Critics see pro-business bias in budget measures that chip away at labour power

OTTAWA – Is the Harper government fundamentally anti-labour?

The question arises anew after Labour Minister Lisa Raitt announced yet again Wednesday her intention to table back-to-work legislation hours after employees at CP Rail went on strike, as she did previously with the Air Canada and postal disputes.

But critics say the government’s true colours are coming through more clearly and with a more systemic impact in a controversial budget bill they argue fundamentally changes the power balance between employers and employees — all to the detriment of workers.

One of the measures is so sneaky, says NDP MP Pat Martin, nobody seemed to notice the line buried deep in the 452-page Bill C-38 that simply states, “The Fair Wages and Hours of Labour Act is repealed,” giving no explanation.

With those 10 words, Ottawa intends to wipe out a 1985 law compelling contractors bidding on federal contracts to pay “fair wages” and overtime.

“I would have missed it and I’m from that industry. It was number 68 of 70 bills that they changed,” said Martin, a former journeyman carpenter and construction worker.

Martin notes that unlike most measures in the budget bill, there was no prior discussion of the measure or even a signal such a change was contemplated.

“It’s a solution without a problem. The only conclusion I can come up with is that it’s a war on labour and the left. It’s what the Americans did with the right-to-work states and the end result is $8 or $9 an hour is now the average wage in places like North Carolina.”

Along with the little-noticed provision, Bill C-38 calls for changes to immigration rules, the temporary foreign workers program and the employment insurance system — all with an eye to make it easier for firms to bring in workers with the skills they require and to reduce disincentives to work in Canada’s domestic labour market. As well, the government intends to effectively raise the retirement age from 65 to 67 years through changes to Old Age Security starting in 2023.

Human Resources Minister Diane Finley is expected to announce details of the changes to the EI program on Thursday, establishing the types of jobs workers receiving benefits will no longer be allowed to refuse and possibly trimming benefits for repeat claimants.

In recent statements, government ministers have defended the proposed measures by citing “unprecedented” labour shortages in some sectors and regions of Canada, particularly Alberta and Saskatchewan, and the approaching demographic train wreck of retiring baby boomers.

Canadian Chamber of Commerce president Perrin Beatty believes labour shortages are already a big problem for employers. While he applauds the government’s actions, he adds more still needs to be done.

“That’s the number one issue for us this year,” Beatty said from Vancouver, where he was continuing a series of round table talks on skills shortages.

“We have pockets of persistently high unemployment in this country at the same time as in other areas there’s a desperate need for skills. In some cases it’s a specific skill that is needed, in others, like Alberta and Saskatchewan, they are saying, ‘We will take anybody who’s willing to work.’ “

That is hard to square with a national unemployment rate of 7.3 per cent, and new figures showing there are 5.8 unemployed workers for every vacancy. Officially, there were 1.37 million Canadians actively looking for work in April, and that doesn’t count the hundreds of thousands of discouraged workers, involuntarily self-employed or part-timers wishing to be employed full-time.

Labour economist Erin Weir of the United Steelworkers says he has never bought the labour shortage argument, noting that in a market economy if that were the case wages would be increasing. Instead, they are barely keeping up with inflation.

It might be fair to point to a skills shortage in certain hot sports, he agrees, but the solution to that issue is training, not macro-economic measures designed to increase the labour pool generally.

To Canadian Labour Congress president Ken Georgetti, the measures add up to a decidedly pro-business agenda. And that’s a shame, he said, because what the Canadian economy needs most is a strong middle class that can afford to pay down debt and start consuming.

“They seem to think that low wages and maximizing profits are more important than a good solid middle class in Canada,” he said.

The government, of course, doesn’t see it that way. In response to questions about EI changes recently, Finance Minister Jim Flaherty outlined what he sees as the major challenge of workers facing the country, maybe not this year but in the next decade and beyond.

“We are going to have significant labour shortages in this country,” he said. “That means we are going to have to encourage more persons with disabilities to work, more seniors to work, more aboriginal people to work, including young people. We need to get rid of disincentives in the employment insurance system to people joining the work force.”

The statement could well apply to all the measures dealing with workers in the budget bill, not just EI.

TD Bank economist Craig Alexander says the approach is typical of how the Harper government likes to operate — incremental changes that collectively carry a big wallop.

“They often tackle things not by announcing a bold new national strategy but by identifying a priority and then they pick away at it,” he said.

If that’s the case, the government may be just starting the process of altering the labour market landscape in Canada. The changes announced so far are too modest to make a big splash, Alexander said.

“I’m really not worried about modest changes in the labour supply acting as a major constraint on wages, because over the next 10, 20 years demographics will win out,” he explained. “Businesses are still going to be faced with shortages and they will have to find ways of keeping workers in the labour force longer.”