'Forget AI and ChatGPT— it's a matter of making sure that we're thinking future-focused around labour': HR leader
With the unveiling of the proposed federal budget for 2023, Ottawa laid out a wish list of causes and investments for the year ahead.
Along with a pronounced focus on inflation relief, healthcare funding, the clean economy and a responsible fiscal plan, the 255-page document contained several elements that should be of interest to human resources.
These include further details about the Canada Dental Plan, greater protections for gig workers, leaves around pregnancy loss, changes to retirement arrangements, investments in work sharing programs and new rules for replacement workers.
Tackling inflation, immigration
With an unemployment rate of about five per cent, and a “squeezed” labour market, tackling inflation is definitely a positive, according to Van Zorbas, chief people and culture officer at Deloitte Canada, talking to Canadian HR Reporter.
“If you get inflation under control, then that puts less inflation, less cost pressures on employers around income, and allows us to do other things as we start to go forward.”
And if you think about the labour pool as a whole, immigration is a key piece, he says, along with reskilling the workforce.
“That is going to be a critical piece — forget AI and ChatGPT. It’s just the matter of making sure that we're thinking future-focused around labour and where does it need to come? We do have a shortage today, and we can feel it as a big employer… and I don't think that's going to change. So anything around reskilling [is good].”
With the growing popularity of artificial intelligence chatbot ChatGPT, nearly half of HR leaders are coming up with guidelines to regulate its use in the workplace.
More details on dental benefits
Having opened up applications for the Canada Dental Benefit in December – and helping more than 240,000 children so far – Ottawa says it hopes to provide dental coverage for uninsured Canadians with annual family income of less than $90,000, with no co-pays for those with family incomes under $70,000.
The legislation would compel employers and employer pension plans to report dental coverage offered to their employees and plan members through T4/T4A reporting. This would ensure that the new plan is limited to Canadians “with an unmet need for dental care who don’t have access to private insurance,” says Ottawa.
The new element there is that the plan is expanding to all ages, not just children, who match an income level cutoff, says Stephanie Kalinowski, a partner at Hicks Morley in Toronto.
Plus, it addresses the practical implementation of the plan, she says.
“How do you know if someone doesn't have coverage or not? They've announced that it will be through the T4 or T4a that employers and payers issue,”
But there are still some unknowns, says Kalinowski.
“Someone who has access to an extended health and dental plan may have the ability to select ‘single’ or ‘family’ coverage, or in flex plans, they might select ‘extended’ health but not dental, or dental and not extended health. So I think there remains to be some details worked out about exactly how that will work.”
The proposed budget talks about coverage that is “offered,” so it’s possible that’s how this will be applied, meaning if dental benefits are available, then that will be reported, she says, “and maybe if an employee doesn't access what's offered, perhaps they will not be eligible for the government program.”
But for Zorbas, health and dental benefits are becoming “less and less relevant” to employees these days.
“Our employee base is almost 80 per cent millennials and Gen Z — [benefits] is the last thing on their radar screen… So if the government takes more of it, great — I can actually then try and reinvent benefit plans and focus them on the flex that [employees] want, which is flex around mental health, wellness,” he says.
“We've got probably a burnout issue or epidemic that has happened across the country… How are we making sure that we're getting our employees healthy, safe in the new environment, the new way of working? I think that's a key piece.”
Pregnancy loss leave
One element of the federal budget that generated considerable attention was a new stand-alone leave for workers in federally regulated sectors who experience a pregnancy loss.
“This will support thousands of Canadians, including women and working parents, as they recover, both physically and emotionally, from a tragic moment in their life," says Ottawa.
But pregnancy loss is already built into pregnancy leave, certainly in Ontario and at the Canada Labour Code level as well, says Kalinowski, “so it seems like what they're doing is separating it out.”
Ottawa is also expanding the current leave so it applies not only to birth parents but those who are planning to have a child through adoption or surrogacy, she says.
Budget 2023 also proposes to improve eligibility for leave related to the death or disappearance of a child for workers in federally regulated sectors.
Galvanized about gig workers
Currently, 28 per cent or about 8.75 million Canadian adults are taking on a job in the gig economy — up from 13 per cent in 2022, according to a recent report.
Concerned that gig workers might miss out on the certain labour rights, protections, and entitlements, Budget 2023 proposes to amend the Canada Labour Code to improve job protections for federally regulated gig workers by strengthening prohibitions against employee misclassification.
This will ensure they receive the protections and employer contributions to which they are entitled, including Employment Insurance and the Canada Pension Plan.
But it’s a little hard to understand what exactly this is signalling, says Kalinowski.
“It's not like we don't already have settled law about who is an employee and who isn't,” she says, admitting that that line isn’t always “crystal clear.”
And gig workers are not always vulnerable people being taken advantage of, says Kalinowski.
“In some cases, they're highly educated, skilled people who may want that arrangement for a variety of different reasons. And in other cases… they may very well want the flexibility for that so-called gig work.”
There has been a suggestion that these workers would be paid for time in between gigs, but that could cause complications because most of these arrangements involve people who can decline work, she says, “so I'm not sure how that's going to be managed, if that's one of the directions they’re going, for example.”
Deloitte makes use of gig workers, and this push by government makes sense, according to Zorbas.
“We are going to have more and more employees that are self-employed as part of how they want to do things, so giving them protection and ensuring that they have rights, I think is a positive thing.”
However, with greater protections, it becomes less advantageous for employers to hire gig workers, he says.
“There's a trend that way, regardless. And so I think, as an organization, we have to get our culture around ‘How does it work?’ And then for us, for me, it would be ensuring the highest level of quality when we stamp our brand on it, a high level of quality.”
Cutting back on outsourcing, consulting
Ottawa also announced its intention to reduce spending on consulting, other professional services, and travel by roughly 15 per cent, for savings of $7.1 billion over five years, starting in 2023-24, and $1.7 billion ongoing.
When it comes to outsourcing, it’s about striking a balance, according to Zorbas. And that means asking key questions, such as: “Do you have the right procurement issues? Are you spending the money and judiciously thinking through what you need outside workers to do, consultants?... Why are you doing it? And what are the key components to it?
“And if you can do it yourself cheaper and faster, then why would you outsource it?”
While many businesses are reeling from the effects of the so-called “great resignation,” outsourcing might be a tool to stem this tide, said one expert.
Rejigging Retirement Compensation Arrangements
On the retirement front, the new budget proposes a couple of notable changes. One is a relieving tax measure that would benefit employers that sponsor certain types of Retirement Compensation Arrangements (RCAs).
Budget 2023 proposes to amend the Income Tax Act so that fees or premiums paid for the purposes of securing or renewing a letter of credit (or a surety bond) for an RCA that is supplemental to a registered pension plan will not be subject to the refundable tax.
The budget also proposes to allow employers to request a refund of previously remitted refundable taxes, and they would be eligible for a refund of 50 per cent of the retirement benefits paid, up to the amount of refundable tax previously paid.
It’s an exciting development, says Kalinowski.
“Eliminating the 50-per-cent refundable tax on the premiums for letters of credit that are used as a backstop for supplemental pension plans is quite an exciting development that the industry has been advocating for,” she says.
“This could make RCAs, and having some funding security for members, be a little bit easier to provide because it will be less impractical in some ways to run the letter of credit through the RCA now that this tax doesn't apply to it. So it could have the side benefit of providing more income security for employees whose retirement income would be partly funded through the supplemental plan that doesn't, of course, have the same funding requirements as a registered pension plan.”
Ottawa also confirmed its intention to move forward with legislation to implement a new scheme for fixing contribution errors in defined contribution pension plans, as well as changing the restrictions on borrowing in defined benefit plans.
“Those are both things that in the industry, and particularly the contribution areas, we're hoping to see finalized and in place sooner rather than later. So we're glad they are confirming that they intend to continue moving forward with that,” says Kalinowski.
Prohibitions around replacement workers
One element of the budget that is not-so-welcome news for employers is the government’s proposal to amend the Canada Labour Code to prohibit the use of replacement workers during a strike or lockout.
Ottawa also hopes to “improve the process to review activities that must be maintained to ensure the health and safety of the public during a work stoppage.”
The key word is “proposal” because the feds haven’t released the budget bill yet, so it’s not clear what this means, says Kalinowski, and they signaled that there might be some exceptions when it comes to public health and safety.
“That suggests that they intend to make it more difficult for employers to bring in replacement workers to simply replace the union jobs of the people who are on strike, but that there could be some exceptions to that. So we really have to wait and see.”
