Manitoba Labour Laws Squander Kyoto Advantage

Commentary, Workplace, Murdoch Mackay

Manitoba’s government is unequivocally bullish about the economic promise of the newly ratified Kyoto Accord for this province. But it is unlikely that we will be able to realize Kyoto-driven economic gains as long as the government continues to author anti-business labour laws that discourage industrial activity and growth. Without a serious reappraisal and revision of these laws, Manitoba will actually be at a disadvantage under Kyoto.

Despite strong increases in population growth in other regions of the country, Manitoba has shown little over the past half-century. When Canada’s population was 16 million people, Manitoba had about one million people. Now Canada has more than 30 million people and Manitoba still has only a little over one million. During the last five or six years, Manitoba’s population increased by 1.4%, but the Canadian population grew 4.8%.

Manitoba’s labour productivity rate is 13% lower than the national average and our GDP per capita 14% below the national average. We need to work harder and free ourselves from legislated impediments.

Clearly the presence of abundant hydro-electric power has not, by itself, been enough to stimulate the growth of population and investment the way Alberta’s oil industry has for that province. Alberta is growing faster, both in population and industrial activity, than any other part of Canada. The easy conclusion is that they have oil. But Manitoba has vast electric power and we have developed it for just as long as Alberta has exploited petroleum. Manitoba should and can become a major centre of industrial activity because of the natural blessing of an abundance of cheap and Kyoto-friendly energy. Manufacturing and other businesses that require large volumes of electrical power should be attracted to Manitoba as a low-cost place to establish and grow their operations.

But businesses must consider a myriad of factors besides the costs of inputs and materials when they consider where they will locate their plants. Right up near the top of the list is whether the climate for labour relations offers a reasonable hope for new or expanded operations. Even if these enterprises can obtain high volumes of power at low cost, no sensible business owner would choose to establish operations in a place with labour laws that are openly hostile or unfair.

Manitoba’s greatest asset has been made impotent by its labour laws. Who would open a plant where a union has six months to sign up its members but any employees not wanting to join the union have only two days to sign up their supporters? The Labour Board enforces this two-day limit with great rigour. When employers want to bargain an entire collective agreement, not just what the union wishes to discuss, the Board threatens them with fines in the millions of dollars. It has the power to run Manitoba businesses by imposing first agreements, and now second and third ones as well. The Labour Act is far from even-handed. It and the Labour Board keep jobs out of Manitoba.

Manitobans have been cheated out of their share of the last century’s economic development. Manitobans are being asked to conserve, to be power smart, so that power not used in Manitoba can be exported. It, and future power from the possible construction of the massive Conawapa project, leaves the province primarily as surplus power at cheaper rates than Manitobans pay, and jobs are being exported with it.

Our province has so much energy to export because industry will not come here to set up plants in the face of anti-business labour legislation and a Labour Board perceived to be biased. With our cheap power and increased immigration, we are uniquely positioned for much more industrial growth. But unless industries and their employees can expect better treatment, they will not come. What we have now will not expand and may go elsewhere. A change in direction, a radical message to industry here and in the rest of Canada, is imperative. A good start would be to change the Labour Board to a non-bipartisan industrial commission (ie no industry or labour members).

We should look to the labour acts of growing provinces like Alberta and Ontario. Without these changes, Manitoba will continue to export its nice clean power while importing natural gas, which may double in price if Kyoto becomes operative. If Hydro does not make electric power available to Manitobans and attract industry, home heating costs may force even more Manitobans to leave.

The message we now send to industry from Manitoba is this: Bring your new plant here, where we have the cheapest power in North America, and we will guarantee that, if you cannot agree with a union on how to run your plant, the government through its Labour Board will do it for you year after year. Is it any wonder that the answer to Manitoba is… no thanks?

The Kyoto Accord could bring Manitoba higher rates of economic growth and more people, but only if we get our own labour laws in order so we have jobs available.

Perspectives are commentaries by the research advisory board and expert guest commentators. They do not necessarily represent the opinions of the board of directors of the Frontier Centre for Public Policy.