Buried in the bowels of the federal Omnibus Bill is a significant change that slipped by virtually unnoticed. The Bill repeals the Fair Wages and Hours of Labour Act, which compels contractors bidding on federal contracts to pay fair wages and overtime.
This move goes in the opposite direction of good social policy and counters the advances that governments throughout the world are making in terms of their purchasing policy.
Caledon recently published a paper on procurement which argues that governments can advance important social purposes in several ways, including their hiring, investment and purchasing practices. Governments are major purchasers of goods and services, and they can support social goals, such as adequate wages and payment for overtime, through the power of their purchase.
In addition to direct purchase, governments can use their procurement power to require the attainment of broader ‘community benefits.’ The benefits of a given contract should be felt more broadly throughout the community rather than just by the firm or organization that derives direct monetary gains in the form of cash payments.
In terms of employment, for instance, community benefits can mean that the winning firm offers job opportunities to designated groups – such as persons with disabilities, Aboriginal youth, new Canadians or young offenders. The company would promise to hire, in fulfillment of the contract, a certain number or percentage of individuals who are typically underrepresented in the labour market.
Community benefits can also involve the training of prospective employees. This form of skills development helps raise awareness among employers and community members, more generally, about the value of people who often get overlooked as potential workers.
Community benefits can involve the entire supply chain. Successful bidders may be required to import products that explicitly avoid the use of child labour or that are made with environmentally-friendly supplies.
The repeal of the Fair Wages and Hours of Labour Act removes any wage protections that were in place for workers hired by companies supplying the federal government. The ominous bill is just that.