Canadian HR Reporter

CANADIAN HR REPORTER NOVEMBER 2018 2 NEWS Minimum wage changes With a new government in Ontario freezing minimum wage at $14, what does this mean for employers and payroll departments going forward? We talk to Steven Van Alstine of the Canadian Payroll Association. With or without weed? Some employers are banning cannabis use outside of work Can employer branding be discriminatory? Recruitment messaging may be turning off diverse candidates Amazon gender-diversity fail shows limits of tech Most programmers in Silicon Valley are men, so they may write their own preconceived notions into code — unwittingly or not Automated cars could kill wide range of jobs: Government More than 500,000 jobs are at risk, including truck drivers, subway operators, taxi drivers Few workers expect employers to allow use of cannabis before, during work: Survey But 14 per cent of managers plan to indulge during work hours BLOGS BRIEFS NEWS FEATURED VIDEO BLOGS BRIEFS NEWS FEATURED VIDEO BLOGS BRIEFS NEWS FEATURED VIDEO Recent videos, stories and blogs posted on www.hrreporter.com. Check the website daily for updates from Canada and around the world. USMCA deal gives employers renewed certainty: Experts Refreshed North American trade agreement establishes framework for interactions on investment, labour mobility BY MARCEL VANDER WIER MANY employers across Cana- da are probably breathing a sigh of relief now that a new North American trade deal has been signed with the United States and Mexico. Called the United States- Mexico-Canada Agreement (USMCA), the pact refreshes the North American Free Trade Agreement (NAFTA) from 1994 — a deal which underpins $1.5 trillion in trade between the three countries, according to media reports. e agreement-in-principle is "good for Canada, good for Cana- dian businesses and, most impor- tantly, good for Canadian work- ers and their families," said Prime Minister Justin Trudeau, shortly after the agreement was reached on Sept. 30. "When this improved agree- ment is implemented, North American trade will be preserved and modernized for the 21st cen- tury — just as we set out to do." Renegotiating NAFTA was a major plank in U.S. President Donald Trump's electoral cam- paign and the new deal aims to bring more jobs into the U.S., with Canada and Mexico accept- ing more restrictive commerce arrangements with their main ex- port partner, according to media reports. Each of the involved country's legislatures will need to approve the agreement before USMCA takes effect. Once approved, the revised trade deal is expected to come into effect as of 2020, ac- cording to media reports. News of the agreement-in- principle is a major relief for em- ployers across Canada, according to Pedro Antunes, executive di- rector of economic outlook and analysis at the Conference Board of Canada in Ottawa. "Whether or not it's the best deal, or the perfect deal… gener- ally what it does is alleviate all of this uncertainty around whether we were going to have access to the U.S. consumer and the U.S. market in the near future," he said. Confidence boost Regardless of perceived winners and losers, a trade deal of this magnitude is necessary for the Canadian economy to continue growing, said Mark Agnew, direc- tor of international policy at the Canadian Chamber of Commerce in Ottawa. "Does it meet all the objectives that we set up a year ago when we started this process? No. But given the world in which we live in with Donald Trump, it's a good deal. And it's a necessary one for us to have." Canadian employers have gen- erally reacted positively to the re- freshed agreement, said Agnew. "Preserving the status quo, we think, is a good thing to have," he said. "It at least now gives that cer- tainty to Canadian businesses that we haven't really had the last several months when the nego- tiations were kind of teetering for a bit." Uncertainty is the cause of much difficulty when it comes to business investment or supply chain decisions, said Agnew. "In the circumstances, it's a necessary deal to have because we need that certainty," he said. "We've had about a year of ne- gotiations, which is a pretty break- neck pace for an agreement of this size. And given the sort of unique way that this White House runs itself, shall we say, on trade issues, there was a heightened degree of uncertainty about what the final outcome was going to be." e negotiations surrounding the North American trade deal were the cause of much uncer- tainty in the Canadian economy and labour market over the past 14 months, said Parisa Mahboubi, senior policy analyst at the C.D. Howe Institute in Toronto. If nothing else, the USMCA provides certainty in determining how business can interact with the U.S. and Mexico on trade, labour mobility and the like, she said. "Coming to a conclusion after months of negotiation? It's a good thing. It's going to establish the market," said Mahboubi. e threat of tariffs from the U.S. on many Canadian-made products was very real — U.S. tariffs on steel and aluminum still remain in place — as was the pos- sibility Canada could be left out of the trade deal altogether, said Antunes. "e threat that NAFTA would be dissolved or could be dis- solved… (in favour of a) bilateral trade deal with Mexico created much anxiety," he said. "Imagine the uncertainty that this generates — not only over the past year-and-a-half or two years, but for the next while." USMCA will alleviate that un- certainty and bring investment back into Canada, according to Antunes. It makes North America more competitive on a global scale, and ensures that Canadian busi- nesses relying on export have ac- cess to the U.S. market. Canada is largely an export nation, and international markets are crucial in terms of driving the domestic economy, he said. "Exports of goods does tend to have a big impact, big repercus- sions through the supply chain — even in terms of exports of ser- vices, and other components." And while the USMCA may have dealt farmers a blow in terms of supply management, in the short-term, they will receive gov- ernment support, said Mahboubi. In the long-term, they will be expected to cope with the chang- es, just as other countries have in the past, she said. Changes for employers Canadian employers will endure slight changes under the revised deal, said Agnew. "ere are things in there which have changed from the status quo." For example, the USMCA in- cludes tweaks to intellectual prop- erty provisions around biologics and extending the length of pat- ent terms — a beneficial boost to innovative pharmaceutical com- panies, said Agnew. Further changes surround digi- tal trade and e-commerce rules in an effort to allow for the freer movement of data, regardless of borders, he said. A boost to de minimis levels will affect brick-and-mortar re- tailers as it allows people shop- ping online to get a better price before duty taxes apply — a win for e-commerce companies, said Agnew. For human resources profes- sionals in Canada, the deal may ease some anxiety in a tight labour market, said Antunes. "is is the big challenge for HR folks — it's that pressure," he said. "Perhaps it'll take a little bit of pressure off the HR folks that are desperate to find workers." If the USMCA allows for more investment into corporate Canada, that could help alleviate some of the labour issues, said Antunes. "What we've had in Canada really has been a lack of invest- ment in retooling machinery and equipment, and these are things that tend to increase productivity and help alleviate labour market pressure," he said. "is is an agreement that di- rectly doesn't really affect labour markets in Canada. It's more of that indirect effect. It's a longer- term piece." Regardless, the USMCA main- tains flexibility for employers seeking to hire foreign workers, in that there is no restriction on the number of employees who can cross borders, according to Mahboubi. "is is a good thing," she said. "We've seen high job vacancies and our economy is growing and the labour market is strong." If businesses are in a good position but are unable to hire the right workers with the right skills, it's going to impact Cana- da's economy and labour market negatively, said Mahboubi. "If there is no restriction for labour movement, they can hire easily and they can benefit from that — the availability of, and hav- ing access to, the pool of higher- skilled workers." "If there is no restriction on labour movement, businesses can hire easily, and benefit from having access to a pool of higher-skilled workers."

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