Public Sector Unions
and Government Restraint
Week 8
United Nations: Universal Declaration of
Human Rights

Article 23 (4): Everyone has the right to
form and to join trade unions for the
protection of his [or her] interests.
http://www.un.org/en/documents/udhr/
International Labour Organization (ILO),
an agency of the United Nations
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In its constitution (1919), the ILO affirms “freedom of
association” as a global labour right.
In 1948-49, ILO conventions number 87 (Freedom
of Association and the Right to Organize) and
number 98 (The Right to Organize and Collective
Bargaining) affirmed the rights to bargain collectively
and to strike.
In 1998, the ILO’s Declaration on Fundamental
Principles and Rights at Work reaffirmed the
“fundamental rights” to “freedom of association and
the effective recognition of the right to collective
bargaining.”
www.ilo.org
Recent Labour Conflicts

Jim Stanford. “Raitt’s Three Principles for
labour relations only run one way,” Globe &
Mail. November 2, 2011.
http://www.theglobeandmail.com/news/opinions/opinion/raitts-three-principles-for-labour-relationsonly-run-one-way/article2221394/
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Contracted out transit service in York Region
is currently experiencing a strike.
http://www.cbc.ca/news/canada/toronto/story/2011/10/23/toronto-bus-strikes-loom.html
Labour Movement in Canada
Four major waves of working-class resistance
and labour militancy when the labour
movement expanded its membership and
its goals:
1.
the 1880s,
2.
the end of First World War,
3.
during and after the Second World War,
4.
and the decade after 1965.
Development of unions in Canada
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Until 1872, union activity was illegal in Canada. Yet
workers had formed unions and went on strike
regardless.
In 1872, thousands of workers in cities and towns
throughout southern Ontario and Quebec, went on strike
to secure the nine-hour day.
http://ontarioplaques.com/Plaques_GHI/Plaque_Hamilton02.html
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It included printers at the Globe newspaper owned by
George Brown, a prominent Liberal. Brown had the
union leaders charged for engaging in a seditious
conspiracy.
http://www.torontohistory.org/Pages_PQR/Printers_Strike_of_1872.html
The Nine-Hour Movement of 1872
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George Brown’s political rival, John A. Macdonald
sensed a political opportunity and passed the Trade
Unions Act which legalized union formation.
However, it did not require employers to recognize
unions or engage in collective bargaining.
In 1876, federal legislation granted some legal room
for picketing.
A national labour organization, the Trades and
Labor Congress of Canada (TLC) was established in
1886.
1880s: the Knights of Labor
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“The 1880s were a decade of unprecedented
working-class militancy, centred in the emergence of
an organization called the Noble and Holy Order of
the Knights of Labor, a body different from the trade
unions inasmuch as it sought to bring all workers
into one grand organization” (Palmer, 1992: 120).
The leadership of the Knights spoke of class cooperation rather than class struggle and tended to
dislike strikes, but the Knights were involved with
most of the major labour struggles and strikes of the
1880s and early 1890s.
Winnipeg General Strike, 1919
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metalworkers struggling for union recognition
asked for support, as a result some 25,00030,000 workers went on strike, strike lasted 6
weeks.
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Essential services were maintained during the
strike as authorized by the Central Strike
Committee.
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the North-West Mounted Police fired into a crowd
killing two strikers.
Winnipeg General Strike, 1919
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Workers in other cities struck in sympathy with
Winnipeg.
Victoria, Vancouver, New Westminster, Prince
Rupert, Calgary, Edmonton, Medicine Hat, Prince
Albert, Regina, Saskatoon, Brandon, Port Arthur,
Toronto, Montreal, and Amherst, Nova Scotia, all
saw general strikes called to support the workers
in Winnipeg and to protest the arrests of strike
leaders.
1940s: Industrial Unionism
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“The great watershed was the 1940s. Before that
point, almost every effort by various labour
movements to win a permanent place in Canadian
industrial and political life was beaten back by
hostile employers and a generally unsympathetic
state.”
“It was only during and immediately following World
War II that unions made the breakthrough that
allowed them to operate, within a tightly controlled
framework, in most mass-production, resource, and
transportation industries” (Heron, 1996: xviii).
Industrial Unionism

breakthrough for industrial unionism in the
manufacturing sector came in 1937 with the
strike for union recognition at the GM plant in
Oshawa.
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1943, one in three union members in the
country was on strike.
Rise of Institutionalized
Collective Bargaining in the Private Sector
1944 Privy Council Order PC 1003:
 established a process to allow workers to certify a
union,
 once a union was certified the employer was
obligated to recognize the union,
 it also established grievance-arbitration procedures
which involves a mechanism for the resolution of
grievances without resort to strike action;
 banned strikes during the life of a collective
agreement, banning sympathy or solidarity strikes
Rise of Institutionalized
Collective Bargaining in the Private Sector

1945 Ford Windsor strike; workers blocked the plant
with cars; arbitration and Justice Ivan Rand came up
with what has been known as the Rand formula; all
members of bargaining unit pay dues, but does not
compel them to be members of the union, union dues
to be paid automatically by check-off.
http://ontarioplaques.com/Plaques_DEF/Plaque_Essex28.html
Postwar bargaining system (private sector)
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institutionalized the labour movement, incorporated
them into the system.
Grievance procedures meant that disputes were
settled by professionals rather than rank and file
membership;
institutionalized procedures rather than mobilization
or strikes;
union leaders were pushed to police their own
members to prevent them from striking during the
term of the collective agreement;
Cold War era of the 1950s meant that Communism
and radicalism in general was suppressed by
government, business and unions.
Public Sector Workers
Saskatchewan
 1944 CCF government led by Tommy Douglas
extended collective bargaining rights, including right
to strike, to provincial government employees.
Federal
 National Joint Council of the Public Service, 1944
 Merely an advisory board, involving consultation
with public employees
Rise and Fall of the Postwar Settlement in
Canada
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
End of WWII ushers in era of Keynesian
demand management, development of
welfare state and institutionalized collective
bargaining regime.
Economic turbulence of the 1970s and the
corporate response turns the tide in the
direction of neo-liberalism.
The Shift to Keynesianism
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Great Depression of the 1930s
War economy, 1939-45
Foreign models: Franklin Delano Roosevelt
(1933-45) in USA, Labour Party government
(1945-51) in Britain.
Alleged success of our war-time ally, the
Soviet Union
Rise of the CCF
Rise of industrial unionism
Rise of the
Postwar Settlement in Canada
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1943 Report on Social Security in Canada
1945 White Paper on Employment and
Income - commits the government to goal of
“high and stable levels of employment”
Labour Militancy in the 60s and 70s
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There was a significant burst of labour militancy in the
late 60s up until the mid 70s, led by young workers, often
rebelling against their own union leadership
Canada had more strikes and more workers on strike
than any advanced capitalist country other than Italy;
about a third of these were illegal wildcat strikes;
Public Sector Unionization
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Late 60s also saw the beginning of the unionization of the public
sector.
Provincial: Quebec grants collective bargaining rights to public
sector workers, 1965. Remaining provinces do likewise from 19681978.
Federal: Public Service Staff Relations Act, 1967
Restrictions on issues that can be negotiated - “Excluded are all
matters respecting the organization of the public service, the
assignment of duties, the classification of positions, and job
evaluation” (Johnson, 2011: 369).
“estimated that public sector union membership increased from
approximately 183,000 members in 1961 to 1.5 million members in
1981” (Rose, 2007: 185).
Public Sector Unionization

In 1972, Quebec’s public sector workers formed
the “Common Front” and engaged in a massive
public sector general strike (with sympathy
strikes by private sector workers) involving some
250,000 to 300,000 workers, the largest strike
(and among the most radical) in Canadian
history.
Labour Movement Today
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Uppal, Sharanjit. 2011. “Unionization 2011” Perspectives
on Labour and Income. Vol. 23, No. 4. Winter. Statistics
Canada Catalogue no. 75-001-X.
Unionization rate: 29.7% (female workers: 31.1%, male
workers: 28.2%)
“The highest unionization rates were in public sector
industries”
In 2011, 74.7% of public sector workers were covered by
a collective agreement, but only 17.5% of private sector
workers.
“a wage premium exists, which, after controlling for
employee and workplace characteristics, has been
estimated at 7.7%”
The Growth of Social Programs
Old Age Pensions (1927)
Blind Persons’ Allowance (1937)
Unemployment Insurance (1941)
Family Allowances (1944)
Old Age Security (1951)
Hospital Insurance (1957)
Canada Pension Plan (1966)
Canada Assistance Plan (1966)
Guaranteed Income Supplement (1966)
Medical Insurance (1968)
U.I. expanded (1971)
The Backlash:
Business Militancy and
Public Sector Restraint
Onset of Inflation (%) in Canada
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
2.9
4.7
7.8
10.8
10.8
7.5
8.0
9.0
9.1
10.2
12.4
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
10.9
5.7
4.4
3.9
4.2
4.4
4.0
5.0
4.8
5.6
1.5
Rising Unemployment (%)
in Canada
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
3.8
4.4
6.2
5.5
6.9
8.0
7.5
7.6
12.0
10.6
1987
1989
1991
1993
1995
1997
1999
2001
2003
2004
8.8
7.6
10.3
11.4
9.6
9.2
7.6
7.2
7.6
7.2
The International Context:
American Leadership Challenged
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The ‘Nixon shock’, the US ends the
convertibility of the US dollar to gold, 1971
OPEC oil embargo and oil crisis, 1973
The United States withdraws from Vietnam,
1973
proposals for a New International Economic
Order, 1974
Iranian Revolution, 1979
The Backlash
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The combination of
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domestic social movements,
international economic turbulence
and international political uncertainty
led to a social and political backlash against the
welfare state and the rights of labour.
Corporate militancy

The period from the mid-1970s onward has
been described by some as class politics (or
class war) from above, as the business
sector has aggressively mobilized to defend
their interests in Canada and elsewhere.
The Backlash in Canada
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In Canada, the backlash was, to some
degree, delayed. While 1968 saw the victory
of Nixon in the US, Canada experienced
‘Trudeaumania’ in the same year.
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Still, the Canadian corporate elite would
engage in a similar process of organizing as
occurred elsewhere.
Canadian Council of Chief Executives
(CCCE)
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Founded in 1976 as Business Council on National
Issues (BCNI). CCCE – 2001.
composed of the chief executive officers of 150
leading Canadian enterprises, widely recognized as
Canada's most influential business organization.
The companies they lead collectively administer
C$3.2 trillion in assets, have annual revenues in
excess of C$750 billion.
Thomas d'Aquino was the CEO and President of the
BCNI/CCCE for 28 years, on January 1, 2010 he
was replaced by John Manley, a former federal
cabinet minister during the Chrétien government.
The Backlash: Corporate and Advocacy
Think Tanks
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Conference Board of Canada, 1954
C.D. Howe Institute, 1973
Fraser Institute, 1974
Atlantic Institute for Market Studies (AIMS),
1994
Montreal Economic Institute, 1999
Frontier Centre for Public Policy, 1999
The Backlash:
Neoliberal Citizen Groups
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National Citizens Coalition, 1967
Canadian Taxpayers Federation, 1990
Crisis of Keynesianism
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economic difficulties, a crisis of public finance
(rising public sector deficits and debt), and
concerns about global competition provided
the context for the shift away from
Keynesianism and toward neoliberalism.
Foreign models: Margaret Thatcher (19791990) and Ronald Reagan (1981-1989).
End of Keynesianism
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In 1979, the American govt turned to high
interest rates to squeeze inflation and the
Bank of Canada followed, these high interest
rates led to the most significant economic
recession since the 1930s, but it served the
purpose of squeezing inflation and
disciplining labour.
Canadian Govt Response
Restraint imposed on labour, especially
public sector workers.
Anti-Inflation Program (wage and price
controls) 1975-1978
Public Sector Compensation Restraint Act (“6
and 5” program) 1982-1984
Canadian Govt Response
Restraint imposed on labour, especially
public sector workers.
Joseph Rose, describes these years as the
“restraint years” (1982-1990) and the
“retrenchment years” (1990-1997).
Federal Govt Response
Monetary Restraint
From 1975 onward, Canada’s central bank, the
Bank of Canada, was committed to monetary
restraint.
Particularly in the 1980s, the Bank of Canada
followed the lead of the US Federal Reserve
in using high interest rates to defeat inflation.
Federal Govt Response
Restraint imposed on transfers to
provinces
Established Programs Financing (EPF): block
funding arrangement replaced cost-shared
programs for health and post-secondary
education, 1977
Major Privatizations
by Federal Government
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de Haviland 1986
Canadair 1986
Teleglobe 1987
Canadian Development Corporation 1987
Air Canada 1988
Petro-Canada 1991
Nordion International 1991
Telesat 1992
CNR 1995
NavCanada 1996
Federal Govt Response
Massive spending cuts,
especially in 1995 budget.
Canada Health and Social Transfer
(CHST)
replaces EPF and
Canada Assistance Plan (CAP)
Federal Govt Response
“The 1995 federal budget marked a
fundamental shift in the role of the
federal state in Canada”
(McBride, 2005: 106).
Federal Govt Restraint
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Following the 1995 federal budget, the Public
Service Alliance of Canada (PSAC) lost 21%
of its membership within 3 years (Fudge,
2005: 44).
Social programs in retreat
Corporate interests have mobilized to advocate neoliberal policies including:
 free trade agreements,
 the deregulation of foreign investment in Canada,
 tax cuts,
 the privatization of public services, and
 reductions in social spending.
Successive federal governments have responded by
restraining social spending and attempting to reduce
the role of the state in the economy.
Canada in comparison
Canadians tend to compare ourselves with the
US and point to stronger social programs and
public health care, but compared to other rich
developed countries, Canada spends
relatively little on social programs and has a
relatively high degree of social inequality.
In 2007, UNICEF ranked Canada 12th among
21 ‘rich countries’ in child well-being.
http://www.unicef.org/media/files/ChildPovertyReport.pdf
Corporate Restructuring
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At the same time that the state was engaged in this
shift to neoliberalism; employers were responding
through economic restructuring to deal with the
labour militancy and the economic turbulence. The
corporate sector responded by:
re-organizing workplaces,
speeding up production,
introducing new technologies in a process described
as lean production,
they also investing internationally,
and moved to support trade and investment
liberalization.
Growing Inequality under Neoliberalism
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“From 1946 to 1980, family incomes grew at all
points in the distribution, so incomes shares
remained roughly unchanged, and median family
incomes and living standards rose rapidly. In the
1981 to 2006 period, when the gains from growth
went to the top end of the distribution, real incomes
for most families stagnated” (Osberg, 2008:17).
“After 1995, ongoing changes in transfers rapidly
reduced the redistributive role of the Canadian
state” (Osberg, 2008: 30).
Growing Inequality under Neoliberalism
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“Declining unionization, a lower minimum
wage, higher unemployment, less social
insurance protection and more openness to
international competition probably interact
strongly in their impacts on inequality. If so,
they should be viewed as a ‘policy package’,
to contrast with the policy package of the
period before 1980” (Osberg, 2008: 34).
Conclusion:
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Canadians tend to consider their society to be a
kinder, gentler, more egalitarian version of the
United States.
However, the more generous welfare state in
Canada only emerged in the 1960s. And by
international standards, Canada looks more like the
US than different.
By the 1980s, many of these programs were
beginning to be whittled away. In the mid-1990s,
Canadian governments made a serious shift to fiscal
restraint.
Camfield, 2011.
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“The ‘Great Recession,’ the Employers’ Offensive
and the Canadian Public Sector Unions”
Toronto Municipal Strike of 2009: “The corporate
media were filled with hostile coverage of the strike.
The unions were portrayed as greedy and unrealistic
for trying to defend paid sick day provisions in their
contracts that were better than those of most
workers. The fact that these provisions had been
agreed to by their employer in exchange for
monetary concessions by the unions in the past was
almost never mentioned” (103).
Camfield, 2011.
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“The strike revealed just how many workers,
feeling acutely insecure about their own jobs
and fearful of the economic crisis would affect
them and their families, were quick to
respond with hostility to public sector workers
defending past gains” (105).
“Many people react with anger at those who
seek to defend rights, benefits or wages that
are better than what they themselves enjoy,
rather than wishing them well” (106).