A really big slice of our province’s wealth or GDP (a bigger slice than any other province, even resource-rich Saskatchewan and Alberta) is soaked up in corporate profits.
In fact, the share of our wealth going to corporate profits is two and a half times the national average and before the recession was almost 40 per cent of our total GDP. No doubt about it, Newfoundland and Labrador is not a bad place to do business.
Despite this, workers must still fight, and fight hard, for a sliver of the economic pie. And in that struggle, they are often ridiculed by those who still think “we should be lucky to have a job.”
The rules that help get this pie shared are often ineffective and need modernizing in order to fit with the new economic reality — a reality that includes rapid growth of corporate power through globalization.
Some of those rules or policy measures include taxation, benefit agreements and royalties — all of which have been used by the provincial government to get a better share of the economic benefits from resource developments for the people of our province.
But when so much of our GDP is eaten up in corporate profits, we should ask ourselves if we are getting a big enough return on our resources.
Obviously trickle-down economics has not worked and will never work if our goals are a fair sharing of the wealth we all create. As economist John Kenneth Galbraith once quipped: “if you feed the horse enough oats, some will pass through to the road for the sparrows.”
Collective bargaining has been another important way to ensure there is a fairer sharing of our wealth.
But the job of collective bargaining with big corporations, especially multinationals, is getting to be tougher and tougher all the time. That’s because there is often very little economic incentive for these diversified and truly global corporations to reach deals with workers.
The protracted strike against Vale at Voisey’s Bay, Labrador is but one example.
The growing concentration of foreign-owned multinationals in Canada means the challenges posed by globalization and multinationals and their impact on things like labour relations are only going to intensify. Some 54 per cent of Canada’s largest corporations are now foreign-owned. This sell-off of corporate Canada is indeed having an impact at the bargaining table.
This issue was boldly addressed by the industrial inquiry into the Voisey’s Bay strike — a painful lesson for all of us in how global corporations can use their diversity, their geographic reach and their power to undermine the wages and conditions of workers in any particular country. Indeed, they can, and do, undermine long-understood labour relations values and principles.
This was one of the findings of the inquiry headed up by St. John’s lawyer John Roil who was joined by labour/employment lawyers from both the union and employer communities — Randall Earle and Brian Gatien.
The report notes that globalization presents challenges for a regulatory system developed for a time when the economy and the players in our economy were a lot different than they are today.
It notes that this changing dynamic at the collective bargaining table — basically a growing imbalance in power — will require “innovative thought and new policy direction and/or legislation from government. Now is the time to begin the discussion.”
Multinationals, based in other countries, may have a different approach to labour relations that is “at odds with Canadian labour relations values,” the inquiry found. “An organization that sees the role of collective bargaining in a manner that is inconsistent with Canadian labour relations values is likely to have difficulty reaching agreement with a union which has come to expect that employers will buy into such approaches.”
And perhaps the bigger question raised by the report: “if there is no effective economic or social pressure that can be brought upon a multinational corporation, what then is the incentive to negotiate? Facilitating collective bargaining in that context requires tools not currently in the labour relations toolbox.”
It was this analysis and followup recommendation which was perhaps the most groundbreaking in this report, as it called on government to re-examine the mechanisms by which it facilitates collective bargaining in order to take into account the organizational structure of multinationals, the need to ensure such multinationals respond to Canadian labour relations values and the relative economic weight of the parties in the collective bargaining relationship.
The report’s other five recommendations are also important to how we update or modernize our labour laws and labour relations structures and services in this province, including a recommendation for settling lengthy disputes where collective bargaining has totally failed and a strike or lockout has been rendered ineffective.
To be clear, the labour movement did not get its main demands from this inquiry. Not by a long shot. There was no recommendation to ban the use of scab labour, although the inquiry did say scab labour can undermine the ability of employees and their unions to engage in meaningful collective bargaining.
What we did get was a bold examination of labour relations and the impact of globalization on those relationships; an affirmation of our labour relations values; and why it’s important for governments to support ways to achieve a positive labour relations climate.
Much to do
If the goal of the provincial government is to work to improve that climate in our province, it will implement the recommendations of Roil, Earle and Gatien.
There is, as the report notes, much more discussion to be had and more change will likely be needed.
And you can be guaranteed
that provincial jurisdictions across Canada dealing with multinationals will be giving this report careful examination.
For if governments are truly interested in sharing our wealth, they must also ensure unions can do what they do best: bargain a fair return of that wealth for workers and their communities.
Lana Payne is president of the Newfoundland and Labrador Federation of Labour. She can be reached by email at email@example.com. Her column returns June 18.