Canadian Labour—Today

MR. POTTS:

Before I proceed with the introduction of our guest speaker, having regard to the distinguished labour leaders who are at our head table today, and in the audience as well, permit me to proudly put on record my own credentials. Some years ago I was a member of The International Brotherhood of Pulp, Sulphite and Paper Mill Workers, but I don't think my membership is now in good standing because I haven't been paying my dues recently.

Mr. MacDonald: "The Union doesn't exist either."

It is my great pressure and privilege to welcome back to The Empire Club of Canada, on your behalf, a great Canadian, Donald MacDonald, President of the Canadian Labour Congress. Many eminent economists have endeavoured to articulate the difference between capital and labour.

One, who can only be described as a wag, attempted to do so by defining each word as follows:

"The money you lend represents capital-trying to get it back represents labour."

Sir, we are indeed honoured by your presence today, particularly in view of the fact that you have taken time out to do so in the midst of an extremely busy schedule.

Speaking on the subject 'Problems of Industry & Labour', Mr. James A. Emery, Secretary of the Citizens Industrial Association of America, had this to say when addressing The Empire Club of Canada on October 25, 1906, and I quote:

"The relation between him who works and him for whom he works is not a problem of merely the present day. It is as old as man. . . "

From the first strike of the Hebrew bricklayers, related in Exodus, even to the present day, every nation has passed through its industrial difficulties. The adjustment of the relations between capital and labour troubled the Roman as much as it does the American, and when Minimus Agrippa met the Plebeians on the Sacred Mount outside of Rome, and related to them the story of the hands and the stomach as a means of persuading them to return again, he related, described, and illustrated a relationship as well as it has ever been described or paralleled from that day to this. The Plebeians felt that they were bearing an undue share of the cost of Roman life; that they received less than their share of the productions of the Roman civilization, and bore far more than they should of the burden of the State; and Agrippa told them the story of the hands, the feet, the various organs of the body, rebelling against further service to the stomach, and declaring that one did the work, and the other assisted, and each bore its share. What did the stomach do? It merely received, and enjoyed the fruit of their labour; and he impressed upon them the fact that it was the stomach that supplied strength to all the organs and enabled each to do its share toward continuing the life of the human machine, and so impressed them with the importance of that relationship between all these complex parts of the wonderful whole that they went back into the city, and renewed again, in a practical way, their attempt to solve their relations with their masters.

The Honourable William Lyon Mackenzie King spoke in a similar vein when he addressed the Club in 1919, on the subject "The Four Parties to Industry".

The Empire Club has provided a continuous forum for discussion of public issues by men of distinction since it was founded in 1903. Since that date no subject of discussion has been more pertinent, on a continuing basis, than that of Industrial Relations. Indeed, during that period, we have been repeatedly honoured by distinguished leaders of labour. To mention but a few-Samuel Gompers, President of the American Federation of Labour, Tom Moore, President of the Trades and Labour Council of Canada, William Green, President of the American Federation of Labour, Walter Reuther, Claude Jodoin, George Burt and Leonard Woodcock.

Our guest today is no less distinguished. Educated at the Sydney Academy in Cape Breton, he took several extension courses at St. Francis Xavier University, Antigonish, Nova Scotia, which University, in recognition of his outstanding contribution to the public life of Canada, conferred on him the degree of Doctor of Laws.

At 17 he went to work in the coal industry and at 21 was the President of his union, Local 4560, United Mine Workers of America.

He was elected to the Nova Scotia Legislature in 1941 and was leader of the C.C.F. Party in that Assembly until 1945.

Mr. MacDonald has long had an active interest in the cooperative movement, helping to organize three successful cooperative ventures in Nova Scotia in housing, credit union and consumer fields.

His interest in co-operatives has continued, and he has been instrumental in bringing about closer relations between the Canadian Labour Congress and the co-operative movement.

He was Regional Director of Organization of the Canadian Congress of Labour for the Maritimes and in 1951 became its secretarytreasurer and chief executive officer, continuing in that office when the Canadian Labour Congress was formed. He was elected President of that organization in 1968 and re-elected in 1970 and 1972.

He was singularly honoured this year in being the first nonEuropean to be elected President of the International Confederation of Free Trade Unions.

He is also a member of the Canada Labour Relations Board, the Economic Council of Canada, the Central Council of the Red Cross, The Canadian National Commission for UNESCO, the Executive of the Canada Safety Council and Vice-President of the Vanier Institute of the Family.

Gentlemen, Mr. Donald MacDonald, President of the Canadian Labour Congress.

MR. DONALD MacDONALD:

Thank you President Potts for that overly generous introduction. Honoured Head Table Guests, Gentlemen:

May I first of all say, in all sincerity, that it is to me a tremendous pleasure to have this opportunity to return and speak to this distinguished gathering. The Empire Club has long provided a platform for people from many walks of life to present their views on topics of the day. To me, to be included in this season's list of speakers is indeed flattering, especially when I note from that list that it has included two of our most eminent "practising politicians", in recent weeks.

As I will be your last guest speaker before Canada goes to the polls in four days' time, the thought entered my mind that I could be perhaps what is referred to in trade union parlance as the, "cooling off" period.

In one sense, I will not disappoint those who may desire respite from political speeches. On the other hand, thanks to the generous latitude extended to me by President Potts, I have taken it upon myself to choose as my subject today "Canadian Labour-today", which in itself perhaps could hardly be described as conducive to "cooling off" certain segments of Canadian society.

But that be as it may, it is a commonplace to say that changes in our society, and particularly in our institutions, are becoming increasingly accelerated. But this is certainly true insofar as the Canadian labour movement is concerned and perhaps a few figures, although I am not prone to quoting statistics, might nevertheless serve to outline the basic change which has taken place in the labour movement.

In recent years, organized labour has, this probably is known to all of you, increased in size. Since 1965, total membership in the Canadian labour movement has risen by 40 percent, to today where it counts in numbers to an aggregate of over 2,200,000 Canadian men and women who are members of our unions. A significant factor in this increase of course has been the organization of public service employees at all three levels of government. This, of course, in addition to the organizing activities of unions operating in the private sectors of the economy. I might add, having quoted the figure 2,200,000, that three-quarters of those belong to unions which are affiliated with the Canadian Labour Congress.

The growing numbers in the labour movement, to which I have made reference, together with substantial wage demands in recent years by our unions and, admittedly, their considerable success in achieving those wage demands, have been and are regarded with some foreboding in certain quarters. And we hear cries of alarm that unions are becoming too powerful, and time and again it is charged that unions are destroying the country's economy and "must be put in their place".

The less sophisticated invariably single out unions as the primary cause of any inflationary processes that we may be experiencing. Their simplistic solution is, invariably, to propose the imposition of wage controls.

In reply to these allegations, let me elaborate briefly on the role of our labour unions in the Canadian economy, as I see it.

It is quite true that wage demands and settlements have been higher in recent years. But I make no apology for this. On the contrary, I take pride in this very fact. These achievements have not in any way, shape or form proven to be adverse to the Canadian economy.

We are accustomed to the traditional exhortations that we are about to price ourselves out of our external markets, because of these wage increases. But the facts, and that's what is important, the facts have constantly proved that this is not, and has never been, the case. Our inflation rate here in Canada in recent years has been relatively low compared to most western industrialized countries, and we certainly have had no balance of payments problem. If anything, I would suggest that we have succeeded too well in our external trade and that is especially true from the viewpoint of our major trading partner, the United States.

I need hardly remind an audience of this nature of the confrontations Which took place between Canada and the former Secretary of the Treasury of the United States, who indicated as you will well recall in pretty emphatic terms that Canada was getting the better deal in its trade relations with his country.

I must say bluntly that there are those who, through prejudice, or because of a lack of understanding of how the economic processes work, blame labour, and especially organized labour, for causing inflation. In spite of all the evidence to the contrary, assembled by academic economists down through the years, the myth of labour as the "bad boy" in the inflationary spiral persists in the minds of all too many people even to this day.

But very recently, this myth was once again disproven, and this time by no less a body than the Prices and Incomes Commission. As. you all know, the Prices and Incomes Commission was established in June 1969, and the terms of reference that were given to it were "to inquire into and report upon the causes, processes and consequences of inflation and to inform those making current price and income decisions, the general public and the government, on how price stability may best be achieved. "

Three years later, the Commission released its report. Let me read to you what it had to say on the origins of recent Canadian inflation: It said this:

"There is substantial agreement that the relatively rapid inflation of prices and costs in Canada which began in the mid-1960's was initiated by a build-up of unusually strong demand pressure on the economy's existing productive capacity and manpower resources.

"The degree of tightness which developed in product and labor markets was, of course, much more pronounced in some areas of the economy than in others, and the demand pressures which caused this tightness were by no means entirely of domestic origin. The effects of expansionary fiscal and monetary policies in Canada in encouraging the growth of demand were reinforced., in areas such as exports and capital spending, by the spill-over effects of rising demand in the United States where the pace of economic recovery was also acquiring increasing momentum."

In the last few years, some degree of inflation has persisted even though there has not been undue pressure of demand on the economy's productive capacity. And again, this has resulted in many blaming labour. But the findings of that Prices and Incomes Commission must have been a great disappointment to such people.

Dr. John Young, the Chairman of the Commission, in a television interview following the release of the Commission's report, put it in capsule form when he said: "We do not attach particular significance to unions as a contributing force in inflation. "

I think that these are very significant words and could be well reflected on by many people who obviously had both a lack of understanding of the economic processes and of the Canadian Trade Union movement, particularly with respect to the wage demands to which I made reference.

There are in fact two basic causes of higher wage demands in recent years.

One is the "revolution of rising expectations", which means, in effect, that the working people of Canada, through their wage demands, are expressing their desire to share in the comparatively high standards of living which they see all around them. And I, personally, see nothing wrong in this. I see nothing wrong with the aspirations of workers and their families wanting to obtain incomes which would provide them with similar kinds of economic and social satisfactions as other occupational groups in society enjoy. I see nothing wrong with workers who have ambitions to improve the lot of their children, so that these children will not suffer from the lack of the educational and cultural advantages which they themselves experienced.

But I do see something wrong--I see something very wrong in the fact that children of wage-earners, even today, continue to remain a small minority in the colleges and universities of our nation and the reason for this to me is obvious. The average industrial worker's wage is still far, far below what is adequate for him to provide for his children's education.

I see something wrong, too, in that many of these children, lacking the opportunity for higher schooling, will go through life frustrated because they are not equipped with the necessary formal education to compete in a society where employers are increasingly demanding higher education.

I have cited briefly one basic cause of higher wage demands. The second major cause in my view consists of a response to an 'economic environment which is completely-and I wish to state this point without qualification-created by domestic government policies and external forces.

The inflation which was unleashed in the middle of the 1960's can be largely traced to the inept fiscal and erratic monetary policy pursued in the United States after its decision in July 1965 to escalate the Vietnam war. Because of the close interrelationships of our economy with that of the United States, it is not possible to isolate the effects of economic trends and policies from those in this country.

And furthermore, our own policies, and especially monetary policy, was every bit as erratic as that of the United States and the result was the creation of an inflationary North American economy.

It should not be necessary, but perhaps it is for me, to propound the fact that private parties as such do not, and cannot, of themselves create an inflationary environment, but they do respond to such an environment. That is the way in which our economic processes work. And unfortunately, it is all too evident that there is still a good deal of misunderstanding on what I regard as this elementary point.

An inflationary situation, like a deflationary situation, is the responsibility of government stabilization policies, at least to the extent that these policies can be effective in the context of external pressures. And wage settlements as such are highly sensitive, and have been always to general economic conditions, whether these conditions are inflationary or deflationary. There is an abundance of economic evidence, from the Prices and Incomes Commission itself, from the Economic Council of Canada, and a host of academic economists to substantiate this position that I express.

But I would like now if I may in my remaining time to turn to another subject which is obviously widely misunderstood. I am referring here to the use of the strike weapon in our collective bargaining process.

The fact is that the strike continues to be the most important source of union power, and that, without this legal right, the collective bargaining process would in effect become literally meaningless.

There are those who contend, and I am sure that many of them do so in good faith, that certain industrial disputes should be settled through compulsory arbitration. From their point of view, this would automatically avert nasty industrial strikes. But I find no difference between this kind of mentality and that of others who would try to convince us that parliamentary democracy is a pretty inefficient way of running the governmental processes of our nation.

They seem to believe that the mere passage of legislation that would enact compulsory arbitration to resolve differences between labour and management in key industries-whatever that may mean-would make a significant contribution to industrial peace.

And here again I must be blunt, and say that those who believe that industrial peace could be achieved by outlawing strikes are naive indeed. I say naive because they are seemingly unaware of what takes place in other countries which have already outlawed the right to strike.

In Australia, for example, a fellow member of our Commonwealth where there is no legal strike provided for under that country's legislation, the number of man-days lost to production through work stoppages for many many years has far exceeded anything that we have known in Canada. Also, and I think this is perhaps a more apt comparison in the totalitarian countries of Europe, in Span or the Eastern bloc countries, industrial violence has intermittently broken out in spite of tough state laws which in some instances make it a law against the state for workers to resort to strikes.

The evidence is irrefutable; industrial peace cannot be legislated or decreed from on high. The dissatisfaction of workers with the wages paid them and the conditions under which they must work will inevitably find an outlet by the withholding of their labour; irrespective of what any law may ever say.

And I should also like to remind you despite all popular opinion to the contrary that the right to strike in Canada is far from being an unrestricted one. Our federal and provincial laws, without exception, make it mandatory that a trade union must first go through a process of negotiation, mediation and conciliation before it has a right to strike. And once a collective agreement or contract has been negotiated, and most of those are now for periods of from two to three years, unions are prohibited from striking during the time that collective agreement is in effect. Furthermore, any grievances that workers working under those collective agreements may have with respect to the administration of them, must by law at all times, be settled by an arbitration procedure.

Those who advocate compulsory arbitration contend that strikes create economic havoc. But I want to point out that the official facts clearly repudiate this contention. For the year 1971, which is the last year, of course, for which we have official statistics for the moment, work stoppages in Canada accounted for a mere 0.17 of one per cent of man-days lost of the estimated total working time.

I can't refrain from mentioning that this contrasts sharply with the number of man-days lost during the same period as a result of unemployment. There were 48 times as many man-days lost and taken from our economy as a result of unemployment here in Canada during the year 1971. These figures to my mind provide a rough index to the very minor effect which strikes have had on our economy, in terms of lost production, compared to that greater amount lost as a result of unemployment.

But collective bargaining, basic as it is in explaining the existence and purposes of trade unions, is, I want to emphasize, not their sole function. Far far from it.

The Canadian labour movement has always been concerned with economic and social problems involving not only the interests of their own members but that of all Canadians and particularly those who have no effective voice for conveying their needs and aspirations to those in power. We are concerned about elderly citizens who have no option but to live on meagre pensions. We are concerned about the need to improve medicare for the general public. We are concerned about the needs of those who, in our affluent society, live in distressing poverty, in a nation which, by any economic measurement, is either the second or third wealthiest in the world.

As we have said time and again, there are no dues-paying union members among the sick, the disabled, the poor, nor among those unorganized workers who could qualify for union membership if they so decided. But this has never for one moment deterred us from advocating policies, and exerting whatever pressures we could on governments to give effect to such policies, in our endeavours to provide a better way of life for all these groups.

These then, gentlemen, are some of my views on the contemporary labour scene in Canada, and I want to again thank you most sincerely for giving me the opportunity to voice them here. I don't expect that all of you will agree with any one of these views, or that any one of you will agree with all of them, but I do hope you have found them interesting.

Mr. MacDonald was thanked on behalf of The Empire Club by Mr. E. B. Jolliffe, a Past President of the Club.

MR. JOLLIFFE:

Mr. President and gentlemen: In the cooling off period to which he referred, Mr. MacDonald has described with his usual logic and moderation his view of labour's role in our Canadian society and he has done so, I may say, more moderately than he has sometimes conveyed the views of labour to the Government of Canada at certain well known confrontations in a large committee room in the centre block of the Parliament Buildings.

I think in thanking him that we should remind ourselves of his position of leadership in the International Confederation of Free Trade Unions and it must be, I would suggest, gratifying to Canadians that one of our people should lead that international organization at a time like this, particularly because it constitutes a significant link between our own people and other people in a great many countries of importance to us, particularly in western Europe and in his efforts on behalf of that organization and establishing closer relations between ourselves and the people of western Europe in particular. I am sure that we all wish him success in the period which lies ahead.

On behalf of you, sir, and the Club, may I express our thanks to Mr. MacDonald for this speech that he has made here today.