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Comment: Sending jobs offshore hurts Canadian workers

Corporate Canada seems increasingly comfortable profiting from government regulations and Canadian consumers with little concern for this country’s workers.

Corporate Canada seems increasingly comfortable profiting from government regulations and Canadian consumers with little concern for this country’s workers.

As recently reported, the Royal Bank of Canada has brought in 20 workers from India to learn part of the bank’s information-technology system. Once trained, these workers will help relocate 45 current positions to an “RBC offshore development centre” in Bangalore.

Stung by the bad publicity, RBC has promised to find new jobs for the 45 displaced Canadian IT employees, and federal government officials have said they are investigating whether the Indian workers’ temporary work visas were granted appropriately.

While politicians and the media focus on the temporary foreign worker program’s role in permanently sending these jobs offshore, the bigger story is the ease with which highly profitable Canadian companies outsource work to low-wage countries. Canada’s telecommunications sector, for example, is bleeding jobs, and companies moving jobs to low-wage jurisdictions is a major cause.

Most Canadian telecom operators have call centres abroad. Videotron flows Canadian callers through Egypt, Mobilicity through Nicaragua, Wind Mobile through Egypt and the Philippines, and Bell has thousands of employees in India and the Philippines. Telus operates call centres in El Salvador, Las Vegas and Guatemala, and employs 8,500 Filipinos, mostly to service Canadian customer calls and business-process services.

In recent years, thousands of jobs have been sent offshore, contributing to a major decline in Canadian telecom employment. At about 114,000 people, the telecommunications workforce is down 10 per cent since the early 1990s. Despite growing usage, telecommunications employment accounted for 1.15 per cent of all industrial employment in 1991 and only 0.78 per cent of the workforce in 2009.

There are various downsides to offshoring call-centre jobs. Agents working out of a different country often lack the cultural references or language skills to provide high-quality service, and sending personal and business phone records across borders makes this sensitive information more vulnerable.

In addition to service and privacy issues, sending jobs offshore means fewer Canadians with taxable income. It can also increase Employment Insurance payouts as well as social assistance and retraining costs.

The biggest downside to sending jobs offshore is the loss of opportunities for unemployed Canadians. According to Statistics Canada, the unemployment rate among 15 to 24 year-olds is 14 per cent. The “real” unemployment rate for young people is closer to 20 per cent, as youth participation in the labour force has declined by about 180,000 since September 2008, which indicates that many who have been unable to work have stopped looking.

Call-centre jobs could easily be located in a number of communities across the country plagued by stubbornly high unemployment rates such as Port Alberni or Windsor, Ont.

Telecom providers are not moving work elsewhere out of necessity. According to the Conference Board of Canada, the telecom sector has been bringing in about $7 billion annually in profit over the past five years.

These companies have the money to hire Canadians at a fair wage, but they prefer to add to their profit margin by sending jobs offshore. Telus pays its entry-level workers in the Philippines between $278 and $348 a month, which is less than a fifth of the full-time minimum wage in Ontario.

Additionally, employment regulations in these countries are generally weak and the right to collective bargaining flimsy at best.

The government could easily dissuade these practices among telecom firms. The spectrum telecom companies use is public property, and in exchange for these airwaves, they could be required to commit to Canadian workers.

Later this year, Industry Canada will auction off highly coveted 700 MHz spectrum, giving the Conservatives a prime opportunity to set job guidelines for companies wanting access to public airwaves.

If a company benefits from government policy and profits from Canadian consumers, it should commit to this country’s workers.

Dave Coles is president of the Communications, Energy and Paperworkers Union of Canada.