NOVEMBER 4, 1976
Let's Get Back to People
AN ADDRESS BY Rodrique J. Bilodeau, Esq.,
PRESIDENT, CANADIAN MANUFACTURERS ASSOCIATION
CHAIRMAN The President,
William M. Karn
Mr. Minister, Mr. President, Reverend Sir, distinguished guests, ladies and gentlemen: Nothing gives me greater pleasure than to introduce to you a noted industrialist, a tri-lingual engineer, the elected head of the trade association which encompasses that area of activity with which I have been personally involved for more than thirty-six years.
In 1976, the Canadian Manufacturers' Association held its 106th annual meeting. It was founded 33 years before The Empire Club of Canada, and is older than most counterpart organizations in other industrialized countries of the western world. It now embraces roughly 5,000 member Canadian manufacturing companies, which constitute more than 80% of this country's total manufacturing capacity, and is subdivided according to geographical regions from coast to coast.
Because Canadian industry has become more and more specialized, member companies have had to form additional associations specific to the needs of the sector in which they operate. To name a few--the Electric and Electronic Manufacturers' Association, the Canadian Textile Institute, the Canadian Chemical Producers' Association, the Canathan Pulp and Paper Association, the Motor Vehicles Manufacturers' Association, the Grocery Products Manufacturers' Association.
But the broadly based C.M.A. speaks on behalf of industry in general, and this year more than ever before is trying to prove that the free enterprise system has been working in Canada, and must continue to work regardless of its weaknesses, if this country is to hold its position among the leading industrialized nations of the world.
Our guest of honour today, who is Chairman of the Board of Honeywell Limited, began with that company in its industrial division sales department in Montreal in 1950. He brought to that position his university training at St. Francis Xavier, McGill and Harvard, together with his experience as a pilot overseas with 407 Squadron. He progressed to national sales manager before being moved to Frankfurt, Germany in 1959 as manager of the industrial products group for Europe. Within two years he became assistant director of the European operation and in 1964 was appointed president of Honeywell S.A. in France.
However, Canada still needed him, and he returned to the local company in 1968, moving up to president in 1970 and chairman four years later.
He also serves on the board of directors of Texaco Canada Limited and McQueen Sales Co. Ltd., and is vicepresident and director of the Canadian Council, International Chamber of Commerce.
To education and the public in general he is making additional contributions, serving on the board of governors of the North York General Hospital, the board of management of the Hospitals' Computer Centre in Metro Toronto, and the board of governors of the Research Laboratories of Laval University's Faculty of Business Administration.
Ladies and gentlemen, Mr. Rodrigue J. Bilodeau has a message of great significance to our future well-being. I now invite him to speak to you on his subject: "Let's Get Back to People".
Mr. Chairman, ladies and gentlemen: There is a lot of talk these days about what policies Canada should adopt now and in the years ahead so that we can get out of controls and restore a strong sense of direction to the country. It is a difficult search because there are many conflicting pressures being placed on all institutions today. Among all these conflicting pressures it is difficult to find the right thrust, the right balance of priorities, which will give us direction so that we don't drift aimlessly, or worse still, head in the wrong direction.
The seemingly aimless thrashing about to find so-called post-controls policies, it seems to me, comes to a large extent from not asking ourselves the right questions. And yet, only in asking ourselves the right questions can we find answers that will allow us to start from the right premise.
We need to ask ourselves: What is the most basic, solid foundation upon which to build a socio-economic environment in Canada that will allow the country to prosper without the highly dislocative problem of inflation?
To my mind, this foundation, which is basic to real democracy, is a concern for the individual. The most urgent requirement today is that our institutions serve people as individuals. They must ensure that the fundamental rights of the individual to freedom, opportunity and justice are respected. This should be the ultimate yardstick with which to measure our socio-economic system's performance.
Macro-economics may have become too fashionable, and it seems to me that greater attention to the individual provides a more firm underpinning of stability, which is so necessary to sustain the good economic performance sought by businessmen.
Our institutions are increasingly being questioned and, to some extent, mistrusted because they are perceived as losing track of the individual. Therefore, it is essential that institutions re-examine critically how they relate to the individual--not only the individuals they serve in their own constituencies, but all individuals in Canadian society. As a result, it becomes important to ask ourselves if the objectives of our institutions are seen to serve the interest of individual Canadians. If they do not, then we need to make evolutionary changes now or face the alternative of being submitted to radical and revolutionary changes later.
Let me try to explain what I mean by examining briefly the institutions of unions, governments and corporations against the yardstick I have proposed.
I think it is good manners to first examine the corporate sector, as managers and shareholders, before commenting on the others.
Are we as businessmen keeping our nose so close to the grindstone of efficiency, of sales growth, of market share and all other technical aspects of running a business that we are not placing sufficient priority on the individuals who make up the heart of the corporation?
Although we complain a lot about the average citizen not understanding how the economy works, are we doing all we could to inform our own employees of the basic facts? And while we try to cope with unions of our employees, are we really asking ourselves to what extent their very existence is a result of our own failure to understand the needs of the individuals within our companies and our failure to provide facility and opportunity for them to communicate with us? Have we been so long in the adversary system of "us" against "them" that we automatically defend some disembodied concept of the company as if it were somehow separate from the people who make it function?
Periodically, managements need to meditate and fresher up their own thinking on the purpose of the whole of our economic system and our role in it. The system has no meaning by itself. It takes on significance only when it: performance is related to human beings.
Although it is technically true that new machines, new techniques, better organization and so on are the major source of productivity improvement, it is no accident that the most common measure is output related to either the number of people or hours worked. The individual is really what it's all about.
A corporation is, of course, accountable to its shareholders. But today, this link is somewhat tenuous as shareholdings have become heavily concentrated in large institutions such as pension trust funds. As is the case with employees, management constantly needs to remind itself of the importance of the individual shareholder and of his need for pertinent facts regarding management of the assets represented by his stock.
With the growing concern over the distribution of income and wealth, corporate responsiveness to the individual in society is being questioned in a new way. In the United States, there is already legislation which provides incentives for more individuals to own shares of enterprises. This is seen as having a number of beneficial results in terms of commitment of employees to enterprises, economic education, productivity, and availability of badly needed equity capital for companies.
The C.M.A. has a small group studying this subject, but perhaps it is time more businessmen in Canada also looked into these areas. It could be a long-term key to the survival of the corporation, and capitalism itself, as well as a system which emphasizes benefits to the individual.
If you will permit a small digression, I want to take this opportunity to highlight a responsibility that I believe businessmen have to all Canadians in relation to a crucial issue--and that is the very real danger that this country may not survive as a unified nation.
I am personally greatly disturbed by the apparent growing bitterness in different parts of the country between French-speaking and English-speaking Canadians. Too many people are saying, rather glibly, that we might just as well let Quebec go its separate way, without realizing the full implications.
I don't want to get into all the cultural and political implications of that possibility, but I think businessmen have a responsibility to explain to Canadians that it is simplistic to think that only Canadians in Quebec would pay an economic price. In fact, the likelihood is that a lot of other Canadians throughout the country would also find their jobs in jeopardy. The basic reason is that we would be looking at a major fragmentation of markets.
I know that in my own company if the large chunk of our Canadian market represented by Quebec were removed, the remaining volume base might no longer be sufficient to ensure the viability of our Canadian manufacturing operations. Given the fact that Canadian manufacturers are already having serious competitive problems, it is very likely that a broken-up Canadian market would be served more economically by foreign manufacturers. That is the hard fact that many companies in Canada would face. I believe it is our responsibility in industry to point out such hard facts to Canadians so that they can think through clearly the impact on them, as individuals, if Canada were allowed to break up.
This economic consideration alone is sufficient to convince me of where my true interests lie on this issue. However, I can assure you that my wish for a united Canada rests on other values of considerably greater importance. I have too much faith in the possibilities for this country, and in the qualities of its people, regardless of their origins, to give up on it, and I am sure that deep within you, you share that feeling.
As for unions in this country, and the whole structure of laws, regulations and tribunals which govern their conduct, there are some major deficiencies that need to be corrected if we are to restore the equilibrium necessary to the proper functioning of the market economy and restore the individual to his proper place.
At this point I must once again digress briefly to say that I am totally in agreement with the response of the President of the Canadian Labour Congress, Joe Morris, to the announcement last week that the federal government intends to impose works councils on industries coming under federal jurisdiction.
This is one of the many initiatives which the federal government sees as being necessary to get us out of controls. Mr. Morris was quick to point out that the C.L.C. had not been consulted on the proposal and he objected vociferously on the grounds that such councils would only serve to muddle communications between unions and management, thereby worsening rather than facilitating collective bargaining.
The C.M.A. and C.L.C. hold divergent views on many issues but there are also issues upon which we agree, and I do wish the government would listen to us when we express a common viewpoint.
We do need some fundamental improvement in labour-management relations and collective bargaining before controls can safely be removed. But the improvements must be much more fundamental than an attempt to transplant one aspect of the European systems into ours. Unless they were to evolve through the will of the parties in the Canadian system, works councils would generate hostilities rather than ease them. Works councils in effect would not provide any better representation than is currently enjoyed by workers in Canada. Works councils originated in Europe primarily because workers in the same plants belong to two or more trade unions and the works council was the only mechanism available to raise issues of the workplace.
The certification of unions on the basis of membership cards as evidence of majority support has often resulted in the use of unethical means to acquire the needed number of cards.
As for the laws governing union activities, we need to ask why the secret supervised ballot, which has been the cornerstone of democracies as a means of calling elected representatives to account at regular intervals, has been virtually abandoned in the field of labour relations. That the judgment of labour boards serves individual employees better than the ballot box as a means of determining their wishes is pretty confused thinking, in my view, and yet this is what the law says.
Law enforcement in industrial relations is another area where we need to ask some questions. The flouting of both labour law and the Criminal Code of Canada has become commonplace, with each unpunished violation reinforcing the myth that "anything goes", as long as it is sanctified by a picket line. Many people have forgotten that the sole legal purpose of a picket line is to inform everyone that a strike is in process. Any other purpose serves merely to trample on the rights of individuals to put in an honest day's work if they so wish. And the problem of disregard for the law is compounded by the fact that in most jurisdictions, unions cannot sue or be sued in the courts.
Disrespect for the law is also encouraged in some circumstances by employers. An example is when the employer drops legal action in connection with illegal acts by the union. This form of expediency serves only to encourage the further use of unlawful means.
There are many other ways in which individual rights are being trampled on:
- Should we continue to tolerate, for example, collective agreements that in effect deny the individual a livelihood solely because he chooses not to be represented or become a member of a trade union? Is this denial of the right to disassociate really fair to individuals?
- Should employees be obliged to join or pay monies to a labour union as a condition of employment by any level of government in Canada? Is this form of compulsory taxation really fair to individuals?
- Should government contracts be awarded only to unionized companies? Is this justice for individual workers who choose not to unionize?
The Woods report observed that: "Given the potential power that unions can exercise over present and prospective members, one would expect that steps would have been taken to prevent abuse. . . In fact little has been done except for the occasional ad hoc measure introduced in the face of glaring abuses."
More recently the Cliche Commission in Quebec, and the Waisberg Commission in Ontario revealed a host of examples whereby construction union officials have been able to systematically exploit construction workers. Quite apart from criminal prosecutions, it is evident that the monopoly power of hiring halls should be taken out of the hands of trade unions and this is precisely what the Cliche report recommended.
The original legislative protections thought necessary in the early days to shield and encourage an infant union movement have outlived their requirement. Surely there is no doubt that unions today are strong mature institutions. But this very fact places a heavy responsibility on our union leaders to strengthen their organizations by ensuring that the rights of individuals within their ranks, and of all Canadians, are fully respected.
Turning now to governments, there are signs that Canadians have become very disenchanted about the thought of governments doing everything for them. They have the nagging feeling in the pit of their stomachs that governments have reached the point where they are so large, so powerful, and so pervasive that the government sector is now a force of its own. It takes in and re-allocates over 40% of the total income flow. Canadians feel overwhelmed by the incredible range of laws, policies, regulations, standards, programs, subsidies, payments, prohibitions, taxes, forms, licences, tribunals, and so on, that now govern virtually all aspects of our lives.
With this pervasive presence, Canadians are wondering if governments still represent the people or if they are looking more and more after their own interests as massive institutions.
The creeping encroachment on disposable income by increasing tax loads, with dubious return benefits, is certainly leaving less and less discretion to the individual. And yet, I am encouraged to see a note of humility in the White Paper entitled: "The Way Ahead", which was published by the federal government just a few weeks ago. I think many of us were looking for something called, "The Way Out". But perhaps that will come a little later.
In any case, I noted a number of heartening statements. The White Paper said: "The government has concluded, however, that what is ultimately required to meet the challenges of the future goes beyond the introduction of new policy measures to a basic fundamental assessment of the role of government itself." And it also repeated a commitment to individual freedom and called upon individuals to do more on their own instead of relying on governments.
Certainly, with regard to a number of programs of transfer payments, a lot more Canadians have been telling their governments that, without abandoning the ideals of social justice, it is time we gave more attention to the rights of those individuals who produce and pay the twills. In other words, in a finite economy there are distinct limits to income redistribution schemes which seek to impose one particular group's conception of what should be.
This is heading in the right direction, but I think you would share with me the view that it's up to the electorate to insist that all the good intentions outlined in the White Paper are, in fact, translated into deed. And the first step towards that goal will be to establish conditions necessary to get the removal of wage and profits control.
This must be done to avoid incurring another round of inflation. Nothing shows more disrespect for individuals than inflation. The White Paper now acknowledges that restraint in taxing, spending and in intervention is the prescription for the future. The White Paper goes to great lengths to point out the inflationary results of rising expectations that exceed the ability of our economy to provide the goods and services which are demanded.
I think we can all accept the notion that the underlying causes of inflation are very complex and an important part of the solution is to explain to individuals how our market economy really works to his advantage. But the point I want to make here is that any program of public education and information explaining how the economy works can only be partially successful in defeating inflationary expectations. The real need is for us, the electorate, to give our full support to those politicians who have the guts to say no to inflationary demands. It is only with this support that they can effectively restrain the momentum of government spending and intervention.
To summarize then, I have said that companies need to take more time and more care to demonstrate their sensitivity to individuals. I have argued that unions are encroaching on individual rights as institutions--and that, we should question their accountability. As for governments, I have argued that there are great dangers that their' sheer complexity and size pose for the individual.
I think Canadians as individuals feel helpless as too many institutions, despite the best intentions, have imposed upon them their conceptions of what is supposedly in the interest of the individual. If the search for new approaches in the post-control era does nothing else but restore a greater respect for the individual, a great deal will have been accomplished.
In closing, it occurred to me that we need to take a new approach to the well known saying: "Stop the world; I want to get off." Canadians need a sense of participation, a sense of belonging and a sense of worth as individuals. Perhaps they are telling companies, unions and governments: "Stop the world; I want to get on."
The appreciation of the audience was expressed by Mr. James H. Joyce, a Past President of The Empire Club of Canada.