A Short History of the Canadian Labour Market

‘Union Yes.’

Some of you may remember this unabashed slogan from a few decades ago. It was part of a marketing campaign launched by the AFL-CIO (American Federation of Labour - Congress of Industrial Organizations) to promote unionization. 

Here in Canada, most mainstream unions belong to the Canadian Labour Congress (CLC), which collaborates with the AFL-CIO. Union density in our country hovers around the 30% mark, with emphasis on public sector (government) unions.  

The ‘Union Yes’ campaign was and is presumptive, as it purported to speak on behalf of all unions. 

The reality is that, in the modern context, the union movement is not monolithic - far from it. In fact, benefits of worker representation now exist across a broad spectrum of labour models. These range from traditional mainstream unions, a rising tide of progressive unions and even the non-union sector. 

Employees now have a cafeteria of choices for benefit provision and worker representation. Employers working with project owners now have a variety of labour model options that can be matched to suit the needs of a project. 

A significant continuing challenge for policy makers is that many of the provincial labour, apprenticeship and public procurement laws were launched many decades ago, when the labour market was far less diverse. These laws often were - and are still - based on a more uniform labour market context that no longer exists today. Industry continues to live with this outdated legislation to this day – bound by laws that fit present reality like a square peg in a round hole. 

For construction contractors and their employees, such antiquated legislation poses sober challenges in accessing fair work opportunities, worker choice, innovation in work design, open competition and investor-worthy labour arrangements. 

Labour Laws - The Adversarial Principle

The Wagner Act of 1935 (the National Labour Relations Act) enshrined in American law a presumption that labour relations is fundamentally adversarial in nature. Canadian labour legislation, drawn in part from the Wagner Act, followed, including the Wartime Measures Act of 1944 and beyond. These laws differed notably from US approaches to labour organization, but matched America’s legal concept that labour relations is expressly adversarial in nature. By way of example, in 1957, the Canadian Supreme Court stated that "the collective agreement tells the Employer on what terms he must in the future conduct his master and servant relations."

An examination of Canada's construction sector exemplifies these tensions and challenges. 

The Craft Union Model

Canada’s Building Trades Unions (CBTU) are affiliated with their parent organizations in the USA (incidentally, millions of dollars generated by employer contributions on Canadian projects are collected by these unions and remitted to their American headquarters). The CBTU have a decades long and often chequered history of representing skilled tradespeople across the country. 

In this labour model, workers are organized according to their trade or "craft." This results in well over a dozen separate trade unions representing workers, which, for an employer means a highly balkanized labour management process. Each union prescribes guardrails around its trades' scope of work, resulting in frequent jurisdictional disputes where trade lines are blurred. 

Furthermore, the CBTU, as with most mainstream labour organisations, adopt a time-worn union trope of "us versus them." Management and union are categorically at odds, with a fundamental presumption that labour relations is adversarial in nature. 

The CBTU website claims that its member unions represent 600,000 workers. This number lends these unions a level of credibility with political parties eager to win back the blue-collar worker. It is worthy of note, however, that with approximately 1.3 million skilled tradespeople in Canada's construction sector (BuildForce Canada), and construction union density at approximately 31% (Statistics Canada), this CBTU math does not quite add up. 

Until recently, many provincial Canadian construction labour and apprenticeship laws presupposed that “union” means craft union.” Bargaining units were to be formed on the basis of separate trade scopes and their related craft unions. 

Apprenticeship education and training systems assumed that trades are effectively silos: one trade, one union, one career. 

The craft union model was presumptively placed as the default for legislative design, with the result that many laws and regulations do not match the existing plurality of worker representation models, including all-employee bargaining units.

The Rise of Progressive Industrial Unions

Since the 1990’s, the construction industry has witnessed a transformation in its labour sector. The building trade unions have now been joined in the labour market by a host of unaffiliated, “industrial” unions. 

Industrial unions in construction (such as CLAC) organize all of an employer’s workers into a single bargaining unit (this “wall-to-wall” arrangement,as an aside, is the common preference with labour boards across the country. The construction craft union model is an exception to the norm.

In contrast to the archaic adversarial model maintained by unions within the CBTU, we now see frequently on offer, as exemplified by the CLAC union,  a more open-handed approach to union management relations.

Instead of an adversarial philosophy, the modern approach is one of cooperation and partnership. It is clear that a dialogue-based, problem-solving approach based on interests is one much preferred and demonstrably successful compared to an aging labour model based on jurisdictional guardrails, rigid positions and conflict. 

The impact of modern industrial unions in Canada’s construction sector has been profound. Contractors are now able to work collaboratively with their "progressive" union partner to improve on work design and employee relations. Jurisdictional disputes between trades are non-existent and union-management cooperation heads-off chronic grievances and arbitrations. Workers earn robust wagesand benefits - provisions which better align with market conditions and trends. 

In fact, instead of confining a worker to one trade, this progressive labour model affords opportunities for trades blending (multi-skilling and dual ticketing). These innovations are crucial to contributing solutions to Canada’s chronic worker shortage and productivity lag. 

The non-union sector, formerly regarded as devoid of worker rights and benefits, has learned from the progressive labour model. Strong benefit plans are provided, robust training is given and construction managers have learned that an engaged worker population is more content, safe and productive. 

Policy Issues 

As noted above, labour, apprenticeship and procurement laws have lagged behind in being modernized. 

Regrettable examples abound:

• Restrictive project labour agreements (PLAs) and so-called community benefit agreements (CBAs) have been put in place across the country (Ottawa Civic Hospital, BC CBA for major projects, Manitoba Jobs Agreement). The common thread between these schemes is government as the patron of a select group of craft unions who are granted exclusive access to billions of dollars of public construction work 
• The "construction employer" provision of the Ontario Labour Relations Act compels the City of Toronto to limit access to public construction projects to the craft unions 
• The federal Investment Tax Credit (ITC) for clean energy projects requires, for full tax credits, that all workers be paid “prevailing wages and benefits.” This requirement is insensibly based on remuneration amounts set by a select group of building trade unions, thus ignoring market trends and extant collective agreement provisions with industrial unions
• In B.C. and Saskatchewan, collective agreements are subjected to an irrational 2 month “open period” every year in which predatory union raiding can occur. This annual threat and disruption to the stability of the existing collective bargaining relationship is unproductive and illogical
• Many provincial apprenticeships systems are trapped in a mindset that incoming apprentices are educated and trained in a single trade only (often heavily influenced by craft unions), rather than facilitating multi-trade ticketing 

Policy Solutions 

In order to address the above issues, governments and industry should work together to ensure that:

• All publicly funded projects are not constrained by a restrictive labour pact 
• Tax credits and incentives for major projects allow for open and competitive bids to cover the costs of labour 
• Labour laws are amended to move annual open periods to occur every 2 or 3 years 
• Bargaining units in construction recognize both craft unit and all-employee unit applications and disallow carve-outs of a single trade from a consolidated unit 
• Apprenticeship systems promote multi skilling, micro credentialing and dual ticketing.
• Public trades training is not be dominated by craft unions 
• Governments allow for and financially support the development of vocational and collegiate high schools which enable dual academic and trades education 

Much progress has been made in Canada’s construction sector to expand worker choice across the labour spectrum. Labour laws have slowly modernized to provide for competition between distinct unions and labour models. Apprenticeship systems are realizing the need to innovate. Policy makers are coming to understand the nature and function of the diverse labour market and the need to reform legislation accordingly. Project owners have benefited from the competition brought to the table by contractors signatory to a variety of labour partners. 

However, there is much more work to do. Many laws remain untouched or unimproved. Regulatory capture and oligarchies are a common and rising theme, in which stakeholders supported by governments secure monopolies on workers and worker wage and benefit provisions. 

Canada’s labour history tells a compelling story. Our skilled trades workers have built incredible public and private infrastructure for the benefit of our communities. Yet, it is also a tale of stagnation, incremental improvement and political entanglement. Our construction sector needs and deserves modernization so that contractors can compete fairly, workers can choose representation freely and investors can see the value in helping to build our nation.