As Canadian consumers continue to pay more for imported goods, and as domestic companies and multinationals seek to skirt anti-trust laws, the construction industry is grappling with the impact of outsourcing its work to overseas jurisdictions.
As the industry grapples with the fallout from the Panama Papers, a leaked cache of 1.5 million leaked documents, Canadian companies and their domestic employees are scrambling to secure the best possible deal for their workers.
“We are constantly looking at how we can get to a point where our domestic workforce is in a position where they can afford to hire people from overseas and then move them to a Canadian facility to do the job,” said John Jansen, president of the Canadian Association of Machinists.
“And we have to make sure that we are getting the best return for the investment we are making in Canada.”
A major challenge for companies such as Jansen’s union, the Canadian Machinist’s Federation, is that Canadian labour laws don’t apply to foreign workers.
That means a company is only allowed to employ workers from a country if they can prove that their employees are Canadian.
In the case of the Panama leaks, there were allegations that the company was paying foreign workers to work on projects in Canada.
The Panama Papers revealed that in 2017, an engineering firm, J&H Construction, paid foreign workers, including some from China, to work as labourers for its construction projects in Panama.
The Panama Papers also showed that some of those workers had worked for companies owned by a former British prime minister.
In 2018, the union sued J&P Construction and three of its former employees, alleging that the firm was paying them less than $US2,000 a month to work in Canada, as required under Canadian labour law.
Jansen said the labour issues are more complicated for foreign workers because they are not covered under the same laws that Canadian workers are.
“We have to look at what the laws are, what our legal rights are,” Jansen said.
“In Canada, you can’t go out and do that, but you have to be able to prove you are Canadian.”
In a statement to the Star, Jansen called on the Canadian government to clarify its policies on outsourcing, which could open the door for foreign firms to claim unfair labour practices.
For example, the federal government could require foreign contractors to provide their workers with proper identification documents to prove they are Canadian and to prove that they are entitled to social assistance.
The same could be done for Canadian workers, Jansen said.
The Canada Labour Code states that any foreign contractor who pays a foreign worker less than the required minimum wage or salary must give the worker a notice and give the employee a chance to raise the issue with their employer.
If the worker does not receive a response, the company must give them another opportunity to raise concerns.
In response to the Panama revelations, the Trudeau government has proposed legislation that would require foreign workers who are paid less than their legal minimum wage to pay back the difference in wages.
Jansen’s concerns have been echoed by the Canadian Construction Council, a trade union representing construction companies in Canada that represents thousands of employees.
CPC president Robert Mavro, who is also the vice president of external affairs for the Canadian Federation of Independent Businesses, said the issue of foreign workers being paid less is not new.
Foreign workers are paid $US20,000 per month for their labour services in Canada and that is covered under Canada’s minimum wage law, Mavrot said.
That would be less than what the average Canadian worker is earning.
“I think that’s a good thing to have in Canada because you don’t want to be paying the minimum wage in a country that is less than that,” he said.
“There are things we can do to ensure that workers are treated fairly.”
While the issue has gained national attention, there are other problems for Canadian companies facing outsourcing litigation.
When Jansen and others in the construction trade union are fighting for better compensation, they are also struggling to find a lawyer to defend them in court.
And there are many other obstacles to a firm’s ability to navigate a legal challenge.
For example in Canada the federal anti-corruption watchdog, the Office of the Conflict of Interest and Ethics Commissioner (OICO), can issue a warning to an individual if the firm’s actions raise concerns about conflict of interest, including those relating to a foreign national.
In a letter, the OICO warned that the use of offshore companies is potentially a conflict of interests, and that they could undermine the office’s efforts to fight corruption.
But the letter was never sent.
Instead, Jamsons lawyers, including a lawyer from the University of Toronto’s law school, spent months trying to get OICO to issue a final warning.
OICO has never made any such ruling.
Meanwhile, Jaksons lawsuit is being defended by