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Globe Investor Canadian unions regain their power in Trudeau’s Ottawa

Prime Minister Justin Trudeau holds a press conference in Shima, Japan on Friday, May 27, 2016. Just days after taking office in November, Prime Minister Justin Trudeau attended a Canadian Labour Congress meeting and told attendees his government wanted to work with unions.

Sean Kilpatrick/THE CANADIAN PRESS

Canadian unions are flexing their muscle in Ottawa.

When the Liberal government reached a deal to reform the Canada Pension Plan, the country's labour movement scored a huge victory. It wasn't just because unions had spent nearly a decade lobbying Ottawa for bigger retirement cheques, the government's decision showed that organized labour had the power to sway policy in its favour.

After hostile relations with the previous Conservative government, unions are now being consulted on legislation.

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It is a significant shift that could influence future policy, including the fate of the Trans-Pacific Partnership trade deal between Canada, the U.S. and Pacific Rim countries.

"The climate has drastically changed," said Mark Hancock, the national president of the Canadian Union of Public Employees, the largest public sector union in Canada. "There used to be a real vacuum and we weren't part of any of the discussions," he said.

In the months leading up to the recent CPP deal, Finance Minister Bill Morneau met and spoke with labour leaders. He told them that expanding CPP was a priority and asked for their input.

"We have been working very closely and trying to listen to one another and trying to find compromise and balance," said Hassan Yussuff, president of the Canadian Labour Congress, the union federation representing 3.3 million Canadian workers.

Unions across the country are now enjoying a fruitful relationship with the Liberals. Mr. Yussuff said that whenever he picks up the phone to call a minister, deputy minister or their staff, his calls are returned – unlike during the previous Conservative administration. Mr. Yussuff can easily get meetings with top officials and has not only had extensive discussions with Mr. Morneau, he has spoken with the ministers responsible for trade, labour, industry and transport.

It is the same for other union chiefs. "I have spoken with more ministers in the last six months than the previous 10 years," said Jerry Dias, president of Unifor, Canada's largest private sector union representing workers in manufacturing and gambling among other industries. "I speak to ministers pretty much every week. I speak to [Trade Minister] Chrystia Freeland almost weekly. The access that our organization has is unprecedented," Mr. Dias said.

Just days after taking office in November, Prime Minister Justin Trudeau attended a Canadian Labour Congress meeting and told attendees his government wanted to work with unions. "The Prime Minister made a point of saying he asked his cabinet to 'always consult labour,'" recalled one attendee.

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In contrast, Ottawa did not consult the top business lobbyist on CPP. The Canadian Chamber of Commerce sent Mr. Morneau two letters, saying that the higher CPP contributions should be voluntary and that they were equivalent to another payroll tax on employers. Perrin Beatty, the chamber's president, said "we were able to make sure the government was aware of our views by taking the initiative to write to them, although there was no formal consultation process. It is always better when governments actively reach out to stakeholders."

However, the chamber said they were invited to consult on other topics, such as the Trans-Pacific Partnership (TPP) – a trade agreement businesses largely favour. As part of the Liberals' effort to be transparent, the government is seeking advice from stakeholders on a range of issues. On the TPP alone, Ottawa has held more than 250 consultations. Ms. Freeland has held more than 80 consultations and there are many more meetings to come.

The unions are vehemently opposed to the TPP, saying it would undermine Canada's jobs market and lead to the loss of good jobs.

"At some point we will see if they are truly listening," Mr. Yussuff said. "Do they listen and change direction or do they listen and say thank you very much?" he said.

Canada does not have to reach a resolution on the TPP until February, 2018, the deadline for Canada and the 11 other countries to ratify the agreement. The Liberals won't even have to show their hand if the U.S. rejects the proposal. The current Obama administration may not have the political capital to approve the TPP before the U.S. presidential election in November. And both presumptive presidential nominees, Republican Donald Trump and Democrat Hillary Clinton, have said they oppose it.

It remains to be seen whether organized labour will succeed in quashing the TPP, but its budding relationship with Ottawa has given unions some hope. Unions mobilized their members to vote against former Conservative prime minister Stephen Harper, an effort that helped the Liberals win a majority government. "When we get our act together, we can make things happen. Governments are taking notice of that," said Sharleen Stewart, the president of Service Employees International Union in Canada.

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The prize for their support? "The Liberals are more aligned with labour then we have seen in the past," said Paul Meinema, the national president of the United Food and Commercial Workers Canada union, which represents workers in meat plants and grocers.

In addition to the CPP proposal, Ottawa has rolled back policies enacted under the Conservatives that organized labour deemed "anti-union" and "anti-worker." That includes reversing a law that made it harder for workers to organize, and another that required unions to disclose detailed financial information. The Liberals also reversed the eligibility for Old Age Security pension to 65 years old from 67, which labour lobbied for.

The breakthrough with the federal government comes as unions grapple with the power they lost over three decades. The proportion of unionized workers in the private sector has dropped to 17 per cent last year from 21 per cent in 1997, according to Statistics Canada data.

The biggest losses have been in the manufacturing sector, where the unionization rates have dropped to 26 per cent last year, down 10 percentage points from its peak in the 1990s, according to Statscan. More than 400,000 factory positions vanished during the financial crisis, eliminating scores of union positions and weakening the labour movement.

Organized labour is now trying to expand into new areas – for example, covering Uber drivers. But the country's labour laws were enacted before the rise of the so-called "gig economy." What to do with those outdated laws?

"If you're strong enough, you change the law," said Buzz Hargrove, former president of the now defunct Canadian Auto Workers union. "That is what we are doing right now with Justin Trudeau and the new government. They are changing the law," he said.

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