OTTAWA - Is the Harper government fundamentally anti-labour?

The question arises anew after Labour Minister Lisa Raitt announced yet again Wednesday her intention to table back-to-work legislation hours after employees at CP Rail went on strike, as she did previously with the Air Canada and postal disputes.

But critics say the government's true colours are coming through more clearly and with a more systemic impact in a controversial budget bill they argue fundamentally changes the power balance between employers and employees — all to the detriment of workers.

One of the measures is so sneaky, says NDP MP Pat Martin, nobody seemed to notice the line buried deep in the 452-page Bill C-38 that simply states, "The Fair Wages and Hours of Labour Act is repealed," giving no explanation.

With those 10 words, Ottawa intends to wipe out a 1985 law compelling contractors bidding on federal contracts to pay "fair wages" and overtime.

"I would have missed it and I'm from that industry. It was number 68 of 70 bills that they changed," said Martin, a former journeyman carpenter and construction worker.

Martin notes that unlike most measures in the budget bill, there was no prior discussion of the measure or even a signal such a change was contemplated.

"It's a solution without a problem. The only conclusion I can come up with is that it's a war on labour and the left. It's what the Americans did with the right-to-work states and the end result is $8 or $9 an hour is now the average wage in places like North Carolina."

Along with the little-noticed provision, Bill C-38 calls for changes to immigration rules, the temporary foreign workers program and the employment insurance system — all with an eye to make it easier for firms to bring in workers with the skills they require and to reduce disincentives to work in Canada's domestic labour market. As well, the government intends to effectively raise the retirement age from 65 to 67 years through changes to Old Age Security starting in 2023.

Human Resources Minister Diane Finley is expected to announce details of the changes to the EI program on Thursday, establishing the types of jobs workers receiving benefits will no longer be allowed to refuse and possibly trimming benefits for repeat claimants.

In recent statements, government ministers have defended the proposed measures by citing "unprecedented" labour shortages in some sectors and regions of Canada, particularly Alberta and Saskatchewan, and the approaching demographic train wreck of retiring baby boomers.

Canadian Chamber of Commerce president Perrin Beatty believes labour shortages are already a big problem for employers. While he applauds the government's actions, he adds more still needs to be done.

"That's the number one issue for us this year," Beatty said from Vancouver, where he was continuing a series of round table talks on skills shortages.

"We have pockets of persistently high unemployment in this country at the same time as in other areas there's a desperate need for skills. In some cases it's a specific skill that is needed, in others, like Alberta and Saskatchewan, they are saying, 'We will take anybody who's willing to work.' "

That is hard to square with a national unemployment rate of 7.3 per cent, and new figures showing there are 5.8 unemployed workers for every vacancy. Officially, there were 1.37 million Canadians actively looking for work in April, and that doesn't count the hundreds of thousands of discouraged workers, involuntarily self-employed or part-timers wishing to be employed full-time.

Labour economist Erin Weir of the United Steelworkers says he has never bought the labour shortage argument, noting that in a market economy if that were the case wages would be increasing. Instead, they are barely keeping up with inflation.

It might be fair to point to a skills shortage in certain hot sports, he agrees, but the solution to that issue is training, not macro-economic measures designed to increase the labour pool generally.

To Canadian Labour Congress president Ken Georgetti, the measures add up to a decidedly pro-business agenda. And that's a shame, he said, because what the Canadian economy needs most is a strong middle class that can afford to pay down debt and start consuming.

"They seem to think that low wages and maximizing profits are more important than a good solid middle class in Canada," he said.

The government, of course, doesn't see it that way. In response to questions about EI changes recently, Finance Minister Jim Flaherty outlined what he sees as the major challenge of workers facing the country, maybe not this year but in the next decade and beyond.

"We are going to have significant labour shortages in this country," he said. "That means we are going to have to encourage more persons with disabilities to work, more seniors to work, more aboriginal people to work, including young people. We need to get rid of disincentives in the employment insurance system to people joining the work force."

The statement could well apply to all the measures dealing with workers in the budget bill, not just EI.

TD Bank economist Craig Alexander says the approach is typical of how the Harper government likes to operate — incremental changes that collectively carry a big wallop.

"They often tackle things not by announcing a bold new national strategy but by identifying a priority and then they pick away at it," he said.

If that's the case, the government may be just starting the process of altering the labour market landscape in Canada. The changes announced so far are too modest to make a big splash, Alexander said.

"I'm really not worried about modest changes in the labour supply acting as a major constraint on wages, because over the next 10, 20 years demographics will win out," he explained. "Businesses are still going to be faced with shortages and they will have to find ways of keeping workers in the labour force longer."

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  • Here's a look at some of the measures in the bill's 400-plus pages. It's not an exhaustive list, so be warned: there will be another budget bill in the fall.<br><br><em>With files from CBC</em>. (CP)


    The government wants a "one project, one review" environmental assessment system, so it is repealing the Canadian Environmental Assessment Act and replacing it with the Canadian Environmental Assessment Act, 2012. It allows the federal government to designate an assessment to another jurisdiction, such as a province, and for another jurisdiction's assessment to substitute for a federal one. It sets out time limits for the completion of reviews and the minister will have the power to shut down a review panel if he thinks it won't finish on time.


    Employment insurance claimants are required to demonstrate they are actively seeking "suitable work" in order to receive payments. C-38 removes definitions of "suitable work" from the Employment Insurance Act and gives the federal cabinet the power to create new regulations about what constitutes suitable work and reasonable efforts to find work. The budget bill gives no details about what the new criteria will be. It also makes changes to how payments are calculated, to pay claimants based on their "best 14 weeks" of employment.


    Auditor General Michael Ferguson will no longer be required to annually audit several agencies, including the Social Sciences and Humanities Research Council, the Natural Sciences and Engineering Research Council, the Northern Pipeline Agency and the Canadian Polar Commission. The agencies must submit annual financial reports to the minister instead. Finance Minister Jim Flaherty says this move was made at the request of the auditor general.


    C-38 proposes amendments to the Income Tax Act's rules around political activities of charities. Charities aren't supposed to spend more than 10 per cent of their budgets on political advocacy. Under C-38, donating to a charity could be considered a political activity if the donation can "reasonably be considered" to be for the sole purpose of supporting political activities. So, if one charity gives money to another charity for political purposes, it would count toward the donor's 10 per cent limit, not just the recipient's total. It also gives the minister of national revenue the power to withhold tax receipts from a charity or association if it devotes resources to political activities in excess of the limits.


    Among the amendments to the Immigration and Refugee Protection Act is a move to wipe out a backlog of 280,000 applications under the Federal Skilled Worker Program. Applications made before 2008 would be deleted and the application fee refunded.


    Legislation currently protects fish habitats that are defined as "spawning grounds and nursery, rearing, food supply and migration areas on which fish depend directly or indirectly in order to carry out their life processes." Bill C-38 would instead protect fish based on their use: bodies of water that support commercial, recreational and aboriginal fisheries or fish that support such fisheries. It rewrites the Fisheries Act's rules against work that can cause the destruction of a fish habitat. The bill also would allow the federal government to transfer Fisheries Act responsibilities to a province with equivalent laws.


    There is some good tax news in the budget bill. It expands the list of goods and services free of GST and HST, adding some prescription drugs and more medical devices to currently exempt items like false teeth and hearing aids. The bill would also allow literacy organizations to claim a GST rebate or the federal component of HST paid on books they give away for free.


    The bill increases Gov. Gen. David Johnston's salary from $137,500 to $270,602 starting on Jan.1, 2013 -- but he's no longer exempt from paying income tax. His salary was hiked to offset the taxman's bite.


    The budget bill creates a new law to implement the Framework Agreement on Integrated Cross-Border Law Enforcement Operations that was signed between Canada and the United States in 2009. It applies to joint operations between authorities in both countries on the seas.


    The budget bill scraps the office of the inspector general at the Canadian Security Intelligence Service. The office is meant to be the public safety minister's eyes and ears overseeing CSIS. It also makes other changes on how CSIS reports to the minister.


    Bill C-38 shuts down several government-funded groups and agencies, including the National Council of Welfare, the Public Appointments Commission, Rights and Democracy, the National Roundtable on the Environment and the Economy, the Canadian Artists and Producers Professional Relations Tribunal and Assisted Human Reproduction Canada.


    It creates a new Social Security Tribunal to hear appeals of decisions made on Old Age Security, employment insurance and other benefit programs, and creates the new Shared Services Canada Department.


    The government is phasing out the penny but is changing the law so pennies can still be used as legal tender even though they are being removed from circulation. The current law says a coin that's been "called in" is not legal tender.


    The government wants to phase out the plastic card that displays your social insurance number, and Bill C-38 makes the necessary changes to existing laws so it is no longer required. Canadians will still have SINs, they just won't be carried on a plastic card.


    The age of eligibility for OAS will rise gradually to 67 from 65 starting in 2023. C-38 lays out a complicated chart showing how that change will be phased in.