Below and attached is a detailed background document providing analysis of Tim Hudak’s recent white paper on “Flexible Labour Markets.” Hudak’s paper poses a threat to the livelihoods of all working people by proposing to eliminate workers’ right to collectively bargain and by driving wages down across the board.

Please circulate the attached analysis to your members so they can challenge Hudak’s arguments in the workplace, in their communities, and in the media.

In solidarity,

Sid Ryan

President of the Ontario Federation of Labour



Tim Hudak’s White Paper on Flexible Labour Markets

Published on July 16, 2012Courtesty of TARA WALTON/TORONTO STAR

Flexible Labour Means Cheap labour

In June 2012, Ontario Progressive Conservative leader Tim Hudak opened up a new attack on labour unions and working people with his release of his white paper on “Flexible Labour Markets.” The paper lays out the Tories’ new platform on workers’ rights and unveils an economic scheme for the province that is centered on reduced public services and cheap labour. Blindly aligning their interests with those of profit-hungry corporations, the Tories fault unions for the province’s economic difficulties while offering no plan for creating new jobs, revitalizing the manufacturing sector or securing greater corporate investments in the provincial economy. They propose to bring Wisconsin-style laws to Ontario that would eliminate the rights of workers to collectively bargain and drive wages down for all workers. Hudak’s proposal is a plan for poverty, not prosperity, and it requires strong opposition from workers from every sector, whether union or non-union.

Flexible Labour Means Cheap labour

Throughout the white paper, Hudak laments the wages and benefits secured by workers in Ontario’s manufacturing sector and blames the workers for expecting to maintain middle-class wages to support their families. For Hudak, “prosperity” means turning Ontario into a low-wage, regulation-free haven where corporations rake in profit at the expense of Ontario workers, communities and the environment. “Flexible labour” means cheap labour.

In this respect, Hudak differs little from his federal counterpart Stephen Harper, who, as Prime Minister, has presided over an expanded Temporary Foreign Worker Program, allowing employers greater leeway to import people from all over the world with precious little obligation for their well-being. When the work is done, or if the worker is maimed on the job, they are literally disposed of—sent back to their home countries with nary a thought. Most recently, the Harper government gave employers the green light to pay migrant workers between 5 and 15 percent less than the average wage for that occupation


Lest we think this could never happen to “Canadian” workers, the Harper government has already signaled its intent to push workers with active Employment Insurance claims into jobs earmarked for Temporary Foreign Workers, including those jobs paying 5 to 15 percent less. In the last budget, Harper eliminated the federal Fair Wages and Hours of Labour Act and weakened pay equity provisions within the public service.

Cheap, flexible, and disposable: this is the Conservatives’ shared agenda, from Stephen Harper to Tim Hudak.

This ideology is barely concealed in Hudak’s white paper. In it, he approvingly cites a research document that suggests net manufacturing labour costs between the United States and China will “converge” in 2015.

In 2010, the average manufacturing wage rate in China was $3.10 US per hour, compared to $22.30 US. It seems hard to imagine that such a yawning wage gap could be overcome in a mere five years. Would this mean that Chinese wages are finally catching up with those in the U.S.? Hardly. While there has been some wage growth in China, in response to growing labour unrest (and a series of worker suicides) the real story here lies in the dramatic decline of manufacturing wages in the U.S.

Aircraft manufacturer Boeing has deliberately opened new plants in low-wage U.S. jurisdictions. There they pay their employees an average $14.00 US per hour – half the rate paid at its Washington plant where workers have fought to maintain decent pay and benefits through union membership. Likewise, in 2011, Boeing posted record profit rates – more than 20 percent higher than even the previous year when the company’s net income had soared by over 152 percent.

When Caterpillar workers at Electro-Motive Diesel in London, Ontario rejected a 50 percent wage cut, the company immediately announced the opening of a new plant in Muncie, Indiana where the wages range from $12.00 to about $14.50 US per hour—just over half the average 2010 manufacturing wage rate in the U.S. and much less than half the wages earned by the workers in London, Ontario. In 2011, Caterpillar posted a nearly 60 percent increase in fourth quarter profit and the highest yearly growth rate since 1947.

Rather than challenging a corporation that shut down Canadian operations in pursuit of cheap labour, Hudak was silent in the Legislative Assembly. He is now campaigning against the prosperity of London workers whose former wages sustained their families and the community as a whole, including businesses small and large. Even the Chamber of Commerce knew all too well what the loss of good jobs would mean for local businesses, and came out squarely in support of the workers. The London Mark’s Work Warehouse removed Caterpillar products from its shelves in protest.

Hudak is trying to imitate legislators in the U.S. who have introduced laws that make it harder for workers to organize collectively and defend their interests against domestic and multinational corporations. This has facilitated a downward trend in U.S. wages, not just among union members but also among all workers. As noted by the U.S. Bureau of Labor Statistics, the real median weekly earnings of U.S. wage and salary workers fell by almost two percent between 2010 and 2011.

This should be no surprise. As Indiana’s Commerce Secretary Dan Hasler stated plainly to the Wall Street Journal: “Our goal in Indiana is really pretty simple: It is to help companies improve profitability.”

Silencing the Critics & Neutralizing Opposition

Implementing a cheap labour strategy is not possible without neutralizing opposition.

Harper has led the way by attacking the finances of any group or individual that dares to criticize his policies: de-funding church-based charities and immigrant advocacy organizations, smearing environmental groups and firing outspoken public servants. And now, Tim Hudak is taking a page from the Harper playbook by attacking unions.

Because unions have an independent source of funding they are far less susceptible to the state-sanctioned bullying and financial blackmail regularly meted out by governments in collusion with the corporate elite. By undermining dues collection at source, Hudak hopes to undermine workers’ ability to oppose his agenda.

In seeking to repeal the Rand Formula, Hudak opens an affront on workers’ rights that even former Premier Mike Harris was unwilling to touch. The Rand Formula is a basic tenet of workplace democracy that was secured nearly sixty years ago to ensure that all those in the workplace who benefit from the improved wages and benefits achieved by the union make the same financial contribution. While the law allows workers not to join a union, they are required to contribute to charity an amount equivalent to the dues paid by union members.

For more than two centuries, working people have pooled their pennies to form unions and then shared their resources with other workers at home and around the world. Far from examples of “losing focus” as Hudak suggests, union members are proud of their record in support of human rights internationally. Indeed, as Ontario’s workforce has become more diverse—and more international—these traditions of solidarity have grown stronger.

For union members, sharing resources also means giving to charities. As only one of numerous examples, in 2011 working people across Canada contributed more than 50 percent of the United Way’s $500 million budget, through its partnership with the Canadian Labour Congress. In this light, Hudak’s attack on unions is also an assault on all those who depend on the services provided by the United Way and other worthy charities.

But there can be little doubt that what really offends Hudak is the fact that union members pool their resources to participate in municipal, provincial and federal elections. When voters pulled the rug out from under Hudak’s 2011 electoral campaign, he blamed Harris-weary union members for campaigning against him and running television ads to expose his agenda.

It is no coincidence that Hudak released his 20-page attack on basic workers’ rights immediately after an Ontario court struck down—for the third time—his legal challenge against the Working Families Coalition ads. A defiant Conservative MPP, Lisa MacLeod (Nepean—Carleton), told reporters: “we will continue to fight this in the court of public opinion.” And fight they did—issuing their call for all workers to be stripped of their collective rights.

Corporate Transparency: The One-Way Mirror

Hudak’s concern for fairness and transparency does not apply to his corporate backers. According to a recent study of Ontario elections, between 2004 and 2011, over 40 percent of Progressive Conservatives’ funds—$26 million—came from corporations. By contrast, the New Democratic Party received a paltry $666,000 from corporations. Overall, corporate contributions comprised nearly 40 percent of all election financing while union contributions made up a mere five percent. And in a testament to the extent of internal democracy within the labour movement, it is worth noting that union members donated money to parties of all political stripes, including the Progressive Conservatives.

In the last provincial election, the Conservatives received donations from over 500 corporations, including more than 40 numbered companies whose dealings we may never know, since there is no obligation for private corporations to reveal financial information. To add insult to injury, corporations enjoy a tax rebate that is more than double the tax rebate available to individuals, and corporations are allowed to carry forward unused tax credits for up to 20 years!

As individuals, wealthy CEOs and bankers, along with their respective spouses—and sometimes even children and extended family—regularly make the maximum possible contributions to their preferred party or candidate. Such largesse is rarely possible for low- and modest-income individuals; for many workers the only campaign contributions they will ever be able to afford are the ones they make collectively through their union.

Clearly, Hudak’s vitriol toward unions has little to do with protecting the interests of individuals and even less to do with protecting the integrity of our democratic processes. It is the modest efforts of union members to counter the influence of corporations and the wealthy that provokes the ire of Hudak and his followers.

Unions and Democracy

Unions are nothing more and nothing less than the sum of its members. Any organization comprised of human beings is subject to the same fallibilities. That is precisely why democratic union processes are so critical. As in any form of representative democracy, union members use conventions, general meetings and other formal gatherings to hold their leaders accountable—and to elect new ones. Members create new policies as necessary, adopt campaigns, review the allocation of financial resources and accept audited financial statements as already required by law. The members themselves debate and decide on the political priorities of their union; this is a basic democratic right.

If Hudak truly had the welfare of working people in mind, he would recognize that unions raise the bar – for all workers – on wages, benefits and working conditions, and that families with decent livelihoods have more money to spend on services and small businesses that help the economy thrive. This is the conclusion of the World Bank, which found that by every meaningful economic indicator, countries with higher rates of unionization have lower unemployment and inflation, higher productivity and speedier adjustments to economic shocks. Union membership also reduces wage differences between men and women. So, in a nutshell, improving workers’ rights is the best way to reduce economic inequality. But to be swayed by that moral argument, one first has to see equality and fair wages as a priority.

Conclusion: Ontarians Deserve Better

Hudak’s plan is hardly original. It is another variation on the race to the bottom where jobs are permanently in flux, wages are low and the social safety net has all but disappeared—yet corporations make out like bandits. His vision for lean government and labour flexibility represents a fundamentally different future from the one most Ontarians expect—and deserve.

Stripped to its core, Hudak’s vision is not about “modernizing” the labour market in the interests of prosperity for all. He seeks to usher in an era of permanent uncertainty for all working people to the overwhelming benefit of corporations. To accomplish this task, Hudak must neutralize his opponents in every possible arena, from the workplace to elections.

What Hudak forgets is that, regardless of the prevailing laws, working people have always come together to resist exploitation and to make working conditions better for the next generation of workers. That’s why union members work hard, not only to address workplace issues, but also to engage in the fight for permanent, progressive legal changes so that their children will have decent jobs and better lives.

For all these reasons, I am confident that—like they did eight months ago—the majority of Ontarians will reject Hudak’s pathway to poverty, and instead choose to make Ontario fair for everyone.

Thanks to Cope 343 staff and the OFL for providing this information.