A new study by the Fraser Institute says Canada is suffering from weaker job markets due to its rigid and union-friendly provincial labour laws.

The study, Measuring Labour Markets in Canada and the United States: 2004 Edition, was jointly produced with the U.S.-based National Center for Policy Analysis.

“Canada’s current labour laws have significantly restricted worker choice and forced higher unionization rates,” said Jason Clemens, co-author of the study and director of fiscal studies at the Fraser Institute.

“This is one of the reasons why a period of fairly solid economic growth in Canada has not translated into a stronger job market in most provinces.”

AUPE’s Dan MacLennan

But Dan MacLennan, president of the Alberta Union of Provincial Employees (AUPE), countered that his group’s research shows that unions are good for a province’s economy.

MacLennan said unions increase the likelihood of Canadian employees having health benefits in conjunction with provincial medicare – which American employees are unlikely to have.

Businesses are also more likely to do business in Canada because their health benefits are underwritten, added MacLennan.

“Things like auto companies, they know that private healthcare, which is much more prevalent in the States, makes it much more prohibitive to do business there,” said MacLennan.

He said the Fraser Institute would rather tout its causes than debate. “I don’t view them as a research institute,” said MacLennan. “They’re an advocate.”

This past year, Canadian Labour Congress president Ken Georgetti has seen Air Canada squeeze hundreds of millions of dollars in concessions from its workers, watched battles to organize non-unionized Wal-Mart Canada and seen escalating tensions between governments and thousands of public-sector workers.

Aliant Telecommunications workers have hit the picket lines in Atlantic Canada for four months over what they see are threats to pensions and benefits, and Parks Canada workers went on strike amid growing federal civil service unrest.

Meanwhile, insolvent steel giant Stelco is seeking major concessions from its workers to reduce operating and pension costs as the Hamilton company tries to restructure to stay alive.

Though unions are being challenged on various fronts in both the public and private sectors, Georgetti said that’s nothing new.

“The challenges are always the same,” said the head of CLC, a lobby group for Canadian unions and workers. “The people that we work for are always trying to find ways and reasons to push back the gains that we’ve made at the bargaining table, or reduce them.”

While fighting to keep the gains they’ve won, unions in Canada are also trying to increase membership rolls. According to Statistics Canada, while four million Canadians belonged to unions last year – a record high – only about 30 per cent of the country’s 13 million workers are represented by unions, down from a peak of 34.2 per cent in 1987.

Georgetti said there’s a lag between job growth and unions’ ability to organize. However, in an attempt to improve the image of unions, the CLC is taking steps to remind Canadians of labour movement gains over the past decades, with slogans such as, “Unions are the people that brought you the weekend.”

“Eighty per cent of our members have pension plans. Ninety-four per cent of our members have dental and alternate health-care plans,” he said.

While workers have made gains, critics claim union demands have jeopardized investment in Canada in industries such as the automotive sector, and left companies such as Air Canada and Stelco less able to compete with non-union competitors such as WestJet Airlines and Dofasco.

Despite strong growth in the Canadian economy, corporate Canada is being generally tightfisted with raises, in part because of intense price pressures in many industries from foreign competition.

While skilled workers in the northern Alberta oilsands have been getting big pay hikes in recent years because of a labour shortage and rising demand for their services, many private- sector unions are generally settling for raises around the inflation rate.

The Fraser Institute’s Clemens argues that rigid labour laws have reduced investment and ultimately affected productivity and job growth.

“The question for Canadians is, is it worth it to have higher unemployment rates, a poor job creation record and lower productivity in order to have these (union) benefits?” Clemens asked.

He also questioned whether Canadian unions are really speaking for all of the members they claim to represent.

Some American so-called “right-to-work” states allow workers a choice about joining a union and paying full union dues. In Canada, “all of the provinces in one way or another allow forced union membership and forced full-dues payment,” Clemens said.

In Alberta, the AUPE has grown to 58,000 members from 37,000 in the last five years.

“People see the benefits of being in a union contract – and Alberta is the hardest place in Canada to get a union contract,” said MacLennan.

People who are opposed to minimum wage, he added, “just don’t get it,” because a high minimum wage is good for the economy. “We’ve got $40 (per barrel) oil – that has nothing to do with minimum wage.”

MacLennan said Alberta’s rate of $5.90 per hour – the lowest in Canada – “should be drastically increased.”

There are “a whole bunch of people” in Calgary, Edmonton and Vancouver being left out of the economy because of low wages, he added. “There’s a big gap between high-income earners and low-income earners – and unions have got to close that gap.”

Labour leaders also say they’re standing up for retirees facing increased threats to their pensions. The United Steelworkers, for example, has been willing to take Stelco to the Supreme Court, arguing the steelmaker is claiming insolvency so it can slash pension plans and other benefits workers have earned over the years.

And at Air Canada, the unions refused to accept pension plan changes requested by a proposed equity investor. The investor refused to drop the request and called the unions’ bluff, but a later investor stepped up to rescue the airline.

“It showed that all of the unions are willing to fight to maintain their defined benefit pension plans, even at the expense of risking a major investor,” said Buzz Hargrove, president of the Canadian Auto Workers, Canada’s largest private sector union.

– With files from Monte Stewart and The Canadian Press