The Impact of Quebec’s Stronger Labour Code

In my new role as in-house counsel for a business with operations across Canada (and as a Quebecker), I’ve been doing a lot of explaining about la belle Province. My American colleagues are used to dealing with a Federal version of our provincial labour codes that applies (generally) in a uniform manner across all of the United States. In Canada, as we know, labour relations are provincially regulated and accordingly, differ from one province to another (save for federally regulated employees). However, the laws of Quebec are different from other provinces and allow for easier access to unionization and stronger protections for striking workers. The differences have been discussed in a previous post.

What is the impact of these differences? Is it time for this model to change? Do Quebec’s stricter labour laws serve as disincentive for employers to open and operate businesses in Quebec? In researching the subject, I came across this article written in 2005 by the Montreal Economic Institute (MEI). While it’s a little dated, the laws are the same. The article concludes as follows:

The available data show that a strong union presence is not necessarily an asset for workers as a whole nor for the economy in general since it is accompanied by lower levels of employment and investment. […]

It is not unionization as such – nor the right of association – that causes these effects, but rather union privileges and the resulting constraints. To the extent that unions have privileges and use them either to set wages higher than would be the case without them, or to impose constraints that threaten the profitability and viability of businesses, they diminish employment and general prosperity.

What are your thoughts? Does Quebec’s stronger Labour Code promote unions and unionization at the expense of employers (and employment)? Should Quebec be a model for the rest of Canada or vice versa?

Comments

  1. Two questions come to mind:

    How are readers supposed to understand the meaning of the word privilege in the quote from the Montreal Economic Institute?

    Are we to assume that collective bargaining is a privilege?

    Secondly, is general prosperity singularly dependent of lowering union wages?

    Common sense and the historical record would argue that lowering wages has never produced greater prosperity, certainly not for wage earners.

    With less money to pay for an increasing cost of living, that is a recipe for poverty, not prosperity.

  2. As with any study, one would like to know a bit more about the publisher. Is the Montreal Economic Institute a collaboration of employers, or otherwise likely to favour employers’ interests? Labour relations laws are a balance between union rights and employer rights. One can debate the balance, and the impact of the balance on investment when alternative sites for investment have a different balance (and capital is more mobile than labour). Using the language of ‘privileges’ is not helpful.

    The decision to invest somewhere is complex. No doubt the rights of an investor’s potential employees is one factor; the skills of those employees is another, the tax regime another, the social amenities available to management another, access to markets another … etc etc. It is hard to say that any particular factor is determinative.

    These days the competition is often not other Canadian jurisdictions but US or Mexican or Chinese jurisdictions where the balance is set entirely in favour of employers. Not everyone wants to compete on those terms with those jurisdictions – and one of the concerns about globalization of the economy is the increasing pressure to do so. It can be hard to sort out the valid arguments from the specious, here as elsewhere.

  3. Modern corporations, who generally practice “vulture capitalism” are all for the “competitive free market” only when it refers to their ability to force workers in economically developed countries to compete for jobs with the wages earned in the lowest wage third world, no labour laws, country they can possibly. Vulture Capitalism is the extremely ugly cousin to responsible capitalism.
    Vulture Capitalism uses the ability of money to migrate across the world in an instant; while workers have extreme difficulty to similarly organize in their own countries, never mind across the world; to hold governments and whole populations hostage to their greed.
    Corporations only consider one value before decision or action – dollars.
    Morality has three positions. Moral – one knows what it is and does it; immoral – one knows what it is and doesn’t do it; and amoral – one never considers morality in the first place, or any other place for that matter.
    Morality is constructed from human and social values – none of which are either measurable or describable in terms of dollars. There can be no better example of amorality than corporations.
    If we are to have societies which not only cater to the top 10% wealthiest but also serve the legitimate needs of the whole society, not just the masters of the universe and their corporate puppets.
    This means, among other things, not a diminishing of labour laws but strengthening universal labour laws so that ALL workers are protected from amoral economic exploitation as if they were simply an asset or a natural resource.
    The labour laws, like those in Quebec, need to be strengthened and expanded across Canada and copied throughout the world so that we can have economies which serve the interests of the whole population not just the tiny fraction at the economic summit.