Labour Policy | The Canadian Encyclopedia


Labour Policy

Labour policy includes policies concerned with relations between employers and employees and those concerned with the employment, training and distribution of workers in the LABOUR MARKET.

Labour Policy

Labour policy includes policies concerned with relations between employers and employees and those concerned with the employment, training and distribution of workers in the LABOUR MARKET. INDUSTRIAL RELATIONS in Canada were governed through the common law of conspiracy in restraint of trade until 1872 when, as a result of the jailing of striking Toronto printers in a dispute with George BROWN, Prime Minister John A. MACDONALD introduced the Trade Unions Act legalizing unions.

While professing neutrality in labour matters, government has often intervened without legal basis on behalf of employers. The first direct legislative intervention in labour-management relations came with the Industrial Disputes Investigation Act (1907) prohibiting STRIKES AND LOCKOUTS in public utilities and mines until a dispute had been investigated. The Act had been prepared by W.L. Mackenzie KING who, in 1909, became the first full-time labour minister.

Jurisdiction over labour relations was transferred to the provinces in the interwar period until wartime emergency and rising labour discontent led to the passage of wartime order-in-council PC 1003 (1944), which provided for the right to organize and to engage in COLLECTIVE BARGAINING. After the war, jurisdiction over most labour relations returned to the provinces, and conflicts and disagreements over industrial relations are normally referred to provincial or federal tribunals or boards for adjudication. Though governments at both levels generally adopted the principles of the wartime measures, more recently there has been increasing provincial diversity in adherence to these principles.

Labour market policy has been aimed at maintaining, allocating and ensuring a plentiful supply of labour; implementing strategies to increase the mobility of labour, including relocation and retraining; job creation and enhancement; managing the unemployed; and implementing appropriate social policies. It has frequently reflected economic policy which has traditionally involved hinterland resource exploitation, eg, immigration policy to encourage settlement and agricultural development in the prairie region. A comprehensive manpower policy was introduced (excluding wartime) only in the 1960s. Most provinces have their own policies, not all of which are in harmony with those of the federal government.

The earliest Canadian labour-market policy was the attempt during the time of Jean TALON, in the late 17th century, to consolidate French control of the St Lawrence region through settlement. Although opposed by the fur-trading monopolies, efforts were made to increase population through encouragement of immigration, the shipment of young women from France, the settlement of demobilized soldiers and the promotion of natural increase through state subsidies for early marriage and large families.

In the FUR TRADE, the native peoples provided much of the labour as suppliers and transporters, and French Canadian traders, COUREURS DE BOIS and VOYAGEURS located new resources and brought the furs to port. The HUDSON'S BAY COMPANY developed another de facto policy. The native peoples acted as suppliers and brought the furs to the Bay until Orkney labourers began to handle transport to the interior. Métis communities developed as suppliers of PEMMICAN, guides, freighters and labourers; the English were merchants, traders and managers.

The encouragement of immigration and settlement continued after the Conquest (1760), reaching its peak in the late 19th century and the first decade of the 20th. Massive numbers of immigrant workers were imported to build the transcontinental railway. A royal commission (reported 1908) revealed that 2 CPR subcontractors alone had imported some 6000 oriental labourers. The federal government and the CPR also co-operated in an ambitious recruiting campaign to populate the Prairies, first in England, Scandinavia and western Europe and then, by necessity, in eastern and southern Europe. Many of these immigrants supplied a labour reserve for mines, highways and factories as well as breaking land on the Prairies. The policy of importing workers was opposed by labour, which was able to persuade government to intervene, eg, in passing the Alien Labour Law (1897).

Immigration was sharply curtailed by legislation in 1923 during the postwar depression but was encouraged for particular types of skilled workers after WWII and then, in the 1960s, policy was greatly liberalized. Since then, immigration has been much less significant as a labour-market policy tool although periodically, usually at the bidding of particular provinces, immigration of particular groups of workers has been encouraged to fill specific skill shortages (eg, Filipino seamstresses for Manitoba's garment industry).

Government support of manpower development was not restricted to encouraging immigration. Soon after the Conquest, agricultural societies and exhibitions were promoted as a means of providing agricultural education. Beginning in Ontario, public education spread across much of Canada in the second half of the 19th century, one of its explicit aims being the preparation of young men for the labour market. Prior to WWII there were a number of sporadic and ad hoc incursions into labour-market policy by all levels of government, usually in response to high unemployment. Several municipal governments in the larger centres established employment exchanges or became involved in public relief work, as did provincial governments.

By 1914 "relief work" was a common response to the growing numbers of unemployed men who were given a bed and meals in exchange for performing menial or odd jobs, eg, cutting firewood and sewer work. During the GREAT DEPRESSION the federal government resorted to deportation and work camps. In 1930, at the urging of provincial and municipal governments, 4000 people were deported, some 45% of whom had been receiving public assistance, several hundred of whom were ill.

Relief work was reinstituted and in 1932 work camps administered by the Department of National Defence were established. Around 17 000 men were detained in 10 camps in remote areas of Alberta alone. The Conservative government under Prime Minister R.B. BENNETT did attempt unsuccessfully to introduce an unemployment insurance program in 1935, but it was not until a constitutional amendment to the BNA Act in 1940 that the federal government became directly involved in employment exchanges.

The establishment of the Unemployment Insurance Commission (UIC) and its affiliated National Employment Service (NES), which derived from the wartime registration program (1940), marks the first systematic labour-market policy. The NES was to match unemployed workers with unfilled job vacancies, using the employment centres as clearing houses. Almost immediately it began allocating labour to priority wartime work and administering the selective-service system, but in the generally buoyant economic conditions after the war it returned to its placement work.

In the late 1950s, unemployment and concern with structural unemployment (unemployment created by regular cyclical crises and that created by technological change, corporate conglomeration and shifting world markets) began to rise, resulting in the Technical and Vocational Training Assistance Act (1960), a shared-cost program with the provinces for the provision of occupational training and training facilities. The central importance of the labour-exchange function of labour-market policy was consequently downgraded.

In 1966 the government established the Department of Manpower and Immigration (DMI), responsible for all manpower policy except unemployment insurance (see EMPLOYMENT INSURANCE). The Adult Occupational Training Act (1967) under the Canada Manpower Training Plan (CMTP) emphasized training; it was federally funded but no longer included capital grants for facilities and was restricted to adults only.

In the 1970s the persistence of unemployment and poverty, particularly among disadvantaged youths, women, natives, the handicapped and residents of areas suffering high unemployment, prompted a new interest in the management of unemployment and in the containment of potential crises. Training, counselling and relocation strategies proved inadequate and governments again resorted to job creation. (In the 1950s they had funded winter-works programs to combat seasonal unemployment.)

Programs such as Opportunities for Youth (OFY), a summer scheme for students; Local Initiatives Program (LIP) for winter unemployment; and Local Employment Assistance Program (LEAP) to aid the hard-core unemployed were introduced in the 1970s under the Job Creation Branch of the DMI. In 1975 a joint scheme with the provinces was added, the Community Employment Strategy. In addition, the federal and provincial governments attempted to stimulate activity in the private sector through a variety of incentives, eg, tax considerations, loan guarantees, direct grants and subsidies and infusions of equity.

The government also reunited its labour-market and immigration branch with the UIC in 1976. The new department, Employment and Immigration, supervised the Canadian Employment and Immigration Commission, which was responsible for implementing programs and the insurance scheme. Under revisions to the Unemployment Insurance Act, funds also became available for job creation and work sharing.

The election of the Mulroney Conservative government in 1984 resulted in a reorganization of labour programs, under the title of the Canadian Jobs Strategy, introduced in 1985. The major programs under this strategy were job development, work experience and training for the long-term unemployed through job subsidies; job entry, a combination of training with on-the-job experience to facilitate the entry of youths and women into the labour market; skill shortages and skill investment, subsidization of wages, on-the-job training, retraining and classroom instruction to develop skills in short supply and retrain workers whose jobs were threatened by technological or market change; community futures, funding for job development in communities with chronic or potential unemployment problems; and financial support for innovations facilitating labour-market adjustment. At the same time the government began the introduction of cutbacks in Unemployment Insurance (UI) benefits and coverage and in the social programs underpinning the labour market.

The return of the Liberals to power in 1993 brought further cutbacks in UI and the social safety net and another major shift in labour-market policy. Labour market, industrial relations, UI and income security were brought under the umbrella of a new department, Human Resources Development Canada (HRDC). UI insurance coverage, eligibility and benefits were greatly reduced such that by 1998 only 38% of the unemployed received benefits, down from 45% in 1996 and 67% before the Liberal amendments. In January 1997 the insurance scheme was renamed "Employment Insurance" (EI). Eligibility requirements were further increased, particularly for part-time workers, and again benefits were reduced. Also introduced at this time were reduced benefit rates for repeat recipients of EI payments.

HRDC has followed a deliberate policy of reducing its direct provision of labour market services in favour of "client self-reliance," using video kiosks to provide on-line labour market information. As well, many of the labour market adjustment programs have been offloaded onto sectoral (private), provincial, non-governmental organization and aboriginal partnerships under the "strategic initiatives" program, while many departmental responsibilities for job creation and training have been transferred to the Employment Insurance program. The result of these changes has been a major reduction in the government's participation and expenditure in active labour market programs and policies.

In 1991 DMI operated 470 Canada Employment Centres (CECs) across the country and over 400 other university centres and itinerant employment services in remote communities. Since HRDC was created in 1993, increased reliance has been placed on the on-line labour-market information kiosks, telecentres with 1-800 toll free service, and, most recently, Internet web sites to provide the labour exchange function as part of what is now called the Service Delivery Network (SDN).

By 1998 HRDC had 320 full-service Human Resource Centres (HRCCs, the former CECs), 5100 self-service kiosks, 21 telecentres, 10 mail service centres, 6 Information Technology Centres and 6 websites (National Job Bank, Work Search, Counsellor Resource Centre, Human Resource Office For Employers, Electronic Labour Exchange and Labour Market Information) included in its SDN. In 1997-98 the Electronic Labour Exchange (ELE) recorded 160 000 employer searches for workers, 90% of which were successful. The National Job Bank was accessed 10.5 million times through the kiosks while the Internet job site listed 400 000 jobs.

The cutbacks in EI, the expansion of electronic services and the offloading of adjustment and training programs have generally resulted in falling labour-market-related expenditures. Between fiscal years 1993-94 and 1997-98, expenditures from UI/EI account fell by more than one-third, largely as a result of a decline in regular unemployment benefits. However, regular benefits still accounted for 64% of total EI spending. Since 1994-95, expenditures from the EI account for labour market development uses (including training, job creation, self-employment, wage subsidies and employment assistance) have declined by 18% to $1.61 billion, representing just 12% of EI spending in 1997-98.

Expenditures by HRDC on departmental Human Resources Investment programs (including youth, the Atlantic Groundfish Strategy, vocational rehabilitation of disabled persons, aboriginals, Transitional Jobs Fund, strategic initiatives, student loans and literacy) have also declined since 1995-96, by 20% to just over $2 billion. A third of that sum was for student loans. Over the same period, expenditures on the labour exchange function declined 12% to $220 million.

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