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Theo Argitis: Poilievre’s unpredictable flirtation with labour

Commentary

Corporate Canada enters 2024 in an anxious mood about the federal political landscape.

Given where the polls are, executives are naturally beginning to map out—as best they can—what federal regime change would mean for their business.

Some may want a new government, and some may not. But everyone has a fiduciary duty to prepare.

The business community’s relationship with the Trudeau government has always been testy, and there’s fatigue with its practice of layering on new regulations on top of old—from climate to labour. There’s also worry about tax creep, with federal revenue from corporate income hovering at the highest since the early 1970s as a share of GDP.

But the Liberals have delivered big time on key demands of corporate Canada—child care, looser immigration and subsidies for green investment.

Everyone knows there won’t be much love lost between Bay Street and Poilievre, even if some executives would welcome a less high-handed and overbearing approach to government. 

The focus on affordability will be a challenge and there are long memories in C-suites of Stephen Harper’s emphasis on consumer issues. No one is expecting a honeymoon.

And now, there’s a new wrinkle: Poilievre’s flirtation with organized labour. 

It was a difficult year on the labour front for business in 2023, particularly for goods-producing sectors that are already in the middle of a technical recession. (In aggregate the economy has only stalled thanks to growing activity for services.)

Tough talks

Companies are facing emboldened unions and wage negotiations have been tough. At the same time, businesses want to be accommodating to their workforce for fear of losing experienced and skilled labourers who continue to be in short supply, making employers more open to concessions.

Since May, annual wage settlements have averaged 4.3 percent, more than double the average over the past 30 years.

The number of person days not worked due to stoppages hit 2.2 million in the first nine months of 2023—putting us on track for the worst year of labour disruptions in Canada since 2005. They called it the ‘summer of strikes’ for a reason.

This is the broader economic context through which business is looking at Poilievre’s overtures to labour. 

These pressures, meanwhile, are surfacing at a time when employers are dealing with a slew of new labour-friendly legislation that is weighing on industry.

This includes, for example, the requirement to provide 10 days of paid sick leave for all federally regulated workers, which came into effect a year ago.

The latest initiative is the government’s bill to ban replacement workers during contract disputes, currently moving through the House of Commons.

Business groups have warned the bill will increase the length and number of labour disputes in the country. Poilievre has been silent on the legislation so far, saying he needs to study it first before taking a position.

Being frank

However, he wants everyone to know he blames inflation (and Trudeau) for causing the labour unrest and stoking wage demands.

“Frankly I don’t blame workers,” he said at a press conference last month.

It’s not exactly comforting to a corporate Canada that is facing a serious challenge.

A disconnect between wages and productivity is emerging as one of the biggest risks to the nation’s economy going into 2024.  

The latest quarterly data on productivity and labour costs were released on December 6th, and the numbers show a hot mess.

Labour productivity continued its downward trajectory in the third quarter. It was down 0.8 percent during the three-month period and has fallen six straight quarters and 12 out of the last 13.

Falling productivity coupled with strong wage gains is a deleterious cocktail. It means costs to produce stuff are surging. 

For example, the same data shows unit labour costs are up 6.1 percent from a year ago—which would have been the fastest in three decades in the pre-pandemic era. It’s also above the four-percent pace of unit labour cost increases in the U.S., adding a competitive headwind for our businesses.

Higher costs mean inflationary pressures will persist, and our global competitiveness will suffer.

If Poilievre wants to bring down inflation without leaning against wage gains, he’ll need to figure out a solution to Canada’s productivity morass. Good luck with that.

Israel must ‘hit back as hard as it can’: David Frum on the Israel-Hamas conflict, 100 days in

Commentary

It has now been 100 days since the surprise terrorist attack on Israel by Hamas. Since October 7th, Israel has launched a military operation into Gaza that remains ongoing, and risks of wider regional escalation grow.

The Hub’s editor-at-large Sean Speer spoke with leading author, journalist, and thinker David Frum on October 7th to get his immediate reaction to the unfolding events. Here, they return to their conversation to discuss the state of the ongoing conflict, how the world’s response has evolved since the initial attack, and what we can expect to happen over the next 100 days.

SEAN SPEER: When we exchanged the day of Hamas’s attack, you said that Israel’s allies should permit it to execute a military campaign to essentially neutralize Hamas as a threat. After 100 days, how would you assess the response from the United States, Europe, and others? Are they following your advice?

DAVID FRUM: The Biden administration has shown magnificent solidarity with Israel. In the past, the U.S. always imposed strict time limits upon Israeli responses to Palestinian terrorist atrocities. This time, the Biden administration has allowed Israel the scope and time it needed, providing important assistance along the way. Unfortunately, Congress—and especially the Republican majority in the House of Representatives—has not shown the same solidarity. House Republicans have blockaded a defence supplemental that would have provided aid to Ukraine and Israel, plus $14 billion for border security. Some are blockading under the influence of Donald Trump’s pro-Russia, anti-Ukraine animus. Others are just playing crass politics.

The attitude of the European Union and the United Kingdom has been nearly equally impressive. High German officials have visited Israel and pledged their support for Israel’s right to defend itself. Fabricated anti-Israel TikTok propaganda videos may influence some young people. Mercifully, they exert much less influence upon major democratic governments.

The bad news is the problem of security against violent attacks and intimidation by antisemitic mobs and individuals inside Western countries. In the U.S., U.K., and EU, this threat is real, worsening, and—to date—poorly policed.

SEAN SPEER: What do you think about Canada’s response over the past 100 days? To what extent is Canada offside its key allies in terms of supporting Israel’s right to defend itself and what do you think explains that divergence?

DAVID FRUM: Canada under the leadership of Justin Trudeau has steered a middle course between doing the right thing and kowtowing to terrorists. The government of Canada has condemned both terrorism against Israel and Israel’s self-defence against terrorism.

When Canadian Jewish populations are harassed or fire-bombed or shot at, the government seems incapable of straightforward statements of solidarity with those who have been harassed, fire-bombed, and shot at. The first priority of Canadian police forces is not to serve and protect populations but to minimize trouble and inconvenience for themselves.

The government’s stated motive is to oppose both antisemitism and Islamophobia. Ironically, the unwillingness to act against bad acts by anti-Israel actors is actually stoking anti-Muslim feeling. Recent polls show that the number of Canadians who regard Islam as a bad influence on Canadian society has jumped over the past 24 months, as many Canadians blame all Muslims for the outrageous actions of a very few.

This government’s real motive appears, as usual, to be panicky dread of bad poll numbers—and appeasement of its NDP coalition partners who could at any time bring this prime minister’s career to an end.

SEAN SPEER: At this stage, how do you think Israel should define success for its military campaign? And do you worry at all that there is a gap growing between how Israel defines it and how the U.S. and other allies define it?

DAVID FRUM: May I object to this concept of “defining success” as applied to existential fights like those of Israel against Hamas and Ukraine against Russia? The concept is not always useless. When the United States and partners strike the Iranian-backed pirates in the Red Sea, then in that case the concept makes sense. Did the piracy stop? Success. Did it continue? Failure.

But when a democratic society is attacked by an aggressor bent on mass destruction, it just has to fight back as best it can. Israel cannot restore life to its murdered citizens, cannot uninflect the trauma of victims of sexual violence. There’s no “success” available here. All it can do is hit back as hard as it can, as long as it can, to restore deterrence as best it can.

SEAN SPEER: What in your mind are the broad contours of a post-conflict plan for Gaza? What is the role of Israel, the Arab states, and the broader international community? How do we create the conditions for greater prosperity and security in Gaza?

DAVID FRUM: I have proposed ideas on Twitter, but here I want to sound a different note in response to the final sentence of this question. Asking what “we” can do in Gaza is exactly the question that has brought the region and the world to this tragic impasse. What are the Gazans going to do? How are they going to shift from a project of hate and destruction to a project of nation-building and reconciliation with neighbours? Maybe it’s time to cease treating Gazans as the world’s special-education class and to put the onus for self-improvement upon the Gazans themselves?

SEAN SPEER: What should we look for over the next 100 days to judge the progress towards a sustainable resolution to the conflict and a path forward for Israelis and Palestinians?

DAVID FRUM: Milestones ahead: Release or liberation of Israeli hostages. Death or exile of the hostage-takers. Cessation of aggression not only against Israel from Gaza and Hezbollah-held Lebanon but also against world shipping by Iranian proxies. Accelerating flows of humanitarian aid to civilian populations in Gaza.

Beyond those immediate items, it is past time to resume reinvigorating better governance inside the Palestinian Authority on the West Bank—and then restoring PA police authority inside Gaza. Any final settlement between Israel and the Palestinians has been set back a long time by Hamas’s horrifying aggression. But in the end, Israel and the PA have to be partners in building better lives for all the people who live in the ancient land so sacred to three great religions.