Six Worries for Workers This Labour Day

What can Alberta workers expect from a United Conservative Party government over the next four years? The UCP’s first term cheapened labour costs for employers. Its 2023 election platform contained few promises related to labour and employment issues beyond the usual nostrums about low taxes creating jobs. We think workers should watch six issues.

1. Low wages, high unemployment, and Inequity

While the number of jobs in Alberta has increased, more job seekers and layoffs mean Alberta’s unemployment rate remains the fifth highest in Canada. For those with jobs, the purchasing power of their average hourly wage has fallen by 4.95% (or about $3,000 per worker) over the past 10 years. Alberta is only one of three provinces to experience this loss.

By October, Alberta’s minimum wage will be the third lowest in the country while Alberta’s cost of living remains among the highest. The UCP is unlikely to raise the minimum wage from 2018’s $15 per hour. This means inflation will further erode the purchasing power of 11.5% of Alberta workers, the majority of whom are women.

Not surprisingly, Alberta also continues to have the highest gender wage gap in Canada. In July of 2023, Alberta women earned 84 cents for every dollar men earned (averaging $31.52 per hour vs. $37.61 per hour). The UCP is unlikely to address this gap.

 

2. Illusion of low-cost childcare

Under an agreement with the federal government, the UCP has promised to implement $10 per day childcare by 2026 as well as create 70,000 additional spaces. While childcare fees have declined, $10 per day childcare is likely to be a chimera.

In February, the UCP established a cost-control framework for childcare. Government funding will ensure that “core” childcare is provided for $10 per day. But the UCP is encouraging providers to charge fees for “enhanced” childcare, such as food, activities, playground equipment, and better qualified staff. Providers are being told they do not have to spend all of these enhanced fees on the enhanced services (i.e., private providers can pad their profits with these fees).

Since demand for childcare spaces will continue to outstrip supply, parents who decline to pay the enhanced fees (i.e., want $10 per day childcare) may have difficulty securing a space because they reduce the providers’ profits. Further, low wages and limited training and professional development opportunities suggest the goal of 70,000 additional spaces may be wildly optimistic.

 

3. An Alberta Pension Plan

Alberta has been flirting with the idea of leaving the Canada Pension Plan (CPP) and creating an Alberta Pension Plan (APP) since 2019, putatively to lower premiums. The UCP did not campaign on the APP, likely because more than half of Albertans are opposed to the idea.

Withdrawing from the CPP requires three years of notice. The terms of Alberta’s departure are difficult to predict since no jurisdiction has ever left the plan. Departure may constitute a major change in the plan, which would require the approval of 7 of the 10 provinces (representing two-thirds of the population) and the federal government.

There are many unanswered questions about an APP, including its financial stability and likely returns, operating cost, the portability of contributions, and its susceptibility to political meddling. Quebec’s experience with running its own pension plan suggests that doing so does not necessarily result in lower premiums.

 

4. Public-sector bargaining

In 2019, the UCP gave itself the power to foist secret bargaining mandates on public-sector employers, rendering collective bargaining a fettered and hollow process. All unions eventually settled for wage increases well below inflation, after years of prior wage freezes. Despite the negative impact that uncompetitive wages have on recruitment, retention, and productivity, it is likely the UCP will go back to this well in the hope of further grinding public-sector wages.

It is unclear whether Alberta’s public-sector workers and their unions have the will to meaningfully resist such a tactic. Resistance would require workers to strike and, perhaps, to do so illegally in the face of back-to-work legislation. That is a risky proposition for both workers and their unions’ leadership. That said, only last fall, Ontario’s unions forced the Ford government to walk back legislated contracts through an illegal strike by education workers that looked set to escalate to a general strike.

Public-sector workers are also likely to see further privatization of their jobs, as the UCP did with laundry and laboratory services in health care. The UCP may also provide more public funding to private-sector providers of education and health-care services.

 

5. Recruitment and Retention

Not surprisingly, declining compensation, childcare shortages, and uncertainty about the CPP have meant some Alberta employers are struggling to recruit and retain workers. The UCP has promised a $1,200 tax credit for workers in fields such as health care, childcare, and the skilled trades who come and work in Alberta for at least a year, and a $3,000 to $10,000 tax credit (spread over multiple years) for new graduates in unspecified fields who stay in Alberta to work.

These promises are essentially an admission that Alberta is not an attractive place to live and work. Neither promise is very significant in monetary terms and, if implemented, they are unlikely to have much impact on worker shortages because of the negative impact of the UCP’s education and health-care agenda. Increasing post-secondary tuition and a defective K-12 curriculum (e.g., “find gravity on a globe”) make Alberta an unattractive place to study or raise children. Ongoing staffing shortages, the unavailability of rural obstetrical care, and the botched privatization of laboratory services suggest the health-care system is also failing.

 

6. Union Dues and Bill 32

The UCP has promised to fix one of their controversial changes to Alberta’s labour laws (commonly called Bill 32) that accidentally cost community organizations $2.5 million in lost donations from unions. This happened because Bill 32 required unions to get each member to authorize dues deductions for activities beyond collective bargaining and contract administration. This was designed to constrain unions’ abilities to participate in political and advocacy campaigns but also affected donations.

Before the election, many unions quietly decided to simply ignore Bill 32. It will be interesting to watch how (and, indeed, if) the UCP handles enforcement. It may choose to pursue legal action against these unions. Or it may take the position Bill 32 achieved its political goals and ignore widespread non-compliance.

 

Conclusion

The UCP has a difficult course to navigate over the next four years. Its political goals include low taxes, low wages, a diminished public sector, and increased privatization. None of the outcomes of these goals are attractive to the skilled workers that Alberta requires. Indeed, declining real-dollar wages, failing health-care and education systems, unstable retirement income, and unavailable childcare are likely to impede both worker recruitment and retention.

 

Photos by Markus Spiske and Koshu Kunii on Unsplash