Columns/Blogs Features Legislation
Opinion: Wage fixing, no poaching crackdown set to begin – yet Canada is comfortable with monopolies

On June 23, two important changes to the Competition Act come into effect. The amendments prohibit wage-fixing agreements between employers, as well as “no-poaching” agreements that entail not soliciting or hiring each other’s employees. The term “wage-fixing” encompasses efforts by employers to set, maintain, and decrease salaries and wages, as well as other terms and conditions of employment.

As per the guidelines, these “other terms and conditions” include the responsibilities, benefits, and policies associated with a job, such as job descriptions, working hours, and places of work. Also, it is important to note that the term “employer” includes directors, officers, and certain employees, such as HR professionals.

The challenge is that agreements between employers on wage-fixing and poaching are not likely to be put in writing, and we can’t expect to see pictures of festive signing ceremonies on social media and company websites. These typically exist in the form of an unwritten arrangement or understanding, which is unlikely to show up in meeting minutes and executive summaries. And how do you prove the existence of an understanding, or a “meeting of the minds”?

Enforcement of the Competition Act is the prerogative of the Competition Bureau, which aims to facilitate competition among employers and labour markets. The thinking is that increased competition leads to lower prices, higher wages, better benefits, more job opportunities, innovation, and a more effective allocation of resources. Which is likely true. As per the Bureau’s mission statement, this would benefit Canadian consumers and businesses. Which I believe as well.

Why does Canada have a Competition Act and a Competition Bureau? The irony here is that the major stakeholders in this country and its government are quite comfortable with monopolies and oligarchies. The Canadian market is famously and jealously protected from external and internal market impulses. Why would the Bureau be cracking down on wage-fixing and employers’ jockeying for talent, while ignoring various forms of market manipulation that drain the bank accounts of Canadians 24/7?

Think of the prices at the pump (go stand on any street corner with more than one gas station), the supermarket sector, the dairy sector, and the communication sector. When Verizon tried to come to Canada there were demonstrations in the street, as vested interests (with Bell, Rogers, and Telus sharing 90 percent of the market) are quite happy to leave things just the way they are. The Canadian consumer ends up with inflated prices and so-so service.

Earlier this month, the Organization for Economic Co-operation and Development (OECD) called Canada’s productivity “weak” and urged us strengthen productivity, so that we can boost living standards and get back in line with leading OECD economies.

We hear a lot of talk about innovation, but the reality is that key stakeholders in the Canadian economy (such as governments, the main political parties, major corporate players, unions, and self-regulated professions) are typically happy with the status quo.

Tariffs and quota act as de facto walls that protect the Canadian market, which means that companies sheltered by these walls don’t have to perform, compete, or innovate. The result is that the Canadian consumer pays higher prices than necessary for many of life’s basic needs.

Evert Akkerman is an HR professional based out of Newmarket, Ont., founder of XNL HR, and partner at executive search firm Crossings People. He can be reached at info@xnlhr.com and evert.akkerman@crossings-people.com.