Canadian Telecom Industry Rocked by Deregulation, Competition, Mergers, Technology

Unrest is shaking the Canadian telecommunications industry from Vancouver Island to Newfoundland, as management presides over sweeping changes in the industry.

An unprecedented combination of deregulation, increased competition, merger mania, and the advent of new technologies has placed enormous pressure on corporations operating in the sector. As usual, the companies have responded by taking it out on their workforces. Major disputes have resulted.

At Telus, which serves customers mainly in Alberta and British Columbia, the company and 10,000 members of the Telecommunications Workers Union (TWU) have been locked in stalemated negotiations for years.

Meanwhile 4,300 members of the Communications, Energy and Paperworkers union are involved in a protracted strike at Aliant Telecom Inc. in the Maritimes. In Ontario and Quebec, 7,500 union members are locked in testy contract talks with Bell Canada; pensions and job security are the key issues there. The news is that CEP members have rejected Bell’s contract offer, putting them in a legal strike position.


Upheaval in the industry began when Canada’s long distance telephone service was deregulated, resulting in the loss of thousands of jobs during the 1990s. Since then, nearly every aspect of the business has been exposed to the pressure of competition.

When the companies lost their long distance monopolies in the ’90s, they compensated by offering new services like wireless and the Internet. Today, however, revenues from other parts of the business, including local phone service, are dwindling.

Revenues from long distance service, which generated $5 billion Cdn in 2002, are expected to slide toward zero as both incumbent companies and their competitors use new Internet protocol technology to provide long distance and other services.

Under Canada’s old regulatory system, companies were required to adhere to stringent service standards. With the advent of deregulation and competition, oversight of service quality has slackened. Without the regulator breathing down companies’ necks, forcing them to maintain high-quality service, corporate cost-cutters have attempted to gut the workforces that provided this service.


The specific demands vary, but management is now fixated on cutting costs by reducing workforces, eliminating restrictive contract language, and reducing benefits.

Not surprisingly, there is a direct link between employment levels and service quality. It takes significant numbers of people on the payroll to provide high-quality service. This puts Canada’s telecom unions at odds with corporate employers.



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The unions are trying to prevent the degradation of service by resisting staffing cuts, while the companies are trying to reduce their costs by reducing staff, regardless of the effect this has on service.

In an environment dominated by radically new technologies and the ideology of deregulation, management is holding most of the cards. Union strategies that worked well in the past are not having the desired effect now.


At Aliant, the CEP is bargaining with a new employer formed out of the 1999 merger of four provincial phone companies. When the four different companies existed, their workforces were governed by nine collective agreements. The last of these expired at the end of 2001. The terms of CEP’s new Aliant collective agreement will create a framework which will govern the company’s workforce for years to come.

No talks have been held since the strike started. Aliant’s last offer was soundly rejected before workers walked off the job.

Similar tensions exist at Telus, which was formed in 1999 by the merger of provincially-based companies in British Columbia and Alberta. From the outset of negotiations in 2000, the new company has demanded that the TWU negotiate a new contract from scratch. This would mean abandoning a collective agreement that contains very strong contracting-out and jurisdiction language.

A strike nearly erupted in early February, when TWU members voted more than 86 percent in favor of strike action. Due to the company’s unprecedented interference in the bargaining process, however, the Canadian Industrial Relations Board (CIRB) ordered Telus to offer binding arbitration to the union.

The company has asked the board to reconsider its decision and has asked the Federal Court to overturn the CIRB decision if it doesn’t get what it wants from the board.

Both Telus and Aliant appear determined to radically overhaul their labor contracts. They want to expand the scope of workers’ jobs and to schedule evening and weekend work. Unionized telephone workers have become accustomed to good pay, regular hours, and job security. In the current environment, however, they are hoping to resist outsourcing and maintain the viability of their pensions.


To date, telecom unions have not come to grips with what the companies are doing. Telecom unions in Canada and elsewhere desperately need to generate counter-strategies to thwart this unprecedented corporate assault.

Given all the cards that the companies are holding, this won’t be easy. But an effective counter-strategy could include overtime bans and other workplace-based actions. It could entail political interventions to confront management-driven service degradation, implicitly emphasizing the need for higher staffing levels to deliver high-quality service.

If successful, all this could generate an understanding among the public that action is required to defend their interest in affordable, high-quality communications services.