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INDUSTRIAL RELATIONS OUTLOOK 2014

Back to Basics for the Labour Movement.

REPORT DECEMBER 2013

Industrial Relations Outlook 2014: Back to Basics for the Labour Movement by David K. Shepherdson

Preface

The annual Industrial Relations Outlook, published by The Conference Board of Canada, is intended to inform labour, management, and policy-makers by providing a comprehensive overview of issues that may influence labour relations and collective bargaining in Canada over the coming year.

The collective bargaining outlook is based primarily on The Conference Board of Canada’s economic, compensation, and industrial relations research, as well as data and reports from organizations such as Statistics Canada. However, the report is distinguished by the contribution of senior labour and management practitioners who offer their considered and expert views on the prospects for 2014 in a roundtable discussion convened annually by the Conference Board.

This year’s Industrial Relations Roundtable was held at the Conference Board on September 12, 2013, and included the following participants: Tor Veltheim, Chief Advisor on Negotiations, Treasury Board and Finance, Government of Alberta; Louis Erlichman, Research Director, International Association of Machinists and Aerospace Workers; Don Sinclair, Chief Executive Officer, College Employer Council (Ontario); Michael Mahar, Canadian Director of the Amalgamated Transit Union, Canadian Council (ATU Canada); Doug Marshall, National President, Union of National Employees; and Courtney J. Francis, President, ZipTrack Inc.

To cite this report: Shepherdson, David K. Industrial Relations Outlook 2014: Back to Basics for the Labour Movement. Ottawa: The Conference Board of Canada, 2013.

©2013 The Conference Board of Canada* Published in Canada | All rights reserved | Agreement No. 40063028 | *Incorporated as AERIC Inc.

®The Conference Board of Canada and the torch logo are registered trademarks of The Conference Board, Inc. Forecasts and research often involve numerous assumptions and data sources, and are subject to inherent risks and uncertainties. This information is not intended as specific investment, accounting, legal, or tax advice.

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CONTENTS

i EXECUTIVE SUMMARY

iv RÉSUMÉ

Chapter 1 1 The State of the Unions 2 Back to Basics

Chapter 2 6 The Economic Outlook 7 The Global Outlook 8 The U.S. Outlook 9 The Canadian Outlook

Chapter 3 16 Compensation Outlook 17 Average Base Pay Increases

Chapter 4 19 The Bargaining Outlook

Chapter 5 24 The Roundtable 25 Public Sector Bargaining 32 Private Sector Bargaining

Chapter 6 35 Conclusion

Appendix A 38 Bibliography

© The Conference Board of Canada. All rights reserved. Please contact cboc.ca/ip with questions or concerns about the use of this material.

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AcknowledgementsThe Conference Board of Canada wishes to acknowledge the contributions made by the following roundtable participants: Tor Veltheim, Louis Erlichman, Don Sinclair, Michael Mahar, Doug Marshall, and Courtney J. Francis. As well, our thanks go to Conference Board staff: Bryce Swerhun for his assistance in gathering and preparing the data, and Pedro Antunes for his critical review of the report. Finally, we thank our external reviewers Steve Bedard from TELUS, Georgina Watts from Morrison Watts, and Bill Murnigham from Unifor for their thoughtful comments and advice.

Participant Profiles

Tor Veltheim is currently the Chief Advisor on Negotiations with Alberta Treasury Board and Finance. Tor is a senior human resources executive with an extensive background in public and private sector labour relations. His experience over the past 40 years has encompassed insurance, commercial printing and publishing, banking, health care, education, provincial public sector services, computer services, distribution, municipal administration, aviation, food services, transportation, air navigation services, and electrical distribution.

He has coordinated provincial public sector bargaining in three jurisdictions, and negotiated more than 30 collective agreements as the employer negotiator. Tor has served major organizations such as the Government of Saskatchewan, the Government of British Columbia, Canada Post, the former Regional Municipality of Ottawa–Carleton, OC Transpo, Hydro Ottawa, NAV Canada, Sun Life Financial, the Bank of Montreal, and the Montreal Standard Printing and Publishing.

Louis Erlichman is the Research Director for the International Association of Machinists and Aerospace Workers (IAMAW), a union representing more than 40,000 Canadian workers in a wide range of industries including air transport, aerospace, and manufacturing.

After studying economics at the University of Toronto and the London School of Economics, Louis worked in East Africa and for the Government of Canada before joining the IAMAW in 1978. He was Chairman of the Canadian Pension Plan Advisory Board between 1987 and 1995, and a member of the Ontario Financial Services Tribunal between 1998 and 2008.

Don Sinclair is Chief Executive Officer of the College Employer Council, a not-for-profit statutory corporation that is owned and operated by the 24 publicly funded colleges in Ontario. Prior to his appointment, he was the Executive Director of the Council’s predecessor, the College Compensation and Appointments Council. Don has also served within the college system as the Vice-President of Human Resources for Durham College and the University of Ontario Institute of Technology.

As well, Don has been a key team leader in three successful start-up opportunities in both the public and private sectors. He is currently President of the Ontario Cerebral Palsy Sports Association, a charitable organization dedicated to providing, promoting, and coordinating competitive opportunities, as well as encouraging individual excellence through sport for athletes within the cerebral palsy family.


Don is a Certified Human Resources Professional (CHRP), holds a BA and a Bachelor of Physical and Health Education from Queen’s University, and has also attended the Directors College. In addition, he has taught as a part-time professor in the field of labour relations. Formerly, he was a nationally ranked squash player and a Terry Fox team member.

Michael Mahar is the Canadian Director of the Amalgamated Transit Union, Canadian Council (ATU Canada), the largest labour union representing transit workers in North America, with more than 190,000 members in the United States and Canada.

Mike became the Director of ATU Canada in December 2012. Prior to assuming that role, he held various positions within ATU Local 583 beginning in 1986; for example, he served as Financial Secretary Treasurer in 1996 and as President Business Agent from 2005 to January 2013. He has also served as an ATU International Representative and Vice Chair of ATU Canada.

Over the years, Mike has also volunteered as President, Vice-President, and Treasurer of the Municipal Employees Benefit Society of Calgary, and he currently sits as an Alberta Federation of Labour nominee to Alberta’s Local Authorities Pension Plan as well as on the Executive Council to the Ontario Federation of Labour and the Canadian Labour Congress—Canadian Council.

Doug Marshall is the National President of the Union of National Employees (UNE), a component of the Public Service Alliance of Canada. The UNE represents about 22,000 workers from 65 organizations in the public, private, and non-profit sectors located across Canada and around the world. Doug has served as the National President for the past two years, after having served for three years as the National Executive Vice-President. Doug is a labour lawyer and has been actively involved in the labour movement for 30 years.

Courtney J. Francis is the President of ZipTrack Inc. of Coventry Connections Inc., the largest provider of dispatch and site services to taxicab operators in the Ottawa region.

Courtney holds a BSc in biochemistry from the University of Ottawa. During his academic years, he drove a taxicab at nights to supplement his summer employment income. Upon completion of his undergraduate degree in 1971, Courtney quickly recognized that his future was not to be peeking into test tubes in a laboratory. He began post-graduate studies in political science and sociology, but put those plans on hold to start raising his family, and went back to what he was most comfortable doing, driving a taxicab. Over the following years, in addition to driving he acquired a number of taxicabs and became an employer. His love for politics, however, did not diminish.

As a multi-taxi-plate owner, Courtney belonged to the Multi-Plate Owners Association, and he was a member of the committee responsible for negotiations with various unions representing taxicab operators in Ontario. In 1990, he became Director of Labour Relations for Blue Line Taxi, for which he has led more than 30 rounds of negotiations. For the last 12 years, he has served as President of the Owners and Brokers Association.


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EXECUTIVE SUMMARY

Industrial Relations Outlook 2014: Back to Basics for the Labour Movement

At a Glance

• Unions have lost bargaining power in recent years due to globalization, deregulation, and a shift in the political landscape in Canada.

• The lingering effects of the 2008 recession—lost manufacturing jobs and governments’ continued focus on reducing costs—have increased the pressure on unions.

• Unions will need to adapt in order to survive in this new reality.

• The current challenges will alter the tone of negotiations in 2014, particularly in the public sector.


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INDUSTRIAl RElATIONS OUTlOOK 2014 Back to Basics for the labour Movement

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The labour movement in Canada is at a crossroads. Union coverage has declined from its peak of about 34 per cent in the 1980s to 31 per cent of the labour force today, and is increasingly dominated by public sector unions. Globalization and deregulation have diminished union bargaining power, and the lingering effects of the 2008 recession—lost manufacturing jobs and governments’ continued focus on reducing costs—have increased the pressure on unions. As well, the nation’s political fulcrum has shifted to the right, as evidenced by the election of more conservative governments in a number of jurisdictions, many of which have taken direct aim at restricting union bargaining rights. By any objective standard, unions now face an increasingly acrimonious political and bargaining environment.

The economic climate does not provide any solace for unions either.

Given a weakened economy offering only modest prospects for growth,

there are no grounds to believe that the labour climate will improve for

some time. While the labour market has created more net new jobs than

were lost during the recession, not all Canadians are better off today

than they were pre-recession. The Canadian economy has seen the

greatest job growth in business services, but this is not a sector that

unions have had notable success organizing, and unions experience

disproportionate membership losses when manufacturers suffer. In

effect, the economy is not doing so badly that workers will throng to

the labour movement for protection, nor is it doing so well that union

bargaining power will enjoy any resurgence sufficient to attract more


Executive Summary | The Conference Board of Canada

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members. Given this context, the labour movement must take action if

it is to survive in an increasingly hostile world—but it must go back to

basics if it hopes to thrive.

It is no mystery what actions the labour movement needs to take.

Unions must find a way to engage the types of workers who have so far

remained elusive—those working for smaller employers, independent

contractors, contingent workers, and those working in less heavily

unionized sectors of the economy. Those objectives are central to

the stated purpose of the newly created union, Unifor. Its success

in realizing that purpose will be critical to the future of the labour

movement in Canada.

The significance of these developments for both labour and management

in 2014 is that a more aggressive labour movement may alter the “tone”

of negotiations, particularly in the public sector. The tone may be more

negative and unions less willing to compromise, making it more difficult

to address mundane workplace issues that would normally be dealt with

pragmatically at the bargaining table. There is also a real possibility

of disputes over wages, since governments will be reticent to offer

increases as they struggle to bring down deficits. After several years of

wage freezes in some jurisdictions, this will not be welcome news at the

bargaining table.


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RÉSUMÉ

Perspectives des relations de travail 2014 : Retour aux sources pour le mouvement syndical

Aperçu

• le pouvoir de négociation des syndicats s’est affaibli au cours des dernières années en raison de la mondialisation, de la déréglementation et des changements dans le paysage politique canadien.

• les effets persistants de la récession de 2008 — pertes d’emplois manufacturiers et priorité continue accordée par les gouvernements à la réduction des coûts — ont accru les pressions sur les syndicats.

• les syndicats devront s’adapter à cette nouvelle réalité s’ils veulent survivre.

• les défis actuels face auront une incidence sur le ton des négociations en 2014, surtout dans le secteur public.

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v

Le syndicalisme au Canada se trouve à la croisée des chemins. Le taux de syndicalisation de la main-d’œuvre, de plus en plus marqué par une prédominance des syndicats du secteur public, a baissé depuis son niveau record des années 1980, passant d’environ 34 % à 31 %. La mondialisation et la déréglementation ont affaibli le pouvoir de négociation des syndicats, et les effets persistants de la récession de 2008 — pertes d’emplois manufacturiers et priorité continue accordée par les gouvernements à la réduction des coûts — ont accru les pressions qui s’exercent sur eux. De plus, l’échiquier politique canadien a glissé vers la droite, comme en témoigne l’élection d’un plus grand nombre de gouvernements conservateurs dans les provinces et territoires, dont plusieurs s’en sont pris directement aux droits de négociation des syndicats. D’un point de vue objectif, les syndicats doivent maintenant évoluer dans un climat politique et un environnement de négociation de plus en plus hostiles.

la conjoncture économique n’offrira pas non plus de répit aux

syndicats. Dans notre économie affaiblie, les perspectives de

croissance demeurent modestes, si bien qu’il n’y a aucune raison

d’espérer une amélioration du climat syndical avant encore un certain

temps. Même si le marché du travail a créé plus de nouveaux emplois

nets qu’il n’en a perdus durant la récession, les Canadiens ne s’en

tirent pas tous mieux aujourd’hui qu’avant la récession. C’est dans le

secteur des services aux entreprises que l’économie canadienne a

enregistré la plus forte croissance de l’emploi, mais ce n’est pas un

secteur où les syndicats se sont implantés avec un succès notable.

Résumé | le Conference Board du Canada



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vi

En outre, les syndicats voient leur nombre d’adhérents diminuer de

façon disproportionnée lorsque le secteur manufacturier bat de l’aile.

En fait, l’économie ne va pas mal au point où les travailleurs recherchent

massivement la protection des syndicats, mais elle ne va pas assez bien

non plus pour que le pouvoir de négociation des syndicats connaisse un

regain suffisant pour attirer davantage de membres. Dans ce contexte,

le mouvement syndical doit agir s’il veut survivre dans un monde de

plus en plus hostile — mais il doit effectuer un retour aux sources

pour espérer s’épanouir.

les mesures qu’il doit prendre n’ont rien de mystérieux. En effet, les

syndicats doivent trouver une manière d’interpeler les catégories de

travailleurs qu’ils ont eu, jusque-là, de la difficulté à attirer, soit les

employés de petites entreprises, les entrepreneurs indépendants, les

travailleurs occasionnels et les employés de secteurs de l’économie

moins fortement syndiqués. Ces initiatives sont à la base de l’objectif

que s’est donné le syndicat nouvellement créé, Unifor. Sa capacité

à atteindre cet objectif sera cruciale pour l’avenir du syndicalisme

au Canada.

Ces nouveaux développements seront déterminants pour les parties

patronale et syndicale en 2014 dans la mesure où un mouvement

syndical plus énergique pourrait changer le « ton » des négociations,

surtout dans le secteur public. Ce ton risque d’être plus négatif et

les syndicats pourraient être moins enclins à faire des compromis,

rendant ainsi plus difficiles les discussions entourant les problèmes

courants en milieu de travail qui se règlent normalement de façon

pragmatique à la table des négociations. Il faut également envisager

la possibilité très réelle de différends au sujet des salaires puisque les

gouvernements, employés à réduire leurs déficits, seront réticents à

offrir des augmentations. Après plusieurs années de gel salarial dans

certaines provinces, cette attitude ne sera pas bienvenue à la table

des négociations.

PERSPECTIVES DES RElATIONS DE TRAVAIl 2014 Retour aux sources pour le mouvement syndical




CHAPTER 1

The State of the Unions

Chapter Summary

• The political and bargaining environment is becoming increasingly hostile for unions.

• In order to thrive, the labour movement needs to go “back to basics” and focus on growing their ranks.

• Both employers and unions are growing increasingly concerned about government intervention in labour disputes.


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Back to Basics

Union coverage now sits at 31 per cent of Canadians who either belong to a union or are covered by a collective agreement or union contract. Since 1997, union coverage in the public sector has remained virtually unchanged, with about three-quarters of all public servants covered by a union contract. In contrast, union coverage in the private sector has declined from 20 per cent over this time period, and now sits at just over 17 per cent. (See Chart 1.)

In the face of globalization, deregulation, and growing worker

indifference, there is little doubt that the power of the labour movement

has been diminished in recent decades. Private sector employers have

faced considerable challenges in adapting to the changing economic

environment as well, and it may be argued that unions simply failed

Chart 1Union Coverage by Sector(per cent)

*2013 data are from January to OctoberSources: The Conference Board of Canada; Statistics Canada.

1997 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13*0

1020304050607080

Overall Public Private


Chapter 1 | The Conference Board of Canada


to adapt as effectively as they might have. It is also apparent that the

political sentiment demonstrated by the federal government and various

provincial governments in recent years—intervention in labour disputes,

involvement in the bargaining process, and efforts to reduce or eliminate

benefits long entrenched in collective agreements—constitutes a hostile

political and bargaining environment.

At the federal level, most of the legislative initiatives seeking to limit

union bargaining power have been private members’ bills, which,

historically, are rarely enacted. But unions appear to be taking the

threat much more seriously than they have in the past. There is little

evidence that these initiatives are being widely supported by the

employer community as necessary for effectively managing their

workplaces. Rather, the implicit support of private member’s bills by

government serves to undermine the process of tripartite consultation

because the normal review processes used when introducing

government legislation are circumvented. Similarly, the inclusion

of provisions affecting labour relations in the government’s budget

implementation bill serves the same purpose.

The preceding concerns apply to any private member’s bill affecting

labour relations, such as those previously introduced by the liberals and

the Bloc Québécois with respect to the introduction of anti-replacement

worker legislation similar to that found in Quebec. The wider employer

community prefers labour relations stability to politicization of the

process. There is a long history of engagement in tripartite processes

dealing with labour relations matters at the federal level, but those

processes have been used with less frequency and less effect in

recent years.

The union participants in this year’s Industrial Relations Roundtable at

the Conference Board expressed particular concern about Bill C-525,

a parliamentary private member’s bill that would require a mandatory

secret ballot vote rather than automatic certification based on signed

union membership cards. More critically, it would require that a majority

of the employees in the bargaining unit—rather than a majority of those

employees casting ballots—vote to certify a union. In the decertification

The implicit support of private member’s bills by government serves to undermine the process of tripartite consultation.


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process, more than 50 per cent of the entire bargaining unit would

need to vote in favour of the union, or the union would be decertified.

Clearly, these proposed changes affecting workers in the public and

private sectors under federal jurisdiction would substantially raise the

bar required for certification while making decertification much likelier.

Concerns about increasing government intervention in labour disputes

are not restricted to unions. Many employers understand that major

issues such as pensions, which may affect the very future of the

company, are not best resolved by reference to third parties because

the outcomes are often seen as compromises that do not address

the fundamental problem. Again, it should not be assumed that

increased government intervention is being widely supported by

the employer community.

Given this context, the labour movement must take action if it is to

survive in an increasingly hostile world—but it must go back to basics

if it hopes to thrive. Simply put, that means organizing more workers in

more industries.

Some unions are already taking note. In 2012, the Service Employees

International Union (SEIU) supported Walmart workers in the U.S.,

as thousands of workers in 28 different locations walked off the job

simultaneously demanding a “living wage” from their employer. SEIU

supported similar actions by workers in the fast-food sector. In August

2013, following a year of various protests, workers from more than

60 cities across the U.S. walked off the job demanding the minimum

wage be raised to $15 an hour (up from the federal minimum of

$7.25 an hour). The workers were also hoping to be able to unionize,

without retaliation, in order to be able to collectively bargain for a

“living wage.” While these actions may not have caused serious

economic harm to the employers involved, they did serve to raise

awareness among the workers involved. That is a necessary, although

not sufficient, condition, for increasing unionization in those industries.

Concerns about increasing government intervention in labour disputes are not restricted to unions.




According to louis Erlichman, Research Director for the International

Association of Machinists and Aerospace Workers (IAMAW), “Unions

have been in a permanent existential crisis for years,” and he questions

whether the Wagner Act model is dead as a result of employer hostility.

The Wagner Act—formally, the National Labor Relations Act—served

to guarantee the right of private sector workers to organize into trade

unions, engage in collective bargaining, and exercise the right to strike.

However, it may be argued that Erlichman’s pessimism has more

application in the context of the U.S. labour movement, where employer

hostility has been more visible and the union density rate has fallen to

about 12 per cent of the labour force, than in Canada.

He wonders if unions can change and how. He believes renewal will

require unions to re-establish their legitimacy. They must try to reach

out to re-engage their own members and engage the public at large,

particularly the unemployed. Growing income inequality helps people

see the value of unions, and has helped the labour movement make a

lot of gains in the past. Unions need to maintain their union wage and

benefit premiums if they are to succeed in organizing more workplaces.

Unions are risk averse, but they have to take more direct political action,

and more seriously consider alternative means of organizing.


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CHAPTER 2

The Economic Outlook

Chapter Summary

• Global economic growth will be stronger, but uneven, in 2014.

• Despite the recent sequestration, prospects for the U.S. economy look brighter due to increasing energy self-reliance and growing strength in the private sector.

• Canada can expect only modest economic growth over the short to medium term.




The Global Outlook

The Global economic growth has been weak for a number of years, but stronger, if uneven, growth is anticipated in 2014, as Chart 2 indicates. China, which is now one of the world’s primary engines of growth, is expected to stabilize in the 7 to 8 per cent growth range as domestic demand strengthens. Similarly, there is increasing confidence that the U.S. has turned a corner and the road to a full recovery has finally begun. However, the other BRICS (Brazil, Russia, India, China, and South Africa) economies and emerging markets have slowed somewhat, although at sustainable levels. Finally, many Western European countries are in recession, but it is expected that they too will recover in 2014—albeit at very low growth rates. Unfortunately, considerable uncertainty remains, and the downside risks appear greater than any upside potential.

Chart 2Uneven Growth in the Global Economy(percentage change in real GDP)

Sources: The Conference Board of Canada; Statistics Canada.

Japan EU North America

Latin America

Asia Pacific

Asia Pacific (excl. Japan)

−101234567

2012 2013 2014


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The U.S. Outlook

It is expected that the U.S. will achieve modest near-term economic

growth of about 2 per cent this year, but the economy will pick up

in 2014. (See Chart 3.) The factors fuelling that rebound include

increasing energy self-reliance resulting from new, sophisticated

extraction technologies and growing strength in the private sector—

jobs, housing, automobiles, and investment. The Federal Reserve

appears to have clarified its policy of “tapering down” quantitative

easing and it is now expected that short-term rates will remain at

current levels until 2015. Only then will markets have to face the pain

of weaning themselves from cheap money. However, growth is being

hampered by ongoing fiscal turmoil, higher taxes, and spending cuts

caused by budget sequestration, not to mention the recent lockout of

government workers and the potential for more uncertainty surrounding

the debt ceiling. The apparent inability of America’s politicians to focus

on conducting the nation’s business while they engage in base politics

does not build confidence or certainty in the economy.

Chart 3U.S. Real GDP Growth(percentage change)

f = forecastSources: The Conference Board of Canada; Bureau of Economic Analysis, U.S. Department of Commerce.

2003 04 05 06 07 08 09 10 11 12 13f 14f 15f−3−2−1

01234

Forecast




The Canadian Outlook

If China is, in fact, beginning an era of single-digit growth rates, it is

probable that there will likely be a dampening effect on commodity

prices. That said, the longer-term outlook for resources remains positive

and the income boost from resources will continue. As well, there are

grounds for believing that the U.S. economy is beginning a period

of higher, sustained growth. This should lead to increased exports,

including manufactured goods, which should offset lower levels of

growth elsewhere. However, Canada still faces elevated global risks

that could hinder its prospects.

Unfortunately, there are a number of factors that are contributing to

Canada’s less-than-stellar performance. Pedro Antunes, Director,

National and Provincial Forecast at The Conference Board of Canada,

points to five issues of particular concern: the Canadian consumer is

overstretched and higher interest rates will dampen consumption; the

external economy and capacity constraints in the energy sector are

limiting trade growth; the business sector has been increasing private

investment, but the pace won’t be maintained; fiscal restraint will

continue through the foreseeable future; and labour markets will continue

to tighten, thereby limiting Canada’s growth potential. As well, according

to a new measure developed by the organization World Economics, the

Canadian dollar is overvalued by more than 10 per cent,1 something that

only serves to reduce the competiveness of domestic producers.

Gross domestic product (GDP) can be measured in different ways, but in

general it refers to the total market value of all final goods and services

produced in the country in a given year; and most commonly, the final

GDP figure is equal to total consumer, investment, and government

spending, plus the value of exports minus the value of imports. Only a

cursory look at the forecasts for these components of the economy is

required to understand that we may, at best, expect modest growth over

the short to medium terms. (See Charts 4, 5, 6, 7, and 8.) According

1 Babad, “Canadian Dollar Overvalued by 10%, New Measure Shows.”

A number of factors are contributing to Canada’s less-than-stellar economic performance.


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to Antunes, “The long-term challenges for Canadian business include

adapting to a strong currency, dealing with an aging workforce, and

embracing innovation.”

Chart 4Canadian Real Consumer Spending(percentage change)

f = forecastSources: The Conference Board of Canada; Statistics Canada.

Chart 5Real Business Investment Growth in Canada(percentage change)


2003 04 05 06 07 08 09 10 11 12 13f 14f 15f0

0.51.01.52.02.53.03.54.04.5

Forecast

2003 04 05 06 07 08 09 10 11 12 13f 14f 15f−25−20−15−10

−505

1015

Forecast




Chart 6Real Government Spending on Goods, Services, and Capital(percentage change)


Chart 7Canadian Export Volumes(percentage change)


2003 04 05 06 07 08 09 10 11 12 13f 14f 15f−1

0

123

45

Forecast

2003 04 05 06 07 08 09 10 11 12 13f 14f 15f−15

−10

−5

0

5

10Forecast


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On a brighter note, Canada should see relatively solid employment

growth, as illustrated in Chart 9, and real wages are expected to

increase, as they have for much of the last decade. (See Chart 10.)

However, productivity has not been increasing as fast as wages, so the

sustainability of real wage growth may be in question.

Chart 8Real GDP Growth in Canada(percentage change)


Chart 9Employment Growth in Canada(percentage change)


2003 04 05 06 07 08 09 10 11 12 13f 14f 15f−3−2−1

01234

Forecast

2003 04 05 06 07 08 09 10 11 12 13f 14f 15f−2.0−1.5−1.0−0.5

00.51.01.52.02.5

Forecast




The Canadian labour market has now created more net new jobs than

were lost in the recession. However, this is of little comfort to those who

lost their job at the time, and who may not have found new employment

or are now working in a job paying lower wages. The greatest job growth

has been in business services, which dwarfs the number of jobs lost in

manufacturing. (See Chart 11.) This dramatically demonstrates that the

economy is undergoing a fundamental structural change.

Chart 10Growth in Industrial Composite Average(percentage change)


Chart 11Canada’s Employment Growth, 2002–2012(level change in 000s)


2003 04 05 06 07 08 09 10 11 12 13f 14f 15f0

1

23

4

5

Average weekly wages

Consumer price index (CPI) Forecast

Primarysector

Manufacturing Construction Health, education, public

administration

Businessservices

−500

0

500

1,000

1,500


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For many, it is incongruous that the labour market may be characterized

as “tight”, and that it is expected to get tighter over the long term. From

louis Erlichman’s perspective, “The labour shortage ‘myth’ is being sold

to the public simply as an excuse to bring in temporary foreign workers,

while employers refuse to train workers, resulting in a lack of skilled

apprenticeship opportunities.”

Of course, the “tightness” of the labour market varies significantly

across regions. Stronger economic growth in the Western provinces

continues to drive higher demand for labour, which is not the case in

Central Canada or the Maritimes. Regardless of the demand for labour,

our aging population necessarily dictates its supply—older workers

participate less in the labour force. The implication is clear: Growth of

the available labour force is declining and this will act as a constraint to

Canada’s future economic growth. (See Charts 12 and 13.)

Chart 12Population Distribution by Age

Sources: The Conference Board of Canada; Statistics Canada.

0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84 88 92 96 100+0

100,000200,000300,000400,000500,000600,000700,000

2012 2035




Chart 13Labour Force Growth: Average Annual Compound Growth(per cent)


1981–90 91–00 01–05 06–10 11–20f 21–30f 31–35f0

0.4

0.8

1.21.6

2.0Forecast


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CHAPTER 3

Compensation Outlook

Chapter Summary

• Projected average base pay increases for unionized workers in 2014 are 1.5 per cent in the public sector and 2.2 per cent for the private sector.

• Projected average base pay increases for non-unionized workers in 2014 are 2.7 per cent in the public sector and 3 per cent in the private sector.

• Variance in base pay increases across regions remains high, with projected increases of 3.7 per cent in Alberta and Saskatchewan and 2.5 per cent in the Atlantic provinces.




Average Base Pay Increases

The Board’s Compensation Planning Outlook for 2014 is based on survey responses from 403 organizations representing all regions and sectors of the economy. Projected average base pay increases for non-unionized workers in 2014 are 2.9 per cent—including those organizations planning wage freezes. Increases are, again, expected to be lower in the public sector at 2.7 per cent compared to 3 per cent in the private sector. Wage increases for unionized employees in the public sector are also lower—1.5 per cent compared to 2.2 per cent for those in the private sector—which is consistent with recent trends. (See Chart 14.)

Chart 14Public and Private Sector Collectively Bargained Wage Increases and Inflation Rate, 1991–2014f(per cent)

f = forecastSources: The Conference Board of Canada; Employment and Social Development Canada.

1991 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13f 14f0123456

Public sector wage increases Private sector wage increases

Inflation rate Forecast


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The variance across regions and industries remains high. Regional

differences are significant, with projected increases of 3.7 per cent

in Alberta and Saskatchewan, while the lowest average increase is

expected to be in the Atlantic provinces at 2.5 per cent. By industry,

workers in oil and gas can expect average increases of 4.1 per cent,

while those in the health sector (where pay is projected to increase by

only 1.8 per cent) will see the smallest gains. These projections are

largely in line with actual increases paid by employers in 2013. (See

Chart 15.) With inflation forecast to be about 1.9 per cent next year,

most workers will at least realize modest real wage gains.

Chart 15Actual and Planned Compensation Increases by Region(average increase among all non-unionized employees, per cent)

Source: The Conference Board of Canada.

B.C. Alta. Sask. Man. Ont. Que. Atlanticprovinces

00.51.01.52.02.53.03.54.0

2013 actual 2014 planned



CHAPTER 4

The Bargaining Outlook

Chapter Summary

• Wages will be somewhat of a greater focus for management at the bargaining table in 2014.

• There is generally a consensus that the likelihood of labour disputes will be low in 2014, but the future is always uncertain.

• Bargaining in 2014 will be dominated by the public sector, with key negotiations taking place for federal government workers and workers in Ontario’s broader public sector.


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There is some evidence that wages will be somewhat more of the focus next year. The percentage of employers stating that wages are the priority has increased from 55 per cent in 2013 to 60 per cent in 2014. Productivity and business competitiveness continue to be key management concerns. There is little change in the issues that employers believe will be union priorities.1 (See Table 1.)

1 The Conference Board of Canada, Compensation Planning Outlook 2014.

Table 1Current Negotiation Issues(percentage of unionized organizations)

Management issues 2014 2013 Union issues 2014 2013

1. Wages 60 55 1. Wages 84 85

2. Productivity 45 36 2. Employment security 47 49

3. Business competitiveness 29 32 3. Health benefits 33 36

4. Organizational change 28 36 4. Pensions 28 29

5. Flexible work practices 27 34 5. Outsourcing and contracting out 26 26

6. Health benefits 25 22 6. Flexible work practices 19 19

7. Pensions 22 24 7. Employment and pay equity 16 14

8. Training and skills development 16 12 8. Organizational change 15 12

9. Outsourcing and contracting out 15 15 9. Training and skills development 10 8

10. Employment and pay equity 8 10 10. Productivity 5 4

11. Employment security 7 8 11. Variable pay 5 6

12. Variable pay 7 7 12. Other 4 n.a.

13. Technological change 6 5 13. Business competitiveness 3 3

14. Other 3 n.a. 14. Technological change 2 5

Note: Respondents were provided with a list of 14 possible choices and asked to indicate the top three negotiation issues for both management and union.Source: The Conference Board of Canada.




There is always a possibility that the collective bargaining process will

reach an impasse and a labour dispute may result. However, there

appears to be a general consensus that the frequency of disputes

is not expected to be great. The majority (91 per cent) of the 214

unionized organizations responding to a survey by The Conference

Board of Canada2 do not expect any work stoppages in 2014. Only

one company reported that a work stoppage “will definitely occur.”

More than half of organizations (57 per cent) rated the overall union–

management climate in their organization as cooperative. While few

reported that their relationship was uncooperative, many organizations

(37 per cent) consider their overall union-management relationship to be

neutral. Three out of four organizations (76 per cent) anticipate that the

relationship with their union counterparts will remain the same in 2014.

However, it must be noted that these results are consistent with those

reported in 2012—a year that began with two major lockouts: at the

Caterpillar locomotive plant in london, Ontario, and at the Rio Tinto

Alcan operation in Alma, Quebec. At that time, some observers predicted

a greater number of labour disputes in the future as employers adopted

a more aggressive labour relations approach to bargaining. The data

suggest that there were, in fact, significantly more disputes involving

a larger number of workers, as Chart 16 illustrates, but the “spike” in

disputes was due to strikes rather than lockouts. (See Chart 17.) It

remains to be seen what will transpire in 2014.

The bargaining calendar is dominated by negotiations in the public sector

involving more than a half-million workers in all jurisdictions employed

at the federal, provincial, and local level as well as the broader public

sector. Most of the larger bargaining units representing employees of

the federal government will be at the negotiations table in 2014, as will

essentially all workers in Ontario’s broader public sector. (See Table 2.)

2 The Conference Board of Canada, Compensation Planning Outlook 2014 : October 2013.

The bargaining calendar is dominated by negotiations in the public sector involving more than a half-million workers in all jurisdictions.


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Chart 17Number of Strikes and Lockouts(per year)

*2013 data are from January to August (Ontario data from June to August include only 500+ workers involved)Sources: The Conference Board of Canada; Employment and Social Development Canada.

1982 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13*0

100200300400500600700800

Number of strikes Number of lockouts

Chart 16Strikes and Lockouts, 1982–2013(workers; stoppages)

*2013 data are from January to August (Ontario data from June to August include only 500+ workers involved)Sources: The Conference Board of Canada; Employment and Social Development Canada.

1982 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13*0

100200300400500600700800900

Workers involved (000s)

Strikes and lockouts (10 person-days not worked)




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CHAPTER 5

The Roundtable

Chapter Summary

• Painful budget cuts, protracted organizational downsizing, unilateral changes to terms and conditions, and government intervention in collective bargaining are having an adverse impact on public sector morale and may serve to increase union militancy.

• Tight labour markets, and robust population growth, in some localized regions will complicate public sector bargaining.

• Challenges persist in the private sector as well, and unions have had to develop more realistic expectations and approaches to compensation and benefits (particularly pensions).




Public Sector Bargaining

Given Tor Veltheim’s experience with senior negotiations in Western Canada, he is uniquely placed to comment on the bargaining process and issues of concern in those jurisdictions. He notes that B.C. has the most sophisticated coordinated bargaining structure governing the broader public sector. Manitoba and Saskatchewan have also coordinated public sector bargaining through somewhat smaller structures for the last three or four decades. Alberta has more recently established a system to coordinate public sector bargaining. The existence of bargaining oversight structures is more important than we might think. When the broader public sector lacks centralized coordination, it compromises the ability of government to ensure that negotiations mandates are adhered to and budget objectives achieved.

However, in none of these jurisdictions do municipal governments

fall under provincial control for purposes of collective bargaining. As

a result, Veltheim says, “There have been increasing concerns that

local government has not been exercising the same restraint as the

provinces.” A review of average annual wage settlements across

jurisdictions for selected functions1 suggests that municipal wage

rates have increased more than at the provincial level, as Chart 18

indicates, and the cumulative differential has been increasing over the

1 The data reported in Charts 18 and 19 include regulatory and administrative public services directly employed by the federal, provincial, and municipal governments, but excludes fire, police, and protective services—the latter services tend to be subject to arbitration and their wages have increased at substantially higher rates than the wages of other public services.


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last decade. (See Chart 19.) This trend appears to have accelerated

since the recession in 2008. This phenomenon may be explained by

the fact that property taxes provide the primary revenue source for local

government and these are not directly affected by cyclical economic

change. In contrast, federal and provincial revenue is primarily derived

from income and corporate taxation, which are directly affected by

changes in economic activity.

Chart 18Average Annual Wage Settlements (Select Positions), 1997–2013(percentage change)

Sources: The Conference Board of Canada; Employment and Social Development Canada.

Chart 19Compound Annual Wage Growth Rate (Select Positions)(base 100 dollars)

Sources: The Conference Board of Canada; Employment and Social Development Canada.

1997 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 130

123

45

Federal Provincial Municipal

1997 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 1390

100110120130140150160

Federal Provincial Municipal




Saskatchewan has adopted a “market competitive” approach, which is

now central to its thinking. The focus on targeted, market comparators—

not just sector to sector, but job to job—is a fundamental change from

the “one-size-fits-all” model historically adopted by government, to one

characterized by differentiated wage settlements.

All of the Western provinces have been practising restraint for some

time. After concluding a round of bargaining that froze wages in most

cases, B.C. is in the process of attempting to implement its “cooperative

gains” mandate cycle where cost savings found outside the collective

agreement can be applied to contract enhancements. In Saskatchewan,

there have been a number of settlements averaging less than 2 per cent

over four years, and involving some productivity gains for management.

Manitoba has negotiated two years of wage freezes, and it is expected

that the province will target a continuation of modest settlements with

some flexibility depending on the extent of efficiency gains achieved. In

the recent past, the Government of Alberta has negotiated settlements

that included a freeze component. In the current round, bargaining

concluded with a number of settlements that incorporated three years

of wage freezes and an increase of 2 per cent in the fourth year.

Veltheim notes: “This follows a long period [during which] wage

increases surpassed the rate of CPI increases by a considerable

margin, and public sector employees realized considerable gains

relative to their comparators in neighbouring jurisdictions.”

Tight labour markets are localized in some regions in Alberta and

Saskatchewan, something that has complicated public sector bargaining,

and will continue to, as it creates wage pressures. As well, robust

population growth brings increased demand for a range of public

services, placing pressure on government to grow the ranks of public

servants in order to meet the public’s needs.

From Veltheim’s perspective, restraint in the Western provinces is

driven by the sense that “negotiated compensation increases must be

sustainable over the long term.” The challenges relate to the need to

reconcile public sector union expectations with a sustainable market

competitive approach to collective bargaining. Not surprisingly, unions

The Western provinces have been practising restraint for some time.


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are loath to give up past gains, and they will cling tenaciously to any

benefit that they have been able to obtain. Any efforts to move to

a market competitive approach will be viewed by unions with some

suspicion. He also sees a need to restructure collective agreements

to better integrate younger workers. The emphasis on seniority serves

to keep new employees in part-time employment or limits their earning

potential because of inequitable access to overtime opportunities. Many

agreements in the public sector also contain restrictions in the movement

of employees across work units, making staffing-to-workload a major

problem for the employer. For Veltheim, “The unintended consequence

of such restrictions is that employers may be motivated to contract out

public sector work for that reason, rather than because of any lack of

capability on the part of employees.”

In Doug Marshall’s view, “governments don’t value public services, or

the employees who deliver them,” and the political climate is now having

a greater impact at the bargaining table. “Government is not just out

to win, but to destroy unions with a steady attack on wages, benefits,

and recognition,” says Marshall, National President of the Union of

National Employees.

Budget cuts have created uncertainty and dislocation in their application.

After a series of annual targeted department reviews over several years,

followed by major across the board cuts beginning in March 2012—

where departments were not allowed to trade off cost savings—the

Union of National Employees lost 4,000 of its 26,000 members. Cuts

have been slow and painful, and some employees have had to compete

for their own jobs, which is having a severely adverse impact on morale.

As well, the government has been making unilateral changes in a

number of areas not subject to “normal” collective bargaining pursuant

to the Public Service Labour Relations Act (PSlRA). The government

has also announced changes to the terms and conditions of employment

contained in collective agreements, such as replacing banked sick leave

with a new short-term disability plan. The federal government asserted

that absenteeism was 18.2 days per employee and that banked sick

leave had created a $5-billion contingent liability.




In 2001 and 2004, there were back-to-back strikes by the Public Service

Alliance of Canada (PSAC), followed by two negotiated settlements.

Marshall believes that we will see more strikes in the next round of

bargaining with public service unions. As an example, he points to the

longest strike in public service history (just recently settled) by foreign

service officers—a group not known for its union militancy. He sees

fear and frustration turning to anger, and thinks “younger workers are

less patient and they won’t take it anymore.” He also expects that we

will see more government intervention in the bargaining process. Of

particular concern, he believes that the federal government will use its

executive power as government, rather than the powers related to its

role as an employer.

This confusing confluence of roles may best be demonstrated by the

government’s handling of negotiations with PSAC and the bargaining

union of Canada Border Service Agency employees. The Federal Court

of Canada recently found that the union was denied procedural fairness

when the minister responsible for the PSlRA ordered the Public Service

labour Relations Board (PSlRB) to conduct a vote on Treasury Board’s

final contract offer, at the request of its President, without providing

notice or opportunity for the union to make submissions to the PSlRB.2

The power of the federal government to order such final offer votes flows

from amendments to the Public Service Labour Relations Act in 2005,

and is common to most jurisdictions. However, in jurisdictions such as

B.C., any application for final offer votes is processed by the labour

Relations Board, not the minister responsible. The latter process is less

likely to lead to confusion between the political and administrative roles

of government.

The big bargaining issues in 2014 will be sick leave, layoff protection,

seniority, union security, and threats to pensions and health benefits. In

Marshall’s view, “The next round of bargaining will have a greater impact

on [the] quality of work life than previous rounds.” Marshall acknowledges

that governments want to show that they are balancing the books, but

2 Butler, “Federal Court Halts Forced Contract Vote by Border Guards.”

Marshall expects we will see more government intervention in the bargaining process.


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unions also need to show they are doing something for their members.

He believes that governments have created the position they are now in,

and must be held responsible for their actions. Governments should not

be focused solely on reducing costs without considering the value of the

public services that they provide to Canadians.

Don Sinclair, Chief Executive Officer of Ontario’s College Employer

Council, sees a “perfect storm” brewing as all major public sector

groups—health, colleges, elementary, and secondary schools, as well

as the Ontario public service—will be at the table in 2014. With most

of the public and broader public sector all coming off a two-year pause

in compensation, the stars are aligned. Given the province’s weakened

fiscal state, negotiations will be challenging. Notwithstanding a minority

government or potential spring election, it will be messy as the reality

of the province’s economic situation (which hasn’t really changed in

two years) comes to bear at the numerous negotiation tables across

the province.

Previously, the government played a direct role in centralized bargaining

for the college sector, but this responsibility was transferred with the

creation of the College Employer Council in April 2010, which is owned

and operated by the colleges. Insofar as any wage increases have to

be funded by the colleges within their existing budgets, it is unlikely

that bargaining will be easy. Sinclair’s main concern is: “With mature

collective agreements and diminished financial resources in the college

sector, both parties at the bargaining table will need new or creative

solutions for the longer term, as our current path is not sustainable.”

Sinclair believes that even with the fiscal challenges confronting the

public sector, the influx of new workers due to sheer demographics

will, over time, change the conversation at negotiations if the employers

and unions want to remain relevant. An example: In his view, while

acknowledging that there is no supporting empirical evidence, “new

workers have a preference for meritocracy in the workplace, but this has

not been reflected in bargaining table dynamics as yet.” To the extent

that Ontario’s public sector unions cannot realistically expect significant

wage increases, if any, to be offered in 2014, unresolved matters from

All major public sector groups—health, colleges, elementary, and secondary schools, as well as the Ontario public service—will be at the table in 2014.




previous rounds such as job security, academic freedom, online learning,

and workload flexibility will create an environment for a difficult round

of negotiations.

For Mike Mahar, Canadian Director of the Amalgamated Transit Union,

Canadian Council, from a labour perspective, “it is a good time to be in

public transit.” Public transit growth is an increasingly relevant political

issue since there is strong public support for continued investment.

Effective and efficient public transit is essential to a healthy economy. It

is also good social policy because it is green. While public transit is also

an infrastructure investment with demonstrated returns, development

has not kept pace with demand. Most governments support transit in

principle, but the heavy lifting is done by local government—100 per

cent of operating budgets are funded at the local level. Certainly,

there is also considerable provincial funding, but funding is ad hoc

and relatively low at the federal level. Municipalities can raise taxes

to fund their operations, but governments at all levels need to consider

increasing taxes in certain areas (e.g., royalties, corporate taxes) if

the necessary investments in public transportation are to be made.

While there may be strong support for public transit, the bargaining

climate is not as positive. In spite of the increased cost of living, wage

rates are not keeping pace in some regions such as Newfoundland

and Saskatchewan. Wages for transit workers in these regions are

traditionally low, and unions are having a difficult time negotiating

wage increases that reflect the current economic reality. As well,

some workers are leaving the industry because it is relatively easy

for transit workers to get alternative work at higher wages in these

booming economies.

A major bargaining issue for the union relates to improving working

conditions that will reduce the high level of employee stress. Buses

are now built for faster speed and higher productivity, but no time is

being built into trip schedules for washroom breaks. In addition, there

are growing concerns about safety and violence in the workplace as

attacks on drivers are increasing. The ATU expects wage increases to be

in the 2.8 to 3.2 per cent range, and the union hopes that legislation to


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better protect transit employees will be introduced. Mahar is concerned

that there is pressure to move toward “target benefit”3 pension plans,

notwithstanding that some pension plans are actually in good shape.

In his view, governments are blaming anything negative they can on

unions, including deficits, and “it is absurd” for groups like the Canadian

Taxpayers Federation in Alberta “to use flooding in the province as a

reason for rolling back the wages of public sector workers, and equally

absurd for governments to spin deficits as grounds for continued public

sector wage restraint.” Given this environment, he recognizes that

negative public sentiment toward public sector unions is an issue that

has to be addressed. He says the Canadian labour Congress (ClC)

and its affiliates know that the labour movement has to do a better job

of publicizing the benefits that unions provide to society, and the ClC

has initiated a national advertising campaign to that effect.

Private Sector Bargaining

louis Erlichman is under no illusions that bargaining will be anything

but difficult for 2014 and years to come. The union movement is under

attack. Since the 2008 financial crisis, public policy has been focused

on restraining labour costs rather than reforming the financial system.

Employers and politicians have used the recession to go after workers

more aggressively, and governments are increasingly expressing anti-

union sentiments while undermining the bargaining process.

The federal government effectively imposed a settlement on his union in

the Air Canada case, with little consideration for the impact on collective

bargaining. In his view: “If there is no risk of a strike because people

know workers will be legislated back to work, there also isn’t a cost

attached to not reaching a deal.” This creates an unhealthy “chilling

effect” in collective bargaining. He expects continued attacks on the

Rand formula, and believes a proposal by the Progressive Conservative

3 Target benefit plans are a type of pension plan that involve fixed contributions. Plan mem-bers share some of the risk, as benefits are adjusted based on the plan’s financial status.




Party of Ontario to overhaul collective bargaining legislation, including

“right to work” provisions, is a real threat to unions that cannot be readily

dismissed. From his perspective, “The environment has not been so anti-

union since the 1930s.”

IAMAW members have been particularly hurt by the downturn in

manufacturing over the last 15 years and plant closures in Ontario,

which was exacerbated by the financial crisis in 2008. To survive, the

union is “basically in the business of organizing anybody that breathes,

including the service sector where the jobs are.”

Erlichman believes that most unions have generally been realistic about

compensation expectations. For example, the IAMAW has negotiated a

“target benefit” plan to help alleviate pressure on pension plans, and it

has signed a long-term collective agreement with Bombardier, contingent

on building its CSeries jets in Canada. However, the members in some

bargaining units have lost the expectation of getting ahead, and the

locals are simply trying to hang on to what they have. Given this

difficult climate, the union must continue to fight to resist contracting

out, and cannot accept adoption of two-tier wage systems, which are

destabilizing in the workplace and create long-term structural problems.

The issue of two-tier wage systems is particularly problematic given the

pressure from some employers, such as those in the auto industry, to

adopt such systems. Avoiding the destabilizing effect of two-tier wage

systems and maintaining cohesion among union members over the

long term is vital to the labour movement, and key to its future. How

unions respond to the issue at the bargaining table—push back, or

find alternative solutions—will be critical.

For Courtney Francis, President of ZipTrack Inc., the taxi industry faces

a number of challenges. local government controls the number of

taxi licences, so companies such as Blue line have little opportunity

to increase revenue by increasing the number of cabs. They can only

expand by adding operations in other regions. Taxi operating expenses


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have been increasing to levels that make it difficult for drivers to afford

licences. Increased competition from car-sharing enterprises, whether

for-profit or cooperative models, is also starting to have an impact.

He sees the taxi industry as being unique in labour relations terms.

Drivers may own their cars (single-plate owners), lease a car from a

single-plate owner, or lease a car from members of the “owners group.”

Drivers working for Blue line Taxi are represented by Unifor, and are

either employees or dependent contractors. They pay a flat fee to work

at the company’s concessions and taxi stands, for the roof sign, and for

dispatch services. Drivers covered by the collective agreement set their

own hours and can rent their cars to other drivers.

A major issue for the industry relates to the uncertain status of drivers. If

drivers are deemed to be employees rather than contractors, Workplace

Safety and Insurance Board (WSIB) premiums would apply. These

WSIB premiums would need to be satisfied at considerable cost to the

employer. A re-opener in the collective agreement is in place in that

event. The substance of bargaining necessarily reflects the nature of

the industry. The union attempts to negotiate lower rates paid to the

company for dispatch and other services by drivers, while the industry

negotiates with local government to increase taxi rates based on the

taxi cost index.

It is not uncommon for a single-plate owner or lessee to employ a driver

and, strictly speaking, both the “employer” and “employee” are covered

by the collective agreement and both are represented by the union. Not

surprisingly, the grievance process differs from that in most agreements.

Specifically, drivers employed by single-plate lessees may not grieve

matters in dispute between the driver and single-plate owner. Instead, a

joint union and company committee will be set up to assist in resolving

disputes. The ability to cope with ambiguity may be a necessary quality

to succeed in the industry. Unions may also have to more actively look

to non-traditional workplaces, such as the taxi industry, in their effort to

increase membership.



CHAPTER 6

Conclusion

Chapter Summary

• Unions are increasingly under threat and will need to expand their membership base to non-traditional workplaces and sectors in order to survive in the long term.

• There is potential for volatility in public sector bargaining due to what is seen by the labour movement as an attack on public servants.

• Whether in the public or private sector, both sides will need to focus on solving problems to ensure wages and benefit are sustainable in the long term.


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Globalization makes it critical for Canada to have a highly productive and competitive labour force. Businesses are in a better position today than ever before to more readily move from unionized, high-wage regions to those with lower costs. Not surprisingly, unions strongly oppose these moves, characterizing the results as “a race to the bottom.”

Canada’s social and political landscape is also changing. What was

viewed in the past as idle expressions of anti-union sentiment on

the part of politicians are starting to be taken more seriously. While

some of the debates about changes to union bargaining rights are not

new, it does seem that the environment is becoming more hostile for

union advocates.

Coupled with this, the Canadian economy will likely offer only modest

prospects for wage gains at the bargaining table. Even though workers

covered by a collective agreement continue to enjoy a wage premium,

lower wage gains will make it increasingly difficult for unions to

demonstrate to workers the benefits of a unionized job. Canada’s

economy is continuing to shift, and job growth is taking place largely

in sectors that have been notoriously difficult for unions to organize,

such as the services sector.

Given all of these factors, without a change in strategy, the long-term

future does seem rather bleak for unions. But in the final analysis,

the labour movement knows what it has to do if it is to thrive in

future. By organizing more workers in workplaces and sectors that

have not traditionally been unionized, unions can grow their ranks.

It does seem as if there are some groups of workers, such as those

working in minimum-wage service sector jobs that may be receptive to

these overtures.

Job growth is taking place largely in sectors that have been notoriously difficult for unions to organize, such as the services sector.




Negotiations have the potential to be volatile in 2014, particularly in

the public sector. Tensions have been mounting, and the tone from

both sides seems less collaborative than it has for many years. In

jurisdictions where fiscal deficits are being brought under control—such

as the federal government—there is now potential for disputes over

wages, a rare event in recent years. The Office of the Parliamentary

Budget Officer released a report earlier this fall indicating that real

wages in the federal public service have increased only slightly over the

10-year period ending 2012.1 The timing of the report may be welcome

by federal public sector unions, but it may well exacerbate an already

difficult round of bargaining.

In order for negotiations to be constructive in 2014, it will be important

for both sides at the table to focus on collective problem-solving. It is

in the interest of both parties to ensure the long-term sustainability of

wages and benefits.

Tell us how we’re doing—rate this publication.

www.conferenceboard.ca/e-library/abstract.aspx?did=5906

1 Office of the Parliamentary Budget Officer, Federal Public Service Wage Growth: 2001–02 to 2011–12.


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APPENDIX A

Bibliography

Babad, Michael. “Canadian Dollar Overvalued by 10%,

New Measure Shows.” The Globe and Mail, October 15, 2013.

www.theglobeandmail.com/report-on-business/top-business-stories/

canadian-dollar-overvalued-by-10-new-measure-shows/article14866068/.

Butler, Don. “Federal Court Halts Forced Contract Vote by Border

Guards.” The Ottawa Citizen, September 19, 2013.

www.ottawacitizen.com/business/Federal+Court+halts+

forced+contract+vote+border+guards/8934175/story.html.

Office of the Parliamentary Budget Officer. Federal Public

Service Wage Growth: 2001–02 to 2011–12. Ottawa: PBO, 2013.

www.pbo-dpb.gc.ca/files/files/Federal_Public_Service_Wage_EN.pdf.

The Conference Board of Canada. Compensation Planning

Outlook 2014. Ottawa: CBoC, 2013. www.conferenceboard.ca/

e-library/abstract.aspx?did=5737.


http://www.theglobeandmail.com/report-on-business/top-business-stories/canadian-dollar-overvalued-by-10-new-measure-shows/article14866068/

http://www.theglobeandmail.com/report-on-business/top-business-stories/canadian-dollar-overvalued-by-10-new-measure-shows/article14866068/

http://www.ottawacitizen.com/business/Federal+Court+halts+forced+contract+vote+border+guards/8934175/story.html

http://www.ottawacitizen.com/business/Federal+Court+halts+forced+contract+vote+border+guards/8934175/story.html

http://www.pbo-dpb.gc.ca/files/files/Federal_Public_Service_Wage_EN.pdf

http://www.conferenceboard.ca/e-library/abstract.aspx?did=5737

http://www.conferenceboard.ca/e-library/abstract.aspx?did=5737

About The Conference Board of Canada

We are:

• The foremost independent, not-for-profit, applied research organization in Canada.

• Objective and non-partisan. We do not lobby for specific interests.• Funded exclusively through the fees we charge for services to the

private and public sectors.• Experts in running conferences but also at conducting, publishing,

and disseminating research; helping people network; developing individual leadership skills; and building organizational capacity.

• Specialists in economic trends, as well as organizational performance and public policy issues.

• Not a government department or agency, although we are often hired to provide services for all levels of government.

• Independent from, but affiliated with, The Conference Board, Inc. of New York, which serves nearly 2,000 companies in 60 nations and has offices in Brussels and Hong Kong.


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