Labour relations in Canada

Disclaimer: The following may seem unfair, biased and/or plain wrong to some of you. Feel free to comment and let me know.

I am sure those of you who read the newspaper, watch the news on TV, listen to the radio, or generally interact with other people are well aware of the Air Canada and Canada Post strikes in recent weeks.

The issues seem to be largely framed as either money-grubbing unions putting a stop to productivity in Canada or money-grubbing corporations trying to step on the little guy. In my opinion both sides are oversimplifying a challenging issue and reinforcing entrenched views that bring the issues farther away from resolution rather than closer.

Public sympathies seem to varry according to who you talk to, but unless you are reliant on air travel or mail delivery for time-sensitive or work-related issues, it is likely that you may have only barely noticed the effect of the strike. I know for myself it mostly just means less junk mail and waiting a little longer to get the things I ordered on Ebay.

However, apart from the effects of the disruption there is a much larger, fundementally more challenging issue that I believe will increasingly be affecting employers and employees in almost all fields. The crux of both strikes seems to be mostly based on the issues of defined benefit pension plans, retirement ages, and two-tiered wage systems.

Let me not pretend that any of these issues are simple or have a single answer, but as a broad generalization most Canadian employers, both goverment and private, are moving from defined benefit (You contribute x now, you get y later) to defined contribution (you contribute x now, you get whatever x is worth later) systems, assuming they continue to have a pension system in place at all.

The labor reaction to this seems to be that employers are taking advantage of recent economic weakness to claw back the benefits that unions have fought so hard for over the years. The corporate reaction is that as people continue to live longer and the demographic trends advance to a point where there are less active workers than current retirees in a given company, the math simply does not add up anymore to continue promising these plans that cannot realistically be paid in perpetuaty.

For the most part, it seems to me that both sides have a point, however it is not possible for both to get what they want. The best compromise I can conceive of is to try to gradually implement the change in a transparant way so as to set expectations for those younger workers that they will need to carry more of the weight of their retirement while not pulling out the rug from under those older workers who have been promised one system most of their working lives only to be suddenly told that it is changing to another.

The unfortunate fact is that for most companies, the only real choice is to reform pensions now or face bankruptcy (or in the case of crown corporations, higher taxes) in the future. There is, in most cases, no magical pot of money that employers are sitting on that could be used to fund these increasing obligations. Even to maintain current benefits would often require increased productivity at a rate that is entirely unrealistic.

While I take no particular position on the government's role in legislating back-to-work bills, I do think that until both sides come to the table with these unfortunate realities in mind we will continue to see standoffs in increasly more sensitive industries. I sincerely hope that a dose of pragmatism can be taken by both parties.