Last week, Stephen Harper once again imposed the heavy hand of government in the marketplace and declared – well in advance of potential strike action by Air Canada unions – that he was not going to sit by while the airline “shuts itself down”.
Sound public and economic policy would have required that he do exactly that – nothing. He should have said nothing, too.
Back to work legislation should only be introduced in the rarest of cases. Mr. Harper has created a moral hazard. His regular market interventionism is extremely short sighted, and as in everything he does, completely political.
To add further confusion to the question, labour minister Lisa Raitt hit the airwaves to emphatically reiterate that her government “supports collective bargaining.”
Well, they sure have a funny way of showing it.
The issue isn’t with the collective bargaining process, per se, Ms. Raitt said. According to Canada’s minister of labour, the real problem is “that union members do not ratify the deals”.
Painfully implicit in that observation is Ms. Raitt’s gross ignorance for the fundamental notion that a deal is not a deal until members vote to accept the recommendations of their negotiating team. That too is a central tenet of collective bargaining. Ms. Raitt and her colleagues should know that.
The foundational core of collective bargaining is the right to strike. And when that right is taken away, the only real leverage that unions have goes with it.
By introducing back to work legislation on several occasions, Mr. Harper has decreed that right to be invalid. And in one Air Canada case, he also signaled that management cannot lockout its employees, either.
What is the Harper government’s policy towards collective bargaining in both the public and private sectors? What does it deem an essential service? Under what circumstances are legislative interventions warranted?
This is critical to know. The Harper government’s consistent interference in the collective bargaining process – and therefore the marketplace – has tremendous long-term costs to the vitality of the economy and investor confidence in Canada.
Ad hoc interventions also harm business competitiveness. If the senior management of Air Canada, for instance, knows that the federal government will intervene to bail it out of a mess of its own making, what incentive does it have to conclude sensible arrangements with its workforce?
The same question applies to any federally regulated industry, crown corporations, or the public service itself. Interventions of the kind we have come to expect of Mr. Harper unavoidably distort the market. The costs are significant and can be found in even lower productivity, less flexibility, less efficiency, and even rapidly eroding trust between management and labour.
Importantly, parties can no longer rely on the good offices of the minister of labour to help in the settlement of disputes. Under this government, Ottawa is no longer a respected honest broker during times of crisis.
Ottawa’s intervention masks two other important policy issues. The first one is its continued protection of monopolies, such as Air Canada. There are many other monopolies like it.
Our airports and our skies should be open to carriers that want to come into Canada. That would be good for Canadian consumers and regional economies. There’s also nothing like competition to compel labour and management – especially at Air Canada – to get their acts together.
The second is the broader problem of the dysfunction of labour-management relations that infects large swaths of our economy. Both mindsets are profoundly counter-productive and stuck in another age. The culture that they spawn fosters suspicion, lack of trust, and ultimately, confrontation.
Large unions in particular are bureaucracies with entrenched cultures. Their raison d’être is often to protect mediocrity and under-performance. They are rigidly handcuffed to the status quo. They protect “gains” from previous negotiations as an end in itself. Seniority, not merit, is the driving force. Protecting their membership numbers is paramount, not the efficiency, productivity and profitability of the enterprise. They view “the employer” as the enemy, and never a partner.
Often these views mirror those of CEO’s and their management teams. For them, unions are insurmountable barriers to progress. They are a necessary evil, something that must be, at best, tolerated. Employees and their representatives are not partners, but perversely, opponents.
Trust is the one overarching prerequisite to the success of any organization. In the cases of firms like Air Canada, there is no trust between union and management. Restoring it is an urgent imperative if the company is to thrive in a highly competitive global industry.
But that reality will not change so long as government intervention continues to further fuel that distrust. Quite the contrary, Harper’s moral hazard will ensure that poor behaviors not only persist well into the future, but it will get worse.
Labour-management disputes will intensify. It would not be unreasonable for managers in other sectors of the economy to expect the same preferential treatment from Ottawa. The resource and transportation sectors, a variety of crown corporations, and public service unions are up next. What will the Harper government do?
Mr. Harper has recklessly established a disincentive for negotiations to be conducted in good faith. He has created a dangerously toxic precedent where distrust between parties is – perversely – nurtured.
Nothing good will come from such an unsophisticated appreciation for how Canada’s economy actually functions. Mr. Harper is doing long-term damage to the very national economy he says he wants to protect.
Why this so-called “conservative” government should have to be reminded that competition is good for the consumer and healthy for the economy – and that intervention in the affairs of private enterprise is bad – is one of the great mysteries of our times.
Original Article
Source: ipolitics
Author: Daniel Veniez
Sound public and economic policy would have required that he do exactly that – nothing. He should have said nothing, too.
Back to work legislation should only be introduced in the rarest of cases. Mr. Harper has created a moral hazard. His regular market interventionism is extremely short sighted, and as in everything he does, completely political.
To add further confusion to the question, labour minister Lisa Raitt hit the airwaves to emphatically reiterate that her government “supports collective bargaining.”
Well, they sure have a funny way of showing it.
The issue isn’t with the collective bargaining process, per se, Ms. Raitt said. According to Canada’s minister of labour, the real problem is “that union members do not ratify the deals”.
Painfully implicit in that observation is Ms. Raitt’s gross ignorance for the fundamental notion that a deal is not a deal until members vote to accept the recommendations of their negotiating team. That too is a central tenet of collective bargaining. Ms. Raitt and her colleagues should know that.
The foundational core of collective bargaining is the right to strike. And when that right is taken away, the only real leverage that unions have goes with it.
By introducing back to work legislation on several occasions, Mr. Harper has decreed that right to be invalid. And in one Air Canada case, he also signaled that management cannot lockout its employees, either.
What is the Harper government’s policy towards collective bargaining in both the public and private sectors? What does it deem an essential service? Under what circumstances are legislative interventions warranted?
This is critical to know. The Harper government’s consistent interference in the collective bargaining process – and therefore the marketplace – has tremendous long-term costs to the vitality of the economy and investor confidence in Canada.
Ad hoc interventions also harm business competitiveness. If the senior management of Air Canada, for instance, knows that the federal government will intervene to bail it out of a mess of its own making, what incentive does it have to conclude sensible arrangements with its workforce?
The same question applies to any federally regulated industry, crown corporations, or the public service itself. Interventions of the kind we have come to expect of Mr. Harper unavoidably distort the market. The costs are significant and can be found in even lower productivity, less flexibility, less efficiency, and even rapidly eroding trust between management and labour.
Importantly, parties can no longer rely on the good offices of the minister of labour to help in the settlement of disputes. Under this government, Ottawa is no longer a respected honest broker during times of crisis.
Ottawa’s intervention masks two other important policy issues. The first one is its continued protection of monopolies, such as Air Canada. There are many other monopolies like it.
Our airports and our skies should be open to carriers that want to come into Canada. That would be good for Canadian consumers and regional economies. There’s also nothing like competition to compel labour and management – especially at Air Canada – to get their acts together.
The second is the broader problem of the dysfunction of labour-management relations that infects large swaths of our economy. Both mindsets are profoundly counter-productive and stuck in another age. The culture that they spawn fosters suspicion, lack of trust, and ultimately, confrontation.
Large unions in particular are bureaucracies with entrenched cultures. Their raison d’être is often to protect mediocrity and under-performance. They are rigidly handcuffed to the status quo. They protect “gains” from previous negotiations as an end in itself. Seniority, not merit, is the driving force. Protecting their membership numbers is paramount, not the efficiency, productivity and profitability of the enterprise. They view “the employer” as the enemy, and never a partner.
Often these views mirror those of CEO’s and their management teams. For them, unions are insurmountable barriers to progress. They are a necessary evil, something that must be, at best, tolerated. Employees and their representatives are not partners, but perversely, opponents.
Trust is the one overarching prerequisite to the success of any organization. In the cases of firms like Air Canada, there is no trust between union and management. Restoring it is an urgent imperative if the company is to thrive in a highly competitive global industry.
But that reality will not change so long as government intervention continues to further fuel that distrust. Quite the contrary, Harper’s moral hazard will ensure that poor behaviors not only persist well into the future, but it will get worse.
Labour-management disputes will intensify. It would not be unreasonable for managers in other sectors of the economy to expect the same preferential treatment from Ottawa. The resource and transportation sectors, a variety of crown corporations, and public service unions are up next. What will the Harper government do?
Mr. Harper has recklessly established a disincentive for negotiations to be conducted in good faith. He has created a dangerously toxic precedent where distrust between parties is – perversely – nurtured.
Nothing good will come from such an unsophisticated appreciation for how Canada’s economy actually functions. Mr. Harper is doing long-term damage to the very national economy he says he wants to protect.
Why this so-called “conservative” government should have to be reminded that competition is good for the consumer and healthy for the economy – and that intervention in the affairs of private enterprise is bad – is one of the great mysteries of our times.
Original Article
Source: ipolitics
Author: Daniel Veniez
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