Labour laws, ranked

Resident scholar in economic policy at the Fraser Institute Charles Lammam sat down with Canadian Labour Reporter to discuss the public think tank's recent report on labour laws.

How has the current state of labour relations affected job growth and investment?

The report looks into whether Canada’s federal and provincial labour relations laws in the private sector are balanced. Balanced in regards to three main groups — unions, unionized workers and employers. We found that in Canada, generally across the country, the laws tilt in favour of unions. This matters because there is research that finds that when such laws are tilted in favour of one group there can be economic implications in the form of lower levels of investment, less job creation and generally weaker economic performance in jurisdictions that have these biased labour laws.

The study uses an index to rank labour laws in Canada and the United States from one to 10. What factors were taken into account?

The index is based on academic research. We have 11 separate indicators grouped into three broad components: the organization of a union, union security and the general regulations on unionized firms. Within the index, we grouped the right-to-work states and the non-right-to-work states because there’s a fundamental difference with regards to jurisdictional responsibility on labour relations laws. In Canada, there is more variation between provinces and they are afforded the ability to change their respective labour relations laws. In the United States, however, it’s more of a centralized regulatory framework. There’s not a whole lot of room for the individual states to deviate from the federal law but they can enact right-to-work legislation.

What are the common misconceptions surrounding labour relations laws?

Workers here in Canada, right across the board, have less choice. All Canadian jurisdictions have a basic shortcoming with regards to labour laws and that’s with respect to giving workers a choice when it comes to unions. For example, if you are someone who is thinking about taking up a particular job, you are required — if that workspace is unionized — to become a member of the union. You have no choice. And moreover, you are required to pay full union dues. What can happen is that the union dues the workers pay can go to activities that are unrelated to representation.

Ideally, what purpose should labour relations laws serve?

They’re the rules of the game. And in my strong view, the rules of the game should be level. We should be working towards getting a set of labour relations laws that are neutral, that are balanced, and that don’t give undue advantages to one group or another. Ultimately, the payoff comes in the form of higher economic performance.

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