Transport Committee on May 7th, 2013

[The Chair, Conservative, Larry Miller]

I will call our meeting to order.

We have with us today Mr. Mortimer.

For the benefit of the members, we tried to get a couple of other witnesses today but were unable to do so.

Mr. Mortimer, we very much appreciate your coming here. With no further ado, we'll turn it over to you for 10 minutes or so. I'll be lenient.

[John Mortimer, President, Canadian LabourWatch Association]

Okay. I think it will be less than that, but we'll see.

Thank you, Mr. Chair and committee, for the opportunity to participate in this important study.

The Canadian LabourWatch Association was founded in the year 2000. Our mandate is to help working Canadians who may not want to become or remain unionized.

We'll address the committee's topic from two vantage points. First, closed tendering is inherently discriminatory and should be brought to an end. Second, taxpayers are not getting the best value for their federal tax dollars that fund any federal, provincial, or municipal construction work on which union-free workers, and in some cases unionized workers from certain unions, have been barred by law from working.

It is hard to believe that in a country like Canada in the year 2013, open tendering is not a reality for all of Canada's construction workers, particularly the significant majority of them who are not unionized.

Conservative Prime Minister Diefenbaker's bill of rights was followed by Prime Minister Trudeau's charter. Over the decades, human rights codes have spread across this country. Legislation, such as labour codes, regulating unionization has codified the right to join a union.

The Canada Labour Code and, from a government unionized worker point of view, the Public Service Labour Relations Act have very similar provisions regulating employer conduct when hiring employees. It is simply illegal for an employer to refuse to employ a person because he or she is a union member.

For example, subparagraph 94(3)(a)(i) states in part:

(3) No employer or person acting on behalf of an employer shall (a) refuse to employ or to continue to employ or suspend, transfer, lay off or otherwise discriminate against any person with respect to employment...or any other term or condition of employment...because the person (i) is...a member...of a trade union....

Tendering schemes, funded by all taxpayers, whether unionized or union-free, have the exact opposite outcome. Workers who are union-free are discriminated against in a way workers who are unionized or are union members are not, in the other direction. It is even more shocking that union-free working Canadians who are also taxpayers cannot work on projects they fund as taxpayers simply because they're not unionized.

Canada is now the only nation left on earth that allows forced union membership and forced union dues for non-bargaining purposes, such as politics, social causes, including causes outside of the borders of this country, to be a condition of employment. In Canada, employers and unions can agree to require unionized employees to become and remain members of the union as a condition of employment. Any nation that ever allowed such coercive practices has outlawed them. Many nations never ever allowed them to exist.

Closed tendering, however it is arrived at, is simply a branch of this discriminatory bias in favour of union leaders who have more money and more power. Taxpayers and working Canadians, discriminated against in such a scenario, are the losers. It is intellectually dishonest to say that we believe in rights and freedoms, and that we oppose coercion, bullying, and discrimination, only to turn around and say that a certain class of Canadian need not apply for work.

Canadian human rights cover a range of grounds, from those that come to us by birth—the colour of our skin or our national origin—to those that, arguably, are a choice, such as marital status or religion. Closed tendering is the equivalent of saying, “Sorry, because you're not single, or because you're not married, or you're not a member of any religion or you're not a member of a certain religion, you cannot work at certain job sites.”

The solution is very simple. Require that federal tax dollars funding construction work be open to any employer regardless of the unionization status of its employees.

I will now turn to the second area I wish to focus on, value for dollars.

As far as I know, 2003 is the last time the Canadian Labour Congress made its research on attitudes to unionization public. While they claim some pockets of what they saw as positive news and attitudes of unionized employees toward union leaders, they wrote as follows: However, private sector union members have registered a significant drop in satisfaction with both national and local leadership. For national leadership, “satisfied” responses have dropped from 73% in 1993 to only 61% today. Views on local leadership among private sector workers have shown an even sharper drop—from 76% a decade ago to 61% today.

Let me reinforce that this is the research of the union-funded Canadian Labour Congress.

Over the years, several labour board chairs across Canada have advised me that the number-one filing before their labour board, year after year after year, is a complaint by unionized Canadians against their union leaders. Because unions, employers, and labour boards find these complaints difficult to deal with, what we have as an outcome is the three most powerful players lined up against the unionized employee and 95% to 99% of unionized employee complaints summarily dismissed by Canada's labour boards.

Hewitt Associates did a presentation at a major human resources conference in 2004 that assessed survey responses from 120,000 employees in Canada. Hewitt analyzed the data based on who was and was not unionized. They split their data into three groups: highly engaged, somewhat engaged, and non-engaged. The highly engaged group dropped from 66% engagement for the union-free to 55% if unionized. Equally telling, non-engaged scores were 13% among unionized respondents but only 6% among union-free, so there was a much smaller quotient of people who were not at all engaged in their work, according to this research of 120,000 Canadian employees.

In 2010, Gallup looked at engagement and productivity in the United States. As with Hewitt's work in Canada, unionized engagement scores were lower. In this U.S. research, they found that the engagement scores were 7 points lower and productivity levels among unionized Americans were 6% lower.

I'm now going to touch on two anecdotal items from my 30 years in the world of human resources and dealing with unions. At conferences attended by union stewards, I have heard, on numerous occasions, a lament that they are tired of protecting poor performers who simply should have been let go. This is also one of the public's perceptions of union leaders, that they protect people who should be let go from their jobs on a performance basis.

The close family relative of this reality is the legion stories from the unionized workplaces where energetic, high-performing new hires are pressured by the longer-serving old guard to slow down. I have lost count of how many times I have heard or read such observations.

Finally, in the world of construction unions in particular, there is a dysfunctional division of work that is anti-productive. It's the “It's not my job” refrain. Building trades leaders are zealous in protecting and fighting over their turf generally, and on job sites specifically. The rigid work demarcations live on from another era that needs to be put behind us. Unions collect money and funds that are used to subsidize unionized employers whose bids are higher, in part because of these lower productivity levels, lower engagement levels, and lower excellence levels.

These MERFs or STABs, as these funds are known in the industry, exist across this country. Their existence and growth, in many cases funded by the taxpayer, are further proof that taxpayers are on the losing end of these schemes. From my review of the last proceedings of this committee, the inflated price of infrastructure in Canada as a result of these policies arising from publicly available documents has already been discussed.

The City of Hamilton staff report estimates increased costs would be in the hundreds of millions of dollars. The City of Montreal report noted that costs on overall infrastructure were 30% to 40% more expensive, and on sewer and aqueduct projects 85% more expensive.

All Canadians, including unionized Canadians, deserve better than the status quo.

Thank you.

[The Chair, Conservative, Larry Miller]

Thank you very much, Mr. Mortimer.

We'll now move to questioning.

Ms. Chow, go ahead for seven minutes.

[Olivia Chow, NDP, Trinity—Spadina, ON]

What kind of infrastructure projects are you most in favour of?

We've heard from small municipalities talking about waste water. They're in a desperate situation. They were told by the federal government that there are some environmental standards that they have to meet. As a result they have to upgrade their sewage treatment programs. In this budget there was no special pocket for them and they're worried that their funding will get crowded out by big cities, whereas the big cities are saying their bridges are crumbling and that they need a lot of funding and public transit. Then, of course, there is the social infrastructure.

So what kind of infrastructure projects are you most concerned with? I see that your organization represents, among others, those in the food and service sector. The restaurant association doesn't apply for infrastructure funding. The Canadian Federation of Independent Business also doesn't necessarily apply for infrastructure funding. The group that would be mostly connected with infrastructure funding, which is what we're talking about, is the independent contractors. I'm not as familiar with them. Do they do more of the transit infrastructure projects or are they more involved in the waste water projects, or is it paving roads or fixing bridges? What kind of projects are the organizations you represent most concerned about?

I was trying to find it in here and I couldn't quite see it.

[John Mortimer]

We'd be concerned about any infrastructure project where, by whatever means, be it a legislated bar against tenders from a union-free employer.... So they can only be a unionized contractor and their unionized employees can bid. Those are the ones we would be concerned about.

Whether it's a fair wage scheme that does it or other policies at the municipal, provincial, or federal level, we simply believe that all of these projects should be open to all taxpayers and all workers. And just because someone is union-free, they should not have a legal system that—

[Olivia Chow, NDP, Trinity—Spadina, ON]

I understand that; I heard that.

But I was trying to get to which projects, what kind of projects are you most interested in? You're talking about all infrastructure programs, not necessarily just the ones that deal with your members, because the members that you represent are mostly in construction as far as I can see.

[John Mortimer]

I would say it's any project, whether it's a government office tower or the refurbishing of a bridge—or it's the highway to Whistler before the Olympics.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Does it matter whether a certain city, municipality, or community chooses to bring a company that ends up hiring a lot of temporary foreign workers, because their wages are lower, and as a result they can probably bid it lower?

[Denis Coderre, Liberal, Bourassa, QC]

On a point of order, we discussed temporary workers last week, and it has nothing to do with infrastructure. I'm asking about relevance.

[Olivia Chow, NDP, Trinity—Spadina, ON]

I'm talking about wages.

[Denis Coderre, Liberal, Bourassa, QC]

There's a limit. We're supposed to talk about infrastructure. I'm okay if we talk about the union or non-union stuff, about the tendering, but I think we're expanding a bit too much now.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Allow me to explain why, because—

[Denis Coderre, Liberal, Bourassa, QC]

You're not the Chair. It's a point of order.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Okay. I'm talking about wages.

[The Chair, Conservative, Larry Miller]

The point is taken and we do need to stick to the topic. But as Ms. Chow says that she has a point in this, I'm going to listen.

[Olivia Chow, NDP, Trinity—Spadina, ON]

The study is called “How Competition Can Make Infrastructure Dollars Go Further”. Right? Competition. If we want true competition, wouldn't we would bring in people who don't ask for as much in terms of salaries? I say that because, by and large, union workers tend to have higher salaries. I'm generalizing, but the non-union shops have lower salaries. So I was trying to get to the core of this, which is competition. Then if we have lower salaries, where's the lowest salary? It will be for temporary foreign workers. That will really stretch the dollar and be very competitive and we would, therefore, make the infrastructure dollars go further. Right? That's what I was trying to get at.

[The Chair, Conservative, Larry Miller]

I'm going to call a point of order myself, just on the statement you made about union wages being higher in private sector. In my part of the world, most of the private sector keeps their wages in tune with those of the unions. I'm not going to speak for any other area of Canada, but I know it's that way in mine.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Maybe I could ask Mr. Mortimer. Is the salary range between a unionized shop and a non-unionized shop usually comparable? That's a good point. Is that the case?

[John Mortimer]

I'm familiar with union-free contractors who pay more than their unionized competitors in terms of what they need to do to recruit and retain their people. I'm familiar with ones who pay the same or who pay less. It's a total job experience.

I've been doing human resources for 30 years. One of the great misnomers is that money is a fundamentally important determiner of whether someone's satisfied in their job, motivated in their job, or whether they decide to join a certain organization or stay there. A lot of people in management, a lot of people with higher incomes, are more money-focused in my experience than people who we think should be more money-focused.

Let's take people who are at minimum wage levels.

[Olivia Chow, NDP, Trinity—Spadina, ON]

On average, though, are there any studies that show across Canada, if we looked at the companies with unionized wages and companies without unions, that the wage level is comparable? Of course, there are some that pay higher and lower, but on average are they about the same?

[John Mortimer]

No, the overall data suggests that because of the higher wages that have evolved for public sector Canadians—and there are now more unionized government workers in Canada than unionized private sector workers—those higher wages and richer benefit plans are inflating and creating what unions want to call their “wage advantage”. But I'm not personally familiar with a study that successfully pulls the private sector reality apart from the government sector reality.

[Olivia Chow, NDP, Trinity—Spadina, ON]

But we're not talking about public—

[John Mortimer]

I could tell you, for example, that the starting wages at Walmart are higher than the starting wages at Loblaws, which is unionized.

[Olivia Chow, NDP, Trinity—Spadina, ON]

I'm not talking about the public sector, Mr. Mortimer. We're not talking about the public sector; we're talking about the infrastructure program. We're not talking about an employee of this government or that government. We're not talking about public sector workers. I'm talking about those construction workers who deal with infrastructure funding—whether it's public transit or construction workers.

In general, on average, putting aside the office workers and putting aside the government officials, I'm talking about the companies that have unions versus companies that don't, both in this case being private companies. Are the wages fairly comparable on average or not?

[John Mortimer]

The answer I gave you is that the only data I've seen brings the government sector and the private sector together. I haven't seen a study that breaks the private sector out in the way you're asking. When the public is generally made aware by union leaders that they secure higher wages, I believe the skew in that data is a result of the public sector compensation levels in this country.

I was just on a job site in Saskatoon, where the employer was having difficulty finding enough people. I had just been with some people who had been dealing with a union hall in Toronto, where 50% of the people on the union hiring hall list were out of work.

In this country, from a taxpayer outrage point of view, you get extra ability to earn EI because you can be on the union's hiring hall list. So we have hiring hall people all over this nation earning EI, while we have jobs wanting in Saskatchewan and Alberta, the have provinces that are funding the have-not provinces like Ontario and Quebec. This is a problem in the EI system that is screwing up the labour market, in the same way we are screwing up by not making sure that there is full competition by, from my point of view, having more engaged, more satisfied, more driven union-free workers, but who are barred from doing unionized work.