Labour Law and Jobs: A Tale of Two Provinces

Ontario Conservative Leader Tim Hudak claims that union busting right to work laws would create jobs in hard hit industrial Ontario.

I have already noted that there is no evidence that Right to Work states in the US do better than other US states in terms of attracting and retaining manufacturing jobs.

A glance closer to home also suggests that relatively union friendly labour laws do not  come at the cost of jobs.

Ontario and Quebec have traditionally dominated industrial production in Canada, and have fairly distinct labour relations regimes.  The unionization rate in manufacturing in Quebec in 2010 was 37.4%, almost double the 19.8% unionization rate in manufacturing in Ontario. Moreover, the manufacturing unionization rate in Quebec is almost unchanged from 2000 (when it stood at 41.7%) while the rate has fallen sharply, from 31.1%,  in Ontario since 2000.

Between 2000 and 2010, Ontario lost 301,000 or 28.9% of the province’s manufacturing jobs. Meanwhile, Quebec lost 120,000 or 19.9% of its manufacturing jobs.

So, Quebec has a much more highly unionized manufacturing sector than Ontario, has become relatively more highly unionized, and yet has experienced relatively fewer manufacturing job losses.

Of course, there are structural differences between manufacturing in Quebec and Ontario in terms of the mix of  sectors. But they both produce for the national and US market and share the same exchange rate. The big factor behind job losses in both provinces was the overvalued dollar and Canada’s falling share of the US market. In that context, Quebec does not seem to have paid much of a price for its higher unionization rate.