September 10, 2009

Labour relations

Fraser Institute report calls for more ‘balance’ in union rules

VINCE VERSACE

staff writer

An increased balance in labour relations laws would help drive employment growth in Canada, a recent study by the Fraser Institute concludes.

“Canadian labour relations laws inhibit the proper and efficient functioning of the labour market because they favour one group over another and prevent innovation and flexibility,” concluded Niels Veldhuis, Fraser Institute senior economist and co-author of An Empirical Comparison of Labour Relations Laws in Canada and the United States: 2009 Edition.

Organizing a union, union security and regulation of unionized firms were the three categories which helped create the index of labour relations laws for the study.

Veldhuis found that Canada’s current labour relations laws are “overly prescriptive” and impose a resolution to labour disputes rather than “fostering negotiation between employers and employees.”

More flexible labour markets enjoy better market performance, he added. Workers in a “flexible labour market” can easily shift from one industry or region to another and it allows employers to change the mix of capital and labour to respond to market changes.

The study assessed labour relations laws in the private sector in all Canadian provinces, the Canadian federal jurisdiction, and the 50 U.S. states.

Of the Canadian jurisdictions measured, Alberta has the most balanced and “least prescriptive” labour relations laws, followed by Ontario and Nova Scotia.

Quebec, followed by the Canadian federal government, were both at the back of the pack with the “most rigid and biased labour relations laws”, according to the study.

“Alberta stands ahead of other Canadian jurisdictions although it falls well short of competing with U.S. states,” explained Veldhuis. “Alberta has the same basic failing as all other Canadian jurisdictions in areas such as successor rights and the absence of worker choice laws.”

Dave McDonald, chairman of the Merit Openshop Contractors Association of Ontario, said that Ontario is the only jurisdiction in North America that forces municipalities to choose between open shop and union and that is “absolutely unique and unacceptable”.

“One thing missing in this report is that Ontario is one of the worst jurisdictions when it comes to areas of construction law,” added McDonald.

The highest ranking jurisdictions in the study were the 22 U.S. states with right-to-work regulations that allow employees to opt out of joining a union or paying dues. Canadian workers do not have the same level of choice when it comes to joining and financially supporting a union.

“Instead, Canadian unionized workers are forced to pay for the political or social activities of unions with which they may not agree,” Veldhuis concluded.

Pat Dillon, business manager for the Provincial Building and Construction Trades Council of Ontario, disagrees with the report’s conclusion about unions not being a driver of employment growth.

“The more you de-unionize the smaller the middle class becomes, the larger the unions, the larger the middle class and the more vibrant the economy,” Dillon said.

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