some of which I'm still trying to lay my hands on photocopies of. But before doing that, I want to make five points about the wording proposed by this amended section 25.

The first point is that there have been repeated Labour Relations Board decisions that the word "operational" in front of the word "control" is in fact a redundancy, and that the amendment that we debated yesterday to eliminate the word "operational" as an adjective modifying "control" is, in fact, an absolute irrelevancy. I made that point in passing yesterday, but I wasn't as convinced enough in my own mind that I could make the point without fear of contradiction.

As a result of some work I've done overnight and again this morning, I am convinced — and I think any member who reviews Labour Relations Board decisions on this question would also be convinced — that the deletion of the word "operational" as a modifier of "control" is, in fact, absolutely irrelevant. Board decisions say that "operational control" means exactly the same as "control."

So no value in diminishing the potential impact of this section in respect of allowing more double-breasting is achieved by that particular amendment, and that point has been made to me by several knowledgeable people, including one particular lawyer who is probably the most knowledgeable person in British Columbia on section 37. He basically makes a living from section 37 — and section 53, but certainly from section 37.

He cited case after case, which I don't intend to go through this morning. But I feel comfortable in asserting without fear of any contradiction that the deletion of the word "operational" will not have any impact whatsoever in respect of future Industrial Relations Council decisions in determining whether or not control is being exercised by individuals in a company.

The second point I want to make relates to the change of the disjunctive word "or" to the conjunctive word "and." I think I made this point yesterday, but I want to repeat it this morning. As a result of this change, you now must demonstrate some element of control as distinct from management or shareholding or financial power. You must now also show that the firm, the operation, is being managed by the same people. You must do both. To put it more simply, you must demonstrate both because of the word "and." Where previously you only needed to demonstrate either control or direction, you now must demonstrate control and direction. I make that point because it is important in respect of decisions that I want to refer to later on in this debate on this section. I will come back to that in detailing those particular cases.

I had some trouble yesterday in attempting to sort out what the word "same" meant in terms of this amendment, as opposed to what was previously there, the word "common." The member for Nanaimo had helped me along in that particular case, but I didn't feel comfortable. I will confess, Mr. Chairman, that yesterday, following the debate on this section, I evaluated what had happened and I decided that I had not convinced myself, that I had not won the debate in my own mind in terms of making these points, so I went through this again and sought additional information to see whether or not in fact the assertions we were making were correct.

Now, convinced as a result of that work that in fact those assertions were correct and are correct, "same" in legal terms, I understand, means you must have a perfect matching. "Common" does not have the same preciseness of definition. In arguing in favour of a declaration of common employer, a union would have to show that the style or the type of control is precisely the same for each company. That would be a requirement. They would be required to demonstrate and to in fact prove — not just to demonstrate but to prove — that the style or type of control is precisely the same for each company.

I make that point because it, too, is important in respect to some of the cases that I want to refer to. The example in that case is that a unionized company could escape its collective agreement, which is what double-breasting is all about, by simply having a second company with the same management team, but exercising control in one company by shareholding and in another by financial influences. In other words, by exercising the financial management in different ways in these two companies. It could be the same management team, but the two companies could be organized with a different financial structure and therefore quite clearly could escape because of that different financial structure.

[10:15]

I'm told, and I have no reason to disagree, that it will be simple for companies to devise schemes to get around section 37. Whenever companies establish themselves, or whenever additional spinoff companies are being established, whether or not it's with the intention of evading some responsibility that might be placed upon them by labour legislation — or other legislation, for that matter — companies, if they're smart, go to a lawyer.

In the past, when companies have gone to lawyers — and Wills Enterprises is a good example of this one — to seek advice as to how to avoid the constrictions, as they would see it, of section 37, they've been given such advice. In the case of Wills Enterprises, they failed in an effort to escape from section 37. Those same companies would do the same thing today. They would go to their lawyers and would be given

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advice as to how to establish different financial control as, for example, being one way of avoiding the requirements of section 37, and would establish the companies on the basis of that advice, which would then enable them to escape simply and easily from this existing proposed language.

There are three cases in recent years that went to the Labour Relations Board — celebrated cases, and people who are involved know the names: Comet, Zagreb and Wills. In each of those cases — if my memory is correct, in Zagreb it came by appeal and not in the initial decision — finally the double-breasting attempts made by those companies were not allowed by the Labour Relations Board. In each of those cases double-breasting would now be allowed by the language being proposed.

These are all cases related to the construction industry. The same arguments and the same avenues of escape exist in industrial settings. I think the concern is expressed yesterday in a telegram sent to members of this House — or at least to the minister and me, and probably others — by the president of the IWA, Jack Munro, about the potential being now wide open for contractors escaping their legal obligations to operate union, particularly on the coast, where most of the logging in fact is done by contractors.

It's not particularly wide open, under this section, if a contractor has millions of dollars of owned investment. If he owns his own tower and equipment, it will be difficult for that contractor to escape section 37 –– I would argue that it would be difficult — not impossible, but difficult — because it would require a transfer of assets in a major way. It will be done and it will attempted by some of these operators; I have no doubt of that in my mind. But if a contractor leases his equipment, he will have no difficulty whatsoever setting up different companies under different financial management, thus escaping the prohibitions under the new law, from having this new company lease equipment as well. That will lead to the situation that the union is concerned about in terms of deunionizing the logging on the coast. I must say that contractors — good employers who have union agreements — are also concerned about that particular potential.

The concern is, at the present time.... And I won't digress too much here, but it's important, I think, and the Hopwood report, which the Forests minister knows about, is clear evidence of this. At the present time the contractors are being expected to do their logging at 25 percent less cost than the majors are expected to do their logging. As a result of that, there's a requirement to cut costs. How do you cut costs? You do it in a variety of ways, but the best way is to be able to deunionize. So if you're a logging contractor, what you can do, from your major logging contracting company, your primary operation — to start with, to make it simpler — is sell your equipment and lease it back, in the same way that B.C. Ferries has sold its fleet and leased it back, or parts of it. It's a common and an increasing business operation these days. Cash flow problems are aided, or cash flow management is handled more effectively, by leasing in many instances. But now there's an added incentive for this leasing, and that will be that you will then be able to establish another company with separate financial control. In other words, you may set up one of which you're the manager and the full owner, but for the second one you have a different corporate structure. I don't understand corporate law, so I don't understand how to define how it will be done, but it's done commonly and will be done to achieve this purpose.

You can then have this other company lease that same equipment or different equipment, begin to phase out your primary company and begin, with this new non-union company, to take over some of the work that was available and was being done originally by the unionized contractor. That is a clear loophole, given decisions about the words that we are now faced with. That's why there's a concern that in order to cut these costs, logging contractors will feel obliged to move into non-union operations, will feel obliged to hire less skilled workers at lower wages without union protection. Anybody who has any knowledge — as most members of this House do — of the logging industry will know that it's a dangerous industry; it regularly kills 35 people a year....

I see the red light on, and since I need some more time I'd ask the member for Vancouver East (Mr. Clark) if he has anything to say.

MR. CLARK: Before I do that, I ask leave to make an introduction.

Leave granted.

MR. CLARK: On behalf of the two members for Nanaimo — I might say it is appropriate to make this introduction because I was born in Nanaimo — in the precincts today are grade 10 students from Ladysmith Secondary and their teacher, Mr. Doerr, and I ask the House to make them welcome.

MR. GABELMANN: I didn't know that an introduction would be treated as intervening business, but I guess it is. In any event, if it wasn't we'd find another mechanism, as you know.

The concern, obviously, in an industry which kills in terms of 30 or 40 people a year at the present time, is that if you do go non-union and you do end up with less skilled people working, particularly in falling, but in yarding and many other parts of logging as well, you're going to find that these less skilled people are going to end up killing themselves more regularly than they do now. That's not the only concern; there are all the economic concerns about the downward spiral in wages and all of that. But I'm not going to make those kinds of arguments, because this morning we want to talk more technically about the real meaning of these words. I'm quoted as saying that I've given up any hope of persuading the government in terms of making these arguments, and that's an accurate quote, but I must say that I still hope that if the minister does not want to allow for double-breasting, he will listen to these concerns and act upon them. The simple way of acting upon them would be to go back to the existing language of the Code, which already allows in many instances for various kinds of double-breasting.

To get to some of the language of the law, I referred yesterday to the CCAG case, February '86, which was an application, and I referred to it by talking about Peter Gall's application for a different interpretation of section 37, which was denied by the LRB. I didn't quote the best part of the summary of that judgment dated February '86. Just so that the case is on record, I think I said it yesterday, but it's 32-86.

The board said: "If the board was to restrict itself to one criterion, entities which were in fact under common control or direction would be able to escape their obligations to trade unions and to frustrate or defeat the rights vested in those trade unions and the employees they represented." With all

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due respect to everything we said yesterday — all of us on this side of the House — this is the most important sentence that has been entered into the debate so far, and for that reason I want to repeat it, with some emphasis. The board said: "If the board was to restrict itself to one criterion...." Now in the new language — not to digress, but to make the point — the board can restrict itself to one criterion for several reasons, most importantly because of the change of the word "and" to the word "or." So if it's able to restrict itself to one criterion, the board says,"...entities which were in fact under common control or direction would be able to escape their obligations to trade unions and to frustrate or defeat the rights vested in those trade unions and the employees they represented."

That is a clear declaration from the board that had the language of the Code been different in 1986, they would have had to allow for double-breasting in those circumstances. In my words, if the board was required to consider only one criterion, then legally certified companies would be able to escape their certification.

It's a clear, absolute and forthright declaration from a board which had purposes and objects which were more friendly toward trade union organizations than the new council will have, and from a board which, although it was attacked by many trade unionists for being biased over the last few years, was relatively close to some kind of neutral agency in labour relations. Given the other changes in the Code, and particularly the purposes and objects, there is not the same degree of confidence that the new council will be able to come at these issues from the point of view of protecting those collective rights, because now the individual rights are more important and the market economy is more important. So this new council will not only have the wording that we're talking about in this section, which will clearly require them to allow for double-breasting in situations where heretofore it was not allowed, not only will it be required by these wordings, but it will be encouraged by other sections of the bill to move in that direction as well.

[10:30]

I want also to quote from another decision of the board, Armeco and S.G.M. Construction, LRB 239/84. The board identified in that decision four issues. I will just read from the summary again the facts of the case. S.G.M. Construction argued that the original decision was inconsistent with the principles of section 37. This was an application for reconsideration of a board decision, and the construction company was arguing that the original decision was inconsistent with the principles of section 37. The original panel of the board had held that four prerequisites to a section 37 determination had been met. These are the four: "(1) There must be more than one entity carrying on business; (2) the two entities must be under common control or direction." I am not going to do justice to this family name, the Malekyazdi family — I am sure it is pronounced in a much more sophisticated manner than I have managed. That is the second of the four issues. " (3) The two entities must be engaged in associated or related activities...and (4) there must be a labour relations purpose to be served...." — by granting the application in this case.

The application was for declaration that Armeco and S.G.M. were common employers. The application was granted. The board said: "Here are the four prerequisites that were in place which enabled the board to make a decision that they were, in fact, a common employer." Those four prerequisites are no longer required under the law, and as a result of that — I don't think I need to repeat the argument in terms of single criteria now being sufficient to deny a common employer declaration — it is clear that the test is less. It is clear the test is considerably less.

I could quote further from the reasons for that judgment, but I won't in respect of the time that is involved. There are other cases which I want to talk about. I referred to them in passing: Zagreb Construction, Wills Enterprises, Comet Drywall and some comments on page 20 of the Concerned Contractors Action Group, which was the summary that I referred to earlier.

But before I do that, members will understand that I have just had these cases brought into the House, and I have not had an opportunity to read them. I know the member for Prince George North (Mrs. Boone) would like to have a few words on this particular subject, and there is one case which I will detail more technically later on.

I just want, if my memory is accurate on this subject, to summarize in general terms. This is a common kind of case that exists, where a contractor sets up one of his trusted employees, a senior employee in another business. The contractor's union.... He sets up in another business one of his trusted employees who operates out of the same office, uses the same equipment, uses the same facilities and assets that are available to the original contractor. This new company is non-union; it's operated by this "trusted employee."

Then an arrangement exists between this trusted employee and the original unionized contractor. The arrangement usually, and in one case precisely, goes along these kinds of lines. An agreement is reached by which, in this one case I'm referring to, 5 percent of the gross revenue of the new company, the non-union company, is the fee for service for using the equipment, the office, the facilities and everything else of the original company and, of course, for all of the work that's funnelled to this new, non-union company. Now 5 percent of the gross, as you can imagine in contracting, is a pretty hefty chunk of money. That 5 percent of the gross goes to the original union contractor from the "trusted employee" who operates non-union and who is being funnelled business from the union contractor.

Now that's a standard way of evading section 37. For a while, back in 1979 in particular, there were successful applications. Brian Foley, who was then on the board and who is now with B.C. Rail in an industrial relations capacity, made decisions that moved the board in a direction that was new to it, and it was allowing these kinds of obvious double-breasting situations. Subsequent to that, Stephen Kelleher, in his time as chairman of the board, got hold of that issue and moved it back into a different direction so that those kinds of obvious transgressions, those obvious kinds of deliberate attempts to evade section 37, were not allowed, or not allowed as readily as they had been in 1979.

Clearly without any fear of contradiction I can say that with the new language, that situation and more will be wide open, and it will be available not only in the construction industry, on which I have primarily focused, but also across the whole of our unionized workforce and workplace sector. The availability will be there, wide open, simply by establishing different companies with different financial management or control or a different style of management control, or by establishing dummy sub-companies that are operated by a "trusted employee;" and then you skim off some of their

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gross — 5 percent has been a rule of thumb in the past — and double-breasting is wide open.

I guess I want to conclude with this point: if the government wants double-breasting in British Columbia, it has achieved it. If it doesn't want it, it should change the language of this proposed amendment.

MRS. BOONE: Yesterday when we heard some debate from the members from the other side, it became clear, I think, that many of them really believed this section does not allow double-breasting. I'm hoping that through the debate today, through listening to my colleague from North Island when he is making some very good cases, you will realize that this section truly does allow double-breasting. As my colleague has stated, if in fact this is what you intended to do, then you have achieved it. But if you haven't intended to allow this double-breasting to occur, then I hope that some of us on this side can show you just how it will occur and that it does allow double-breasting.

The fact is that with this section, a very small corporation or a small reorganization of a corporation, with slightly different management structure, under the same ownership as a union firm, would be all that's required to break that union. That company would then be allowed to bid on a non-union basis on contracts. Now it doesn't take too much of a genius to understand that when you're competing with firms that are non-union and do not have comparable wages — as one of the members opposite indicated, and I have forgotten which one it was, people come from outside the province and do not pay comparable wages — it's not going to be too long before that company is doing all of its bidding on the basis that it's non-union, and the unionized section of that company would very soon be left out. That would lead to the destruction of the trades.

The one I want to focus on right now is the construction industry. There is no doubt in my mind that this portion of the bill, when you couple it with many of the other portions as well, will completely deunionize the construction industry. I know that many construction companies out there are looking for this bill to do that very thing. They're trying to compete. They're competing with non-union companies that often come from outside the province, and they are not paying comparable wages. The unionized construction industries are having a tough time of it. There's no doubt of that. There's no doubt that when members say, "This will save the unionized construction companies," I think what they mean is that it will save that company; they don't mean that it will save the unionized section of that company. Double-breasting will end the unionized section of that company. There's no doubt in my mind at all.

I've talked to many companies, and we've agreed to disagree on this section. The unionized companies that I've spoken to are happy with their unions; they're happy with the standards that they have with their unions. Their concern is about competing. They aren't able to compete, as I said before, with non-union people who are able to go in and constantly underbid them.

One of the concerns they are bringing up is standards, and I don't think that has been addressed at all in the legislation. The construction industry is saying there is nothing out there to regulate standards for the construction companies. Anybody can come in and get a business licence, formulate a construction company and go out and bid on jobs. They do not have to have come from a construction background. They don't have to have any knowledge of the construction industry. All they have to do is form a company, and go out and bid on jobs. That's what this province will be led to in the future, without having the unionized construction industry out in force.

The construction industry is looking for some direction on that, and I hope that the ministry does address that situation and come up with a licensing procedure so that companies are able to ensure that their colleagues that come into the construction field do have adequate standards, do have an adequate background, and are able to ensure that the public is getting what they are paying for. Right now there is nothing out there to ensure that. I can assure you that there won't be, once this double-breasting procedure is allowed and non-unionized companies can come in. They do not have to have qualified trades people. They do not have to ensure any standards. We will see companies out there bidding on contracts to build highways, roads, bridges and what have you, that do not have qualified trades people, that do not have the necessary people there.

AN HON. MEMBER: Nonsense.

MRS. BOONE: It is not nonsense, because it is happening right now.

Double-breasting, in the construction trades in particular, as I stated, is certainly going to end the unionized section there. The implications to the province are pretty wide-ranging, though. As I say, there's no doubt in my mind that we will have a lowering of standards. When we try to compete with the non-union sector outside the province, when we start to lower our standards and lower our competitiveness in order to get into the area.... They will have lower wages, and that's the full implication. That's the full reason that they want the double-breasting, so that they may pay lower wages, so that they may compete with those outside the areas. And this certainly is not going to be good for the rest of the province. You've all received one of these, I'm sure. It's an economic analysis of B.C. put out by the B.C. Central Credit Union. In there they state:

"While real wages and salaries of the average working person in B.C. have declined since 1982, the extent of the decline differed among industries. With more non-union labour being employed in the construction sector and more part-time labour employed in the services sector, average wages in these two industries declined the most in real terms. In addition to falling real wages, personal taxes at the federal and provincial levels have also increased over the same period, leaving an even lower net real take-home pay for most British Columbians."

It's here. The non-union sector does lower wages. You can't expect to have high wages in the non-union sector of the construction industry.

[10:45]

It also goes on to state the implications for the province as a whole. With the wages of the province as a whole declining, it says:

"Although this decline is not unique to B.C., it is only in B.C. and Alberta that total real wages and salaries have fallen almost yearly since 1982. Because wages and salaries contribute over 70 percent of total personal income, this has meant an erosion of buying power of B.C. consumers."

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Over and over again, we heard in the budget, Mr. Chairman, that what this government was trying to do was to put money back into people's pockets so that they could afford to buy things, so that they could get our economy going again. That's not happening. It says here that the federal and provincial governments are taking more in taxes, yet we are making provisions so that companies can pay people lower wages, which in turn will take money out of their pockets, take away their buying power, and certainly not help any of your private sector businesses out there that are struggling to make ends meet. They will not be able to purchase new cars. They will not be able to purchase new TVs, videos, clothes, in many cases, and their standards will go down. This, Mr. Chairman, is what double-breasting will lead to in British Columbia.

When you tie this section of the bill to other sections of the bill that are obviously meant to deunionize this sector, it is meant to lower wages, to make us competitive with Taiwan, Korea and the other countries out there that do not pay any standards of wages that we would consider acceptable. When you tie this in with this section here, it is obvious that the implications for the province of B.C. are going to be very great. It's not just going to be affecting the workers, it's going to be affecting all the private industry people and all the businesses.

As I stated earlier, I honestly think that many people, and I know the member for Columbia River (Mr. Crandall).... I saw him on TV, and he stated that this section does not allow double-breasting. He stated that, and I think he probably really believed that. I hope, through the discussions — if you're listening, please — you will realize that it does allow double-breasting, that double-breasting will take place, and that this is going to have an effect on our province.

Many of the members stated yesterday that they really are pro-union; they're not anti-union; they don't want to see the deunionization of our province. If that's true, then please pay attention. Do not pass this section. Do not allow this type of thing to occur in our province.

HON. L. HANSON: Mr. Chairman, it's very interesting listening to the debate as it goes on, and I guess it's obvious that we have a difference of opinion in some things. I think the member for North Island (Mr. Gabelmann) was suggesting the deletion of the word "operational" from this particular section had no effect at all. I have some difficulty in accepting that, because we recognized, with good advice, that there may be an indication with the word "operational" there that it would prohibit the IRC from having the ability to look at the financial control of the corporation. Operational, to me and to other people I've discussed it with, could be construed as a mechanical relationship to another company. We believe, with the deletion of that word, that it does give the IRC the ability to consider the financial side of it.

It was interesting to hear the member for North Island say that the Labour Relations Board, as it exists now, is more friendly to labour than the new council. I have some difficulty in understanding that, because the new IRC hasn't been put in place yet, other than our indicating who we would be choosing for commissioner. I think the member for North Island also suggested that in section 27 he was assuming, and made the statement, that individual rights and the market economy are more important than the other aspects of the objectives in that section. It appears to me, in that section, that we are trying to ensure that individual rights and the market economy, as well as a number of other things, are considered. But I don't think there's any indication that those two particular issues are emphasized or underlined, or are the two most important issues in the objectives.

It's interesting to hear the member for Prince George South talk about expertise....

AN HON. MEMBER: North.

AN HON. MEMBER: South next time!

HON. L. HANSON: Prince George is a beautiful city, whether it's north or south; I think you recognize who I was speaking of.

It was interesting to hear the member suggest that expertise, with this change to section 27 as it relates to the construction industry, is going to diminish and contracts are going to be let to people who, I guess if you want to go to the ridiculous, are clothing-store operators and are now in the construction business.

I think that there's a very important aspect of that that's not being mentioned here. We should always remember that there is someone who is letting that contract, and the government or the individual or whatever the entity is that is contracting to have work done would certainly be very concerned about the ability of the people they are contracting with to do the job. I don't think that price is the only consideration. We all do that in our day-to-day lives: when we go to get some service, we look at whether the service we're going to get is what we expect and of a standard we expect. I think there's ample protection in the people who are letting the contract determining first of all that who they are letting the contract to does have the ability to do the work. There are many methods of determining that. In most situations, where there are contracts of a substantial amount particularly, there are bonding and other things required to ensure that the performance is there, and usually in the terms of the contract the standards that are expected are very clearly laid out.

I reiterate that it's not our intention to allow widespread double-breasting. We certainly don't intend to allow an employer who is unionized to evade his responsibilities. I think we do want to see the ability of some of those people in business to invest and go into other businesses, but certainly not to allow them to frustrate or defeat the legitimate bargaining rights that have been achieved by their various trade unions.

The member for North Island (Mr. Gabelmann) was suggesting that there were four prerequisites cited by a decision of the board, and I certainly wouldn't argue with that, but those prerequisites flow from the current Code. When we look at those decisions — the interpretations that have been developed by the board — we always have to remember that they were developed by the board under the current Code, and I would suggest that the new Industrial Relations Council will also develop its interpretation of the various acts. There is no question in my mind that that interpretation will prevent the employers from avoiding the rights and responsibilities that they have relating to any collective agreement they may have. But we also want to say that we want to give those employers the opportunity to start new businesses, create more employment and so on. Again I would point out that there is absolutely no reason why those new entities cannot be organized if the employees of those new entities so desire.

[ Page 1568 ]

MR. CLARK: The minister repeatedly said, and said when he first introduced the bill: "We don't allow double-breasting." He said it again now; he qualified it: "It's not our intention to allow widespread double-breasting" — so just a little bit of double-breasting, but not widespread. He said that it's not the intention of the government to allow construction companies to evade their responsibilities under the collective agreement. The question then is: why change it? The only reason for changing this clause is to make it easier for companies to start non-union subsidiaries or to double-breast. Why in the world would you change it, then? I mean, if there's no rational reason, if the minister keeps saying,"It's not our intention to double-breast; we don't want to allow it; we're not going to allow it; the changes don't allow it," why in the world would they change this section? The only reason to change this Section is to weaken it and make it easier to evade collective agreements. That's the only reason.

I want to talk a little bit about why this is important to the construction industry particularly, because I think the construction industry is unique and these clauses have particular importance. I think the members should recognize that in a typical industrial setting, workers who have collective agreements have seniority. They're protected by seniority language. Secondly, usually there's a fixed plant or a mine or something that can't be moved. So the operation is fixed in one spot, and the workers are protected by seniority rights. The construction industry doesn't have that. Most people don't seem to realize that unions and people working in the construction industry don't have any seniority protection at all. So what they've done is have hiring halls to attempt to provide security of employment for construction workers in a mobile industry.

The second thing that's done, because of the mobile nature, is that there is legislation that deals with double-breasting, to deal with the two problems of people working in the construction industry: number one, no seniority, and number two, the mobile nature of the industry. So we have double-breasting legislation, under the old Labour Code, that said that a unionized construction company could not set up a non-union company on the side to compete and move work to the non-union sector to circumvent the collective agreement. Otherwise the logic is clear: you unionize a construction company, and all the owner has to do is spin off a non-union subsidiary and circumvent their collective agreement with their employees. It thwarts the whole purpose of joining a trade union, and defeats any organizing potential in the construction industry. That's why we have double-breasting language. That's why we don't allow those non-union spinoffs in the old Code.

[11:00]

This law makes it incredibly easier. The minister says he doesn't interpret it as that it will be any easier, but the case law referred to under the Labour Code has certain tests, and the new language defeats those tests. Under the old Code interpretation, this makes it easier. The minister says: "Well, we don't know how the new IRC will interpret it. All we know is how the old Labour Code interpreted it." If anything, I suggest the new Industrial Relations Council will be worse, because there will be no labour participation on it, and therefore no labour appointees.

But even if you say that all that went before in the Labour Code doesn't apply, then let's look at where they have that language. They have that language in the United States — very similar if not identical language — "the same control and direction," and there it's wide open. The American jurisprudence, with the same language, allows double-breasting.

By any test of the impact of this legislation, it is to weaken the existing provisions. The minister has repeatedly — section after section — said: "That's not our intent." Even if we accept on good faith that that is not the minister's intent, that doesn't mean anything, because the reality is that certain consequences flow from certain language in legislation, and the experience in the States and in the existing Code demonstrates that this language weakens the protection of unionized employees in the construction sector, by allowing union companies to spin off non-union subsidiaries.

The one test that is most critical is the financial test. We're probably all familiar with the Pennyfarthing case. The Pennyfarthing was owned by Stevenson Construction, a unionized construction firm, and the construction unions attempted to have Pennyfarthing declared a common employer under this section of the Labour Code, so that the collective agreement would prevail. The reason the labour board turned down the union's attempt to have Pennyfarthing declared the same as Stevenson Construction, and therefore covered by the union collective agreement, was that Stevenson owned 40 percent of Pennyfarthing. All the labour lawyers I have talked to agree that if it had been 50 percent, the union case would have been successful. In other words, that was the test, very clearly: that to have the same control or direction required a financial interest in excess of 50 percent. That was the old test.

I submit that this amendment to the old Code deals specifically with that case, and simply says that that test no longer applies. So a unionized construction company can now spin off a 100-percent-owned subsidiary that's non-union to compete against themselves. Ultimately, it's obvious that even if a construction company or an owner of a construction company that is unionized wants to remain union, it simply will be impossible if everybody else is spinning off non-union subsidiaries. It puts them in a difficult position. Of course, it puts the workers in a far worse position.

I want to deal a little now with something that I don't think has been mentioned yet in this debate, and that's the question of retroactivity. This bill says that the penalty can only be retroactive if there is.... It used to say "deliberate attempt," but now it simply says "an attempt," which still implies intent. In other words, you have to prove that the employer who has spun off this non-union subsidiary intended to thwart the collective agreement before any decision by the new Industrial Relations Council becomes retroactive. We have a situation, quite clearly, where a firm spins off a non-union subsidiary, is caught by the union, goes to the Industrial Relations Council, is found guilty, and there is no remedy except to say: "Oh, that's terrible. Don't do that again."

It is absurd for two particular reasons. It is very significant in the construction industry because of the duration of construction projects. It's not like a mine, a mill, a pulp mill or a sawmill. Construction projects have a short lifespan, so a unionized company can spin off a non-union subsidiary for one particular construction project. By the time it goes through all the machinations and all the processes and all the action before the Industrial Relations Council and all the legal procedures.... He is found guilty, but it is found that he hadn't intended to do so, or that you can't prove intent. So even if he is found guilty, it says he can't do that again, but

[ Page 1569 ]

meanwhile he has built the whole thing non-union. The duration of construction projects means that, and of course the delay that we experience with the labour board will be far worse under this bureaucratic nightmare, with this type of legislation which is so interventionist that it is going to require an army of bureaucrats. It means that construction projects will be constructed non-union, and there is no penalty on the unionized firm.

What you are doing in this legislation is this. There is a built-in incentive to spin off a non-union firm, to try to do it, because if you get caught, the onus is on the union to prove that it was intended — that if not deliberate, then it was the intent of the company to thwart the collective agreement. Under this legislation, the onus is now on the union to prove somehow that the unionized company that spun off the non-union firm intended to thwart the collective agreement.

We see a tightening up of the provision which makes it easier to spin off, and then we see a second provision which says that if you get caught and you are found guilty, the remedy is simply to say you can't do it again, unless the union can prove that it was an attempt to thwart the collective agreement — unless the union can prove that it was the intent of the unionized company to do that.

Mr. Chairman, for the construction industry this is the most important clause in this new bill, because it means, as Graham Leslie has pointed out, and others consistently, the deunionization of the construction industry. It is absolutely clear....

MR. WILLIAMS: And others.

MR. CLARK: The first member for Vancouver East says others have pointed it out. Of course, virtually all experts in the field have pointed it out. It is only partisan individuals on the other side that have said that is not the intent or that is not the legislation.

So even if we accept at face value the minister's statement that this is not the intent of the legislation, it is clear that that is the consequence of this legislation. It means the end of the unionized construction sector.

If you think that this is just going to happen, and that the power of government can force this kind of legislation on the unionized construction sector without any disruption, then you are absolutely and totally wrong. This clause, more than any other, will result in continued industrial unrest in this province. It isn't going to help us attract foreign investment; it isn't going to help us attract domestic investment. It is going to cause turmoil and violence. It is going to cause jailings. It is going to cause repeated unrest in the unionized construction sector, because you are saying to those people that they no longer can conduct business in this province. You are saying that that is the end of their union and the end of the way they have conducted business.

That may be the minister's intent or the government's intent in the long run, and when you look at the other clauses, that is clearly the direction. We want to compete with Asia-Pacific and Korea and Taiwan, and we have to be more competitive in the market economy. The desire is clear there: it is to drive down the wages of the construction industry.

But if you think you can do that by force of legislation, by this kind of act, without any disruption, you are absolutely wrong. This clause, more than any other clause in this new labour act, is going to cause serious turmoil and industrial disruption, and it won't work. Worse than that, it is insidious, because the minister has repeatedly said that he is against double-breasting, and that is not what this language does.

MR. CHAIRMAN: The Chair understands that the hon. Premier would like to make an introduction.

Leave granted.

HON. MR. VANDER ZALM: Mr. Speaker, to all of the hon. members here, we have visiting with us today a group from my old constituency of Surrey, and certainly a group that I have great admiration for and have had some opportunity to be in contact with over the years. They are 19 grade 7 students from the William of Orange Christian School in Surrey. They are seated in the gallery with their teacher, Mel Deglint, and I would ask the House to bid them a welcome.

MR. MILLER: Well, I know that you missed my presence yesterday. I want to talk a bit about a point that was covered somewhat by my colleague from Vancouver East, and that is the impact on the construction industry. Of course, you can't really talk about that without mentioning the proud history that companies in this province have and the reputation that they have enjoyed throughout the world in terms of their ability and their efficiency on major construction projects. Certainly I, like many other people in this province, have had relatives who have traveled; my father-in-law, for example, was in pipeline work in South America and my own father was in the Yukon.

I think it may be important at this point, when we're talking about that, to understand that construction workers, although they have been viewed as very highly paid workers in this province.... All too often we forget that construction workers don't often work a full year. They don't enjoy the benefits of a stable economy or a stable situation in which to work, and therefore there is, I believe, justification for the kinds of wage rates that they've been able to negotiate. And construction workers and construction companies have also, in my opinion.... And again I stress the fact that B.C. does have a proud history. We have some tremendously competitive, efficient construction companies and construction workers. When I think of some of the massive projects that have been undertaken in this province, going back many years, there's proof positive of that.

Now here's an industry and a workforce that's really faced with deunionization. Quite frankly, they have enough problems in terms of combating that situation without this little helping hand from the government. New companies are forming — they are non-union — and it's clear that.... And I know employers in the construction sector, and in the truck logging sector which I talked about the other day in the House, who want to remain union. It's not that they are rabid union people, but they have a history in this province, and they know the contribution that unions have made, and they get along with their employees, and they conduct business fine. The new companies are coming in, and they are non-union companies. The difference, and it was significant to me.... I recall the Pennyfarthing case, or the contract that was let, where the lowest bidder was just under. It was just the lowest bidder, and not by very much. The next lowest bidder was a little bit higher; the difference in the two bids was not that considerable. The factor was wages. It was clear to me upon reading the story of those two bids and the differences between the two bids and the fact that one was union and one

[ Page 1570 ]

was non-union, that the non-union owner was, in a sense, pocketing the wages. He was taking the wages that he had saved because he is non-union and putting them in his pocket. Really, the difference in the two bids wasn't that much.

I've talked before about that downward spiral, and other members have talked about that downward spiral. There was a recent report — from I forget the name of the accounting firm — that indicated that in fact that is happening in this country and in this province, and I think that that's a negative impact on the economy of this province. I fail to see why the government, despite the minister saying for the first time since I've sat through this debate that he was sure of an interpretation.... We've asked him lots and lots of questions a lot simpler than this one, and he's never been able to say that he was sure of an interpretation. The best he's been able to offer is: "Well, that will be an interesting question for the board to consider." Now, all of a sudden, he's sure of an interpretation. Well, I don't think he is that sure of that interpretation.

[11:15]

So we have a situation where the threat to the construction companies and construction unions is very real. We have a section introduced that is going to be just a big helping hand along the way, to speed the process up, and the result of that will be, I think, a lowering of our expertise — that proud history that I talked about — and a dismantling, if you like, of the stability that's existed with construction workers for many years through the hiring halls, bearing in mind that most of these people are located in the lower mainland but spend most of their working lives traveling away from home and being away from home and living in camps, and quite frankly some of those situations have not been the best either.

So our people in British Columbia, I think, are good workers. They deserve the kind of wages that they are getting, and they have won those wages through negotiation, free negotiation with their employers. The government, as they have failed to do with the other clauses that whittle away, that really give a helping hand to the deunionization process, fail to really justify that in concrete terms. I have heard some attempts at philosophical arguments, but I have never heard anything that you can really put your teeth into in terms of a real argument as to why it seems that the government would prefer that we weaken the trade union sector in this province. I think this clause is simply another one along the way to doing that, and for that reason alone the government should reconsider. I am sure the minister won't want to respond to that.

MR. GABELMANN: Mr. Chairman, I indicated earlier that I wanted to refer to three particular LRB decisions over the last few years. Before I do, I think it is important to extract from the government policy document what the government's economic intention is in respect of not only this section but the legislation in its entirety. This document was prepared three years ago, and it was part of a five-year economic plan for the government's program in British Columbia, so it is clearly still in effect. I will just quote one paragraph from that report:

"Particular emphasis should be given to measures which remove barriers to the efficient operation of markets, including the labour market." This is an extract from a government document which sets out the economic agenda for the next five years. This was done about three years ago. "Particular emphasis should be given to measures which remove barriers to the efficient operation of markets, including the labour market." One of the arguments we have been making consistently throughout the debate on this bill is that that objective is being met by this legislation, and in particular it is met by section 25, to remove barriers from the labour market.

When the earlier section talks about a market economy, they are talking there also about the labour market and the objective: the philosophical goal of the government is to remove barriers in that labour market. I want, as we have been saying now for some days, to relate that objective to this particular section and, by extension, to this entire piece of labour legislation.

I want to cite a case in which the labour board has allowed for double-breasting under the existing law. I think this is probably the case which is on the edge of the decisions which have been made in respect of declarations of common employers. This one is Comet Drywall, Power Drywall and Cosmic Systems. I will not review the entire case, but I think what I will do is just read the summary of the case.

An application was made by the Drywall Tapers and Finishers Local 2009, a union I suspect most members of this House didn't even know existed. Nevertheless, the board says:

"A new business started, by a former principal of a company" — not an employer, a principal — "that had a collective agreement with the union, was not a successor to the company bound by the collective agreement, even though the two main elements of the business of the company bound by the collective agreement had been the business reputations and expertise of the two principals. The company bound by the collective agreement had not ceased any part of its operations, and its business did not continue in any discernible way through the new company. Two companies that shared offices and facilities and used the same employees and site superintendent, although not interchangeably, were not common employers. Although the principal of one company had lent money to the principal of the other, the lender was not the guiding force behind the borrower's company."

Yesterday the minister talked about this section being needed to allow for investment, that if we didn't have this section of the bill there would be no investment. Here is a situation where two principals decide to partially part company — and I didn't mean the pun. One of the principals decided to set up another company, a non-union company. In this case, it was additional investment — another company created — and presumably additional work, because the original company still managed to maintain its original level of work and business. So there was additional work being done. Presumably some other company didn't get the work. I guess you can't argue that it's additional investment, but I think it meets the kind of criteria the minister was talking about yesterday, wishing to allow for increased investment. Well, here you have a case, which I think is a classic, where the LRB allowed that company to operate non-union. It denied an application by the union for a common employer declaration. Yet there were two partners in a unionized business, one partner moved out, set up a separate company in a legal and financial sense, and continued to use the same offices, the same equipment and the same personnel — although not interchangeably — but was not declared a common employer. So if the government wants some limited ability to have a variation on double-breasting but not double-

[ Page 1571 ]

breasting, that's available now. Clearly the Comet Drywall case is the law on that issue. So it's hard to understand what the government wants to achieve by making these changes in wording, unless it's double-breasting.

Let me refer next to the Zagreb case. Almost every decision you see on section 37 has some reference in it to the Zagreb Construction case. I referred to it earlier. In this particular case a decision by a panel chaired, ironically, by Shona Moore had allowed for double-breasting. I say it's ironic because Shona Moore has been one of those people who is neutral; her politics, I think, are capital-L Liberal — certainly not part of our side of the equation. She has been a neutral on the board, who has since left the board and is operating in private practice. In fact, she made a decision in this Zagreb Construction case in 1983 that allowed for double-breasting there. It was a decision involving the carpenters. The decision was appealed, and the board decision of six months later overturned that particular decision.

What were the facts? Well, in brief, Mr. Chairman, they were that a husband and wife had a company. They operated it jointly; they were the principals — no one else was involved — and it was a union company. The wife then started up her own company, using the same offices, the same people, the same everything. The board, in a panel decision which Shona Moore was involved in, said: "That's not double-breasting. They're not common employers" — believe it or not — "and you're allowed to have this separate company, even though you were both principals of the unionized company." The wife goes out and starts up a non-union company, and the board in its first decision declared that it was not a common employer. Of course, it was appealed and then overturned. The declaration was that in fact this was double-breasting and these were common employers.

I think the important point there is that even with a liberally minded chairperson of a panel — and the composition of that panel one could perceive as middle of the road in terms of its view of labour relations — and even with all of the original language of the Code and the purposes and objects of the Code as they were — still are for some days yet — even with that language, a husband and wife operating two different companies using the same business apparatus could be declared as not common employers even though the decision was overturned.

The point is that with the new language certainly, with the new objectives certainly, and with the new mood that the IRC will bring to the administration of this new act, that original decision would have stood and the appeal would never have succeeded without any question whatsoever.

The point here is that even with the existing wording of section 37 in the Code, the government will achieve its objective of allowing for double-breasting because it is its objective clearly. It will achieve its objective for allowing double-breasting of this kind. Principals of a company, one of whom spins off a separate company — a husband and wife, one of whom spins off a separate company — using the same facilities, using the same equipment, using the same offices, using the same ability to solicit business and choosing which arm will handle the business.... All of that will be available to the government under the existing wording of section 37, given the other changes to the Code and the direction the IRC is being required to take under section 27 of the new act. So there can only be one conclusion. Only one conclusion can be reached from a decision by the government to proceed with making the test less onerous or less rigorous, as it is doing by making these changes. We no longer have four criteria which must be met; any one criterion is sufficient to escape the "common employer" declaration.

I want to conclude my comments at this stage with reference to Wills Enterprises. I referred earlier this morning to a situation where a trusted senior employee of a unionized company could set up another company, and there could be a cosy arrangement between the two in terms of utilization of the unionized company's assets and resources. The cosy relationship is that 5 percent of the gross goes to the unionized company for all the non-unionized company's work — an exceedingly cosy relationship. It may not be the best example, but it's the example I want to cite: the Wills Enterprises decision of February 27, 1984. I want to read the reasons for the decision of the board in this particular case.

[11:30]

Just to set the scene, we have a unionized contractor. One of the trusted employees sets up another company, uses all of the same resources, operates non-union, gets contracts through the network and all of the resources of the unionized contractor, pays 5 percent of the gross to the unionized contractor for those services — but operates non-union. The current language would lead to a different decision than the one reached here, because in this case the declaration was that in fact this was a common employee. Here are the reasons:

"The activities or businesses of Argo and Wills Enterprises" — these are the two companies — "were associated and related. Both companies were general contractors, one engaged in union and the other in non-union construction. The narrow test for control or direction asserted by the companies — namely, whether there was a 'single guiding force' in the two companies when viewed on the operational level — failed to give proper effect to the intent of the Legislature as disclosed by section 37. The words 'control or direction' had never been limited by the board to operational control, nor to the presence of any persuasive influence by key individuals..."

I need to pause here, because the minister may say "operational" is no longer with us. It doesn't matter; the law is clear that it doesn't matter whether the word "operational" is there or not. I just want to make that point.

"....in the affairs of the two entities involved. The board had certainly found 'control or direction' to be present in two companies by virtue only of common share control or common financial control, regardless of whether the day-to-day business of the two entities fell under the control or direction of a single individual. Yet the board was not limited to considering only these factors" — under the old law.

Mr. Chairman, I only need another minute or two.

MR. CLARK: I was enjoying greatly the member for North Island, and I wish he would continue.

MR. GABELMANN: I will wrap up quickly by finalizing the quote from the LRB.

"In this case, power — that is, realistic control — rested with the company controlling the purse strings, Wills Enterprises. The true relationship between Wills Enterprises and Argo could be seen by reviewing the facts of only one project operated ostensibly by Argo. Financing, banking services and bonding were supplied by Wills Enterprises, and Argo was

[ Page 1572 ]

building the project using former employees of Wills Enterprises. Argo had become active precisely at the time when Wills Enterprises had become less active in the public tender market. Through Argo, however, Wills Enterprises was able to continue a presence in the public tender market and to make a profit.

"To ensure that collective agreement obligations were not defeated by mere corporate reorganization was precisely one of the proper purposes of section 37 of the Code. Given that Wills Enterprises continued to compete in the same market as Argo, the panel found that there had been no transfer of a part of a business within the meaning of section 53. The operative prerequisite had thus not been satisfied."

The reasons conclude with that point.

Under the new law, as I think we have demonstrated this morning, that decision would be reversed. Those two companies would not be viewed as a common employer, but in fact would be separate employers. It is for that reason and for much else that we on this side of the House feel that the government either does not understand what it is saying in respect of its position on double-breasting, or deliberately intends to allow for double-breasting to become rampant in this province.

MR. HARCOURT: Mr. Chairman, I'm pleased to be back after a very successful mission of selling B.C. coal, but it is unfortunate to have to come back into a debate about this section 25 of the Industrial Relations Reform Act. It makes it more difficult to do just that sort of a task after receiving such negative comments from people in the rest of Canada about this terrible piece of legislation. I think it's important to realize that section 25, with the significant change of removing the old words under section 37 of the Labour Code, "a common control and direction," and changing them to "the same operational control and direction," in essence allows for double-breasting, which in essence allows a union contractor to also set up a shell corporation to be a non-union outfit; and it applies retroactively, which is even more insidious, Mr. Chairman.

So I think it's important that we make it clear why this particular section, like the rest of the bill, is bad for British Columbia. What it allows an employer to do is unilaterally get rid of unions by using a corporate strategy. This particular section, Mr. Chairman, is as repugnant as any in this quite repugnant piece of legislation. It represents clearly the unfair nature of this Bill 19. Section 25 demonstrates that very clearly — that the government has deliberately set out to establish an unfair labour bill.

It is a bad piece of legislation, and this section demonstrates it because the section demonstrates three fatal flaws in this piece of legislation. First, Bill 19 and section 25 in this bill tip the balance in favour of employers and against the working people of this province. Secondly, it extends, not ends, wage controls. It wipes out freely negotiated collective agreements, where the wages and benefits have been negotiated by free citizens, between employers and employees. It wipes out what workers have fought for for decades in terms of wages and benefits, and basically turns the workers of this province into economic serfs in low-paid jobs with little or no security and very few benefits. It is bad for the workers of British Columbia.

Section 25 also shows the massive intervention of this government in labour-management relations. It is taking away from the free collective bargaining process, Mr. Chairman, which is an essential element of our democratic system.

The Minister of Labour, I understand, yesterday said: "We need section 25 so that we can have more investment in British Columbia, more jobs and a more prosperous, stable province." I want you to be aware that it's going to do the opposite. Section 25 is going to scare away investment and lead to a more depressed, bitter British Columbia. If that is the minister's reason for bringing in section 25, he's wrong. His judgment on that is clearly wrong. It is not going to bring about more investment.

I'll come back to that in a second, but I also want to talk about why this particular section 25 is such an odious provision for the people of British Columbia, the working men and women of this province. I'll give you a few examples why it is going to be so destructive to hundreds of thousands of people in this great province of ours. I'll use the example of construction workers. What will happen to the people who have built this province? They've taken years to get training, skilled and become apprenticed. They've worked in dangerous and difficult circumstances to build the mines, the highways, the electric projects and built the buildings that have made this a modern and prosperous — at least until the last few years — part of the world.

The construction workers of this province are going to be double-breasted. They're going to have wages and benefits rolled back so that they'll be working as a lot of the non-union contractors have done at half the wage rates, with very few benefits, with contractors who have a less than envious record — as probably the politest way to put it — in providing apprenticeships, in putting funds into the apprenticeship program, of providing for the security and safety of older workers in their older years by putting into pension funds, by putting into health and safety programs for their valued employees. Workers in this province, when this provision is introduced, proclaimed, put into effect, are going to have a far meaner and far less secure work environment, with far less purchasing power for the local economics throughout this province.

As New Democrats we don't want that, and we don't think the working people of this province and the small business community want to see that happen either. You know, our citizens are proud of the men and women who put together the dams and the hospitals and the schools and the highways and the bridges and the houses that we all now enjoy. We don't want to see that happen to the workers of this province.

Section 25 applies much more widely than just to construction workers, because it also applies, for example, to logging contractors, particularly on the coast. I have heard of, and I think we will be receiving shortly, a communication from the logging contractors on the coast of British Columbia, who say that the pressures on them right now are so dramatic, and the practices of the forest companies in this province are making it so difficult for them to stay unionized, that they will be forced to decertify; they will be forced to place their workers in a position of being, again, economic serfs. Do you know what the truck loggers are saying? They are saying that people are going to be killed because of section 25. People will be forced to work in unsafe ways. They'll be forced to drive their trucks much more quickly. They'll be forced to accept unsafe work practices. They'll be forced to do these things, and we don't want that to happen. We don't want to see the working men and women of this

[ Page 1573 ]

province killed because of the ill-thought-out, unjust section 25 that is before us at this time. I would prefer to see a few pieces of paper killed — Bill 19 — than the working men and women of this province killed.

That's all we'd be killing, Mr. Chairman: a few pieces of paper. A few pieces of paper, and then go back and do the job properly, so that we can get a proper labour-management climate in this province. I think we could also then go back — working with the Minister of Labour, the Premier and the Minister of Finance — to bringing about the investment that the Minister of Labour says section 25 will bring about.

Well, it won't. That's not just my opinion and the opinion of my colleagues here on this side of the House; it's not just the opinion of the 22 splendid members of the New Democrat caucus who have been putting forth very clearly our arguments on this bill, and our superb labour critic, who has in a measured, restrained and articulate way....

AN HON. MEMBER: Boring.

MR. HARCOURT:.... been laying out for the boring members of the other side of the House — for the uncaring, not-hearing members of the other side of this House — the disaster that this section in this bill is.

[11:45]

I want to respond to the minister, who said that section 25 will bring about investment in this province. I want you to know, Mr. Chairman: that's not the opinion of the people of British Columbia; that's not the opinion of the editorial writers, the business writers or the business community. That's not the opinion of Jim Matkin, head of the B.C. Business Council, or of Bill Hamilton, who was the head of the Employers' Council, the predecessor to the B.C. Business Council, and the Postmaster-General in the federal Parliament. That wasn't the opinion of the Deputy Minister of Labour, who left in despair and disgust because he would not be part of this terrible piece of legislation. That is not the opinion of people in British Columbia, and I can tell you, from speaking to a number of members of the federal government whom I met while I was in Ottawa, it's not their opinion. It's not the opinion of the people I spoke to in Toronto; it's not the opinion of the people I spoke to — union and management — in Hamilton, where we were selling B.C. coal to be used as metallurgical coal, or the people we were speaking to when we were discussing selling millions of tons of B.C. coal to Ontario Hydro. It's not the opinion of people in central Canada. It's not the opinion of the people who are going to make the investment decisions. It's not the opinion of the people in Tokyo, Hong Kong, Singapore, Los Angeles, Chicago, Dallas, New York, Paris, Geneva, London. It's not their opinion, Mr. Chairman. They're not going to come to a province that is suffering from massive confrontation, bitterness and insecurity.

Interjection.

MR. HARCOURT: The relevancy, to the confused member of the House on the other side, as I've said twice before to the hon. member for Boundary-Similkameen, is that your own minister said that this section would bring investment and jobs, and he's wrong. So if it's not going to bring investment to this province; if it's not going to create jobs — it's going to lose jobs; if it's going to create a situation where our citizens are working serfs, economic serfs, where they have far less of a way of life, where they face more danger, where they face less security, where they don't live in a province where they have the dignified way of life that they want, then indeed this act is so wrong that it should be put aside for us to take a sober second look. And section 25 is one of the worst parts of this act.

I may say, Mr. Chairman, that section 25 seems to be provoking the worst impulses of the government. While I was away selling B.C. and selling B.C. coal and trying to create 13,000 jobs in this country.... While we were doing something positive for British Columbia, I was ashamed, as a member of the legal profession, at the unbelievable performance of our Attorney-General (Hon. B.R. Smith). I will be speaking more about that later on today, so you can sit down and behave yourself, hon. member.

MR. CHAIRMAN: The member for Boundary-Similkameen rises on a point of order.

MR. HEWITT: Mr. Chairman, I rise because, although I've enjoyed the member opposite's words, I would ask the Chairman to advise us whether or not the ability to sell on the part of the Leader of the Opposition is relevant to section 25. Would you so advise.

MR. CHAIRMAN: The Chair would have to rule that certainly an ability to sell is not relevant, although I do think the Leader of the Opposition did tie what he was saying to the section of the bill that we're dealing with.

The member continues. We'll give you a couple of moments. The time is up, but....

MR. HARCOURT: Thank you very much, Mr. Chairman. You're right. It has a great deal to do with selling British Columbia, and it has a great deal to do with selling out the working people of British Columbia. If I can't sell that to the hon. member, then indeed this government has trouble.

So, Mr. Chairman, we think that section 25 represents one of the most repugnant aspects of this repugnant piece of legislation. It permits double-breasting. It is going to diminish rather than enhance the opportunities for working men and women in this province. We hope that this bill will not be proclaimed, that we can have a chance to enjoy the beauty of British Columbia in the summer and come back and have another go at this false start at bringing about a prosperous and stable British Columbia. Thank you very much, Mr. Chairman.

HON. MR. PARKER: Just a comment, sir. I find it amazing that anybody in this House would suggest that British Columbia was built by union only. Unionized members of the workforce in British Columbia represent maybe a third of the workforce. I don't think we should be leaving out other people in the province of British Columbia. Over 60 percent of the workers of British Columbia are non-union. And to think for a moment that this piece of legislation and this section would cause deaths in the logging contracting business on the coast is atrocious. The logging industry in British Columbia is largely non-union. It has an excellent safety record. Mr. Chairman, I believe those are just fear tactics and improper information, trying to upset the people of British Columbia. I think it's totally irresponsible.

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MR. MILLER: I think there have been some excellent arguments made tying the effects of this section into what's going to happen in the workplace. With respect to the Minister of Forests and Lands and the major safety gains in this province, we've killed 35 loggers in forestry this year. The major safety gains that have taken place in those dirty dangerous jobs in the bush have been won by trade unions. It certainly wasn't the employers of this province, or especially the non-union employers.

HON. L. HANSON: It certainly was an interesting speech by the Leader of the Opposition. His reference to the knowledge that Switzerland, Japan.... None of these people appreciate Bill 19; they don't appreciate section 35; the world is going to end; doom and gloom is going to come; British Columbia is going to drop. I believe that British Columbia will be better for Bill 19 and section 35 will also prove that.

To add credibility to the remarks of the Leader of the Opposition, he said "common control and direction." The Code language read "common control or direction." I would suggest that the Leader of the Opposition should read his notes; and I also suggest that he should take that into consideration when he is speaking on the reaction of the rest of the world and Canada to British Columbia and its Code 19.

The philosophy in this bill will bring investment to British Columbia; it will bring prosperity to British Columbia. That is also reflected by the philosophy of this government. The philosophy of this government is supported by the people represented here by a majority on this side of the House.

MR. LOVICK: Mr. Chairman, it is fascinating to me and to other members of the House, I am sure, to hear the Minister of Labour continue to tell us what he believes. The only conclusion I can derive when he continues to rely on belief rather than logic and rather than on evidence is that he defines belief the way St. Paul did — "the evidence of things not seen."

Mr. Chairman, what we have been doing is presenting cases, documented and demonstrated time and time again, suggesting that this section of Bill 19 opens the door to double-breasting. All we have had thus far is repeated assertions that no, we don't believe that is the case. What we have said is simply that unless and until this government can demonstrate clearly to us that that is not the intention of this piece of legislation, we will continue to argue the case as passionately and effectively as we can. Because to do otherwise is to open the door to a state of affairs in this province that is simply not tolerable and acceptable to fair-minded and decent individuals.

When I hear platitudinous kinds of squibbles coming from the other side suggesting that we are wrong, let me put it to the members opposite, in more ways than one, I might add: I invite any one of them to challenge any single one of the economic arguments we have presented. I realize, Mr. Chairman, that my request is unreasonable because it demands a certain level of knowledge and expertise, which they clearly don't possess. But I am suggesting in all seriousness that we have indeed provided very good, solid and substantial arguments to support our case. They have been met only with repeated assertions of "We don't believe," or "We disagree." For heaven's sake, if you want us to accept the premise that this is not opening the door to double-breasting, then accept also the simple invitation we have given you: rewrite it in such a way that it is patently clear. At the very least, we might even consider another alternative: give us a formal declaration from the other side of the House that your government will not tolerate double-breasting. Unless and until you do that, however, with all due respect, Mr. Minister, we can do nothing else but stand here and articulate the case we presently are.

On that note, Mr. Chairman, I see the time has run out, as it has for those on the other side of the House. I would suggest that the committee ought to rise and report progress.

The House resumed; Mr. Speaker in the chair.

The committee, having reported progress, was granted leave to sit again.

Hon. Mr. Strachan moved adjournment of the House.

Motion approved.

The House adjourned at 12 noon.