Quebecor CEO Pierre Karl Péladeau testified Tuesday before a Quebec labour legislation committee. (Canadian Press)The head of the Quebecor media empire has defended the two-year lockout at one of his Quebec newspapers, dismissing the suggestion it survived only by circumventing anti-strikebreaker laws.

'The present conflict is altogether legal. I will say to you loud and clear that Quebecor has always been respectful of the law.'

—Quebecor CEO Pierre Karl Person Péladeau

Quebecor Inc. chief executive Pierre Karl Péladeau told a parliamentary hearing looking at modernizing Quebec's labour laws he agrees with the need to change them — but in a way that also helps companies, not just workers.

More than 250 employees at Le Journal de Montréal, a Quebecor-owned tabloid, have been locked out for more than two years. In the meantime, Péladeau's company created QMI, a news service that supplies Quebecor papers.

Péladeau told the commission there's nothing wrong with wanting to create a business that adds a new revenue stream — especially when the news business is going through such tough times.

"The present conflict is altogether legal," Péladeau said Tuesday.

"I will say to you loud and clear that Quebecor has always been respectful of the law … linking the QMI agency to the conflict is a demonstration of bad faith."

Péladeau defends wire news service

QMI supplies material to his properties in English and French Canada. Le Journal has continued to operate throughout the lockout with minimal impact to its profits.

'Some have said you have created ... the perfect lockout from an employer's point of view.'—Committee chairman François Ouimet

Sitting right behind Péladeau, in the crowded hearing room, were Le Journal's locked-out legislature reporter and a top labour leader who occasionally turned to other audience members and shook her head during the testimony.

The committee chairman said parliamentarians had heard arguments that, by creating the agency, Péladeau managed to do legally what otherwise would have been illegal.

"Some have said you have created … the perfect lockout from an employer's point of view," said François Ouimet, a Liberal legislator. "We could ask the question … 'What is this businessman's interest in finding a solution to the conflict?'"

Péladeau replied that creating QMI allowed him to hire employees while also managing, in the meantime, to save $6.5 million a year by pulling out of The Canadian Press news service.

Locked-out workers publish own paper

The union representing Journal editorial employees wants Quebec to revamp its "anti-scab law" in light of their lockout experience.

Last fall, employees rejected a company offer by a vote of 89.3 per cent. That deal would have brought some of them back to work, but it also reportedly included cutting many jobs.

Locked-out employees are producing their own online newspaper called Rue Frontenac, which is updated daily and is now printed as a weekly tabloid.

Quebecor's holdings include Sun Media Corporation, Canada's largest chain of tabloids, and community newspapers.