This piece is one of a series of high-profile Canadians commenting on the Canadian Chamber of Commerce's Top 10 reasons Canadian competitiveness is dropping.
As dean of the Edwards School of Business at the University of Saskatchewan, Daphne Taras has to deal with four separate unions. So it’s probably a good thing the former ballet dancer has not only a master’s degree in political science and an MBA, but also both a master’s in law and a PhD in labour and employment relations. We talked to Dr. Taras about a Conference Board of Canada report that says our inflexible labour code is hurting our ability to compete globally.
So, give me an overview of the state of this country’s labour law.
Canada has a problem, because it has the most decentralized labour relations in the world, where each province has its own labour code, and has exclusive jurisdiction over the health and welfare of its citizens. And the federal government has a code for the federally regulated sectors — banks, transportation and so on. Most of the codes are fundamentally very similar, but for employers, it is a very complex landscape.
When the Conference Board of Canada complains that Canada’s labour code is not flexible enough, what do you take that to mean?
I don’t agree that the labour code itself is the cause of the lack of flexibility. Our code sets up rules, and those rules are not that much different than what exists in, for example, the United States, which we have always held up as being more globally competitive, until recently.
So what do you think the problem is?
I travel all over the world, and I’m keenly aware of our aging infrastructure.
We’re pretty tired and saggy, and the developing world is jumping ahead of us in the digital economy. I think we have major labour shortages, so we often tolerate substandard work. Our weather is pretty horrendous on our infrastructure – our roads crack, our sewer pipes break. Also, I think our employers are a little bit averse to training, and our corporate leaders have less education than comparable CEOs in the United States. There is significantly less R&D investment here than in the U.S., and large Canadian firms are much less likely to invest in machinery and equipment than in the States.
Is there perhaps inflexibility because of organized labour?
The federal labour code only covers 8.4 per cent of the total work force. About one-third of the federal jurisdiction is unionized, and two-thirds is not. And within the unionized sector, strikes are actually fairly rare.
But if we’re talking about employment standards, we’re a little bit rigid about what we expect a normal workweek and workday to look like: 40 hours per week, eight hours a day before overtime is paid. There is a growing call for giving workers more control and flexibility, and labour codes do restrict us. I can envision situations where people would trade a very heavy workload during some parts of the year for a lighter workload at other times. Or imagine a divorced couple sharing kids one week on, one week off. The ability to work a lot of hours when you don’t have your kids and fewer hours when you do would be phenomenal.
How does this inflexibility hurt us when it comes to competitiveness?
I’m not sure it does, really.
The competitive issue really has to do with productivity and our ability to grow ourselves and compete globally. A lot of people confuse productivity with work intensity. A lot of people say the unions prevent productivity. That’s simply not true.Productivity is an efficiency measure, and it’s up to management to determine how to become more efficient, by introducing better work practices, by bringing about better plants and equipment, by staying modern – and that’s not the fault of the work force. Productivity is about enterprises becoming smarter, not making employees work longer or harder.
What’s another example of a challenge presented by the labour code?
There is basically a hairball of entangled regulations and statutes, and there is a growing movement right now to harmonize codes – one of the really good things was the New West Partnership Trade Agreement, which co-ordinated hundreds of laws and regulations between British Columbia, Alberta and Saskatchewan, and I’m seeing increased interest in doing that to allow greater labour mobility and recognition of trades and so on. There’s also a lot of work to be done on plain language. The average employee doesn’t have a clue how to access their rights.