JOHN DALY May 28 1990


JOHN DALY May 28 1990



The signs of rising anger and militancy among the 2,600 delegates who gathered in Montreal for the Canadian Labor Congress’s annual convention last week were clear. Frustrated by union-negotiated wage increases that have failed to keep pace with the inflation rate since the 1981-1982 recession, many rank-and-file members lashed out not only at their traditional foes—their employers and the federal government—but also against the leaders of the CLC itself. Dissidents who called CLC president Shirley Carr an ineffectual opponent of Ottawa’s economic policies mounted a surprisingly strong challenge to her successful bid for a third term in office, with 30 per cent of the delegates voting instead for radical Edmontonbased Canadian Union of Public Employees (CUPE) representative David Werlin. And despite concerns expressed by Finance Minister Michael Wilson and Bank of Canada governor John Crow about possibly inflationary wage increases, union leaders vowed to press ahead with demands for substantial raises. Said Keith

Oleksiuk, a Vancouver delegate from the United Steelworkers of America: “The troops are saying something has to happen, because [the Tories] aren’t listening, and we are getting screwed.”

Some of that rising labor militancy has already been felt at the bargaining table—and


beyond. Last week, 17,000 Ontario plumbing and sheet-metal workers sent a powerful message to government, as well as to their employers, when they went on strike. The plumbers were demanding a 10-per-cent wage increase, double the current national inflation rate of five per cent. The workers’ claims were partially fuelled by the inflationary effect that they say the proposed federal Goods and Services Tax

(GST) will have on prices. The size of the eventual settlement of that contract, and of 19 others that expire across Canada over the next seven months, will themselves place strong upward pressure on the inflation level and on interest rates in 1991—and they could torpedo the federal government’s entire economic strategy.

Several of the unions negotiating those contracts have already tabled demands for stiff wage increases. Earlier ^ this month, the Canadian 3 Paperworkers Union anW nounced that it would be tarir geting U.S.-owned Stone $ Consolidated Ltd. in Montrey al in its demands for an eight| per-cent wage increase in u each of the next two years in addition to cost-of-living increases. For its part, CUPE—

Canada’s largest union—is also seeking a pay hike of as much as nine per cent for its 377,000 government-employee members across Canada. In Alberta, 1,000 provincial government social workers, who are demanding a wage hike to give them parity with psychologists and other provincial health care workers, have

been on strike since May 1. And in July, the powerful United Steelworkers of America will begin a critical round of negotiations with Hamilton-based Stelco Steel, the principal subsidiary of Stelco Inc. While the Steelworkers have not yet tabled their demands, in March the union won a 9.7-per-cent wage increase in each of the next three years for its 1,550 members at the Iron Ore Co. of Canada in Labrador City, Nfld. Overall, wage increases for the contracts that have already been settled in the first quarter of this year have averaged 6.2 per cent, compared with 4.4 per cent for the same period in 1989.

If unions continue to win increases in excess of inflation, it will threaten two of Ottawa’s major economic objectives—dampening prices with high interest rates and smoothly implementing the seven-per-cent GST next Jan. 1.

For their part, Wilson and Crow say that they can keep general price increases in check if they can prevent the economy from overheating. But, last week, Canadian Auto Workers president Robert White declared, “I say to hell with you, John Crow.”

Still, Crow is not the only opponent of higher wage settlements. Private employers who say that they must keep their labor costs level with those of their U.S. competitors are also digging in to limit increases. Indeed, Thomas Kierans, president of the Toronto-based C. D. Howe

Institute, says that the size of the wage settlements that labor wins over the next six months will have a critical impact on manufacturing and resource companies. Said Kierans: “The question at the end of the day will be how much can they afford to pay and still be competitive.” Despite the pleas from Ottawa and business executives for restraint, however, union leaders say that their tough new wage demands are well-founded. Those leaders say that, despite seven years of strong economic growth since the 1981-1982 recession, unionized wage increases have lagged behind the inflation rate and organized labor is no longer willing to make contract concessions. Since the recession, unionized wage increases have averaged 4.2 per cent per year, while the inflation rate has

averaged 4.5 per cent per year. As well, White and other union leaders complain that it is unfair for Ottawa to urge them to rein in their demands while it is pursuing policies that are increasing the cost of living. Said White: “Workers are going to get hit hard by the GST and high interest rates.”

But even though they did not share fully in the economic boom since the recession, workers have also been reluctant to turn to unions to help them win bigger raises over the same period. From 1983 until 1988, union

membership rose by only 10.7 per cent, to 3.9 million, while Canada’s total workforce grew by 22 per cent. As well, the commitment of already-unionized workers to defend their contracts by striking seemed to wane by the end of the decade. The total days lost in strikes—the most tangible expression of union militancy—was about two million days in 1989, barely a quarter of the average loss throughout the 1970s. Many leaders, including White, blame the apparent softening in union support on a lack of leadership by Carr, who has been CLC president since 1986. Indeed, in December, White asked Carr to step down. Last week, many delegates to the CLC convention also complained that, while Carr is outspoken, she has been ineffective in

fighting Conservative economic policies.

Now, however, even with Carr at the helm, unions appear poised to return to the angry confrontations that won them double-digit increases during the 1970s. The 17,000 Ontario plumbers and sheet-metal workers who walked off the job last week were not alone: they joined 15,000 electricians who went on strike a week earlier. The strikes could cost contractors, who declined to reveal their wage offer, millions of dollars, as huge projects, such as construction of a third terminal at Toronto’s congested Pearson International Airport, fall behind schedule. Still, the tradesmen have vowed to stay out until their demands are met. Jerry Boyle, executive director of the Ontario Pipe Trades Council, says that growing inflation and the looming GST have made union members more militant than they were in the last round of bargaining two years ago, when construction strikes delayed completion of Toronto’s SkyDome. Said Boyle: “The fact that we are on strike again shows we are tougher.”

Similar toughness is expected to mark coming negotiations in three major industrial sectors—forestry, steel and auto manufacturing. Indeed, the forestry sector’s most powerful union is preparing for a classic struggle with Stone Consolidated Inc., the giant Montrealbased pulp-and-paper firm. On the management side, the union faces staunch anti-unionist Roger Stone, the Chicago entrepreneur who bought the former Consolidated-Bathurst firm for $2.6 billion last year. Paperworkers union president Don Holder says that the company was chosen because rival pulp-and-paper giant Abitibi-Price Inc. was targeted in each of the last three negotiating years.

Many economists predict that the paperworkers’ demand for cost-of-living increases, when added to eight-per-cent annual wage increases over two years, could result in total annual increases of 14 per cent. But to back its demands, Holder said, the union has a formida-

ble strike fund of $11 million at its disposal for Stone workers. Said Holder: “It is going to be a tough summer.” Another contentious battle for higher wages will open in July, when union representatives for 16,000 steelworkers at Hamilton-based Stelco Steel sit down at the negotiating table. The potential for a strike is high, because bargaining will open against a backdrop of shrinking international steel markets and falling prices against the foreground of the Iron Ore Co.’s settlement. Stelco Steel’s parent, Stelco Inc., had a loss of $13.3 million in the first

three months of 1990, compared with a $32.7million profit during the same period in 1989. As well, the company announced last month that it had reduced its payroll by 700 over the previous year through attrition. Hard-pressed Stelco Steel executives say

that they cannot afford the 9.7-per-cent, plus cost-of-living, agreement that the Steelworkers won from Iron Ore Co. Frederick Telmer, Stelco Steel’s president, who will become chairman of parent Stelco Inc. next January, says that cutthroat international steel price wars and the 84.76-cent (U.S.) Canadian dollar, which has made Canadian exports more expensive, have combined to put immense pressure on the company. Because it must compete in a continental free market under the


Average annum unionized wage settlements

Free Trade Agreement, Telmer says, Stelco Steel cannot automatically raise prices to pass on higher labor costs. Added Telmer: “We don’t have any place to go.”

International competitiveness will also weigh heavily in labor negotiations at General

Motors of Canada Ltd., Ford Motor Co. of Canada Ltd. and at Chrysler Canada Ltd. The CAW’s current three-year contract expires on Sept. 14 and, by tradition, the union will again isolate one of the three domestic automakers for a major precedent-setting contract. The union will be aiming to offset the GST while gaining more job security. Wayne Strong, GM’s director of labor relations, says that management will propose keeping pay increases at or below the level of inflation when the two sides meet on July 24. The company’s 44,000 workers are currently paid an average of $29 per hour, including benefits, but Strong says that Japanese and other overseas carmakers, as well as nonunionized foreign-owned plants in Canada, operate with lower labor costs.

Despite the growing Japanese competition, Tom Hoar, the CAW’s plant chairman at GM’s sprawling Oshawa, Ont., complex, says that workers are not going to make any concessions this time around. As well, Hoar said that, after three years of healthy profits at the Big Three domestic automakers, the CAW’s 67,330 members in Big Three plants deserve a fair settlement. Says Hoar: “We’ve lost ground.”

When urged to be moderate by Wilson and Crow, private-sector union leaders can point with some justification to their counterparts in the public sector, who have been granted increases well in excess of the current five-percent inflation rate. Last month, Ontario Hydro’s 17,900 workers—represented by CUPE—won a pay hike of 6.9 per cent in the first year and 6.7 per cent in the second year of their new contract. Last month, 2,300 federal employees in Ottawa, represented by the Public Service Alliance of Canada, received a settlement that will give them an 8.2-per-cent pay hike annually for each of the next four years.

Ignoring calls for restraint, CUPE’s president Jeff Rose said that his union’s demand for at least an eight-per-cent wage increase to compensate for inflation, as well as for the antici-

pated impact of the GST, is justified. Said Rose: “We have nothing to apologize for. We have a right to live.” Ernest Stokes, an economist with the WEFA Group, a Toronto-based private economic-forecasting agency, says that, in addition to rising wage demands, the demand for labor itself is still strong, putting added upward pressure on wages. Stokes says that Crow’s strategy is to cool the economy and thereby raise the unemployment rate, which in turn eases labor pressure. In that scenario, organized labor’s sudden taste for confrontation may

wane as rank-and-file members become more

fearful of joining the unemployment lines.




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