Given tax breaks, Royal Bank betrays public trust by replacing staff with foreign workers

If the McGuinty government is to be remembered for one thing, it’s the parade of bankers giving their advice on how to run government – including our public health care.

Former TD economist Don Drummond even did two assignments, first giving advice on health care “sustainability” and then given the larger assignment of providing a blueprint for the government to get out of its financial difficulties.

Given the financial services industry’s role in bringing down the world economy, it’s a little like inviting the arsonist to come back to discuss how to repair your torched house.

The parade extended beyond Drummond.

CIBC and Goldman Sachs were hired by the McGuinty government to give advice on selling off crown assets. The CEO of BMO Financial was asked to vette changes to social assistance. A top executive from Scotiabank was picked to run Infrastructure Ontario.

The banks were also the beneficiary of the blank cheque the government gave corporations in the form of across-the-board tax cuts. The phased in $2.5 billion in tax cuts were supposed to be about generating jobs in this province – that was the excuse — but there was no actual requirement to do so to benefit from this largesse. Instead, as we found out this weekend, the Royal Bank – the largest financial institution in Canada – was doing the opposite.

The very profitable Royal Bank was caught this weekend running a “pilot” project where it was bringing in – via a third-party – temporary foreign IT workers to be trained to take the jobs of 45 IT staff at RBC Investor Services. Incredibly, the training was to be provided by the Canadian workers the contract foreigners were to replace.

One of the non-union IT staff spoke to the CBC and in the process placed himself at enormous personal risk. A whistleblower at 60 years of age, his prospects for finding another job may be grim – especially in the financial services industry, and he may be also putting his severance at risk. We all owe him a debt of gratitude for exposing what many of us already suspected to be true – that corporate outsourcing was now creeping into the middle class and destroying even more jobs here in Canada.

It is no surprise that this is taking place in IT. With remote technology also becoming an increasingly part of the health care industry, there is every incentive for a growing for-profit list of Canadian health care providers to do the same. Their primary duty is not to care, but provide a return to shareholders.

Ironically while Canada is very particular about credentialing foreign doctors, Ontario has no problem with funding citizens to travel abroad to receive surgeries in places like India as part of a growing medical tourism industry. If health care workers think they are safe from similar outsourcing, they should think again.

The Royal’s excuse is rather lame. They claim that abiding by the rules around temporary foreign workers is the responsibility of their outsourcing contractor – iGate – not the bank. Yet clearly Royal knew that it was training these workers in their own Toronto offices with their own Toronto staff to clearly take the jobs of these staff members overseas. The temporary foreign worker program is supposed to fill gaps in the labour market, not displace workers presently in these jobs. iGate and Royal can hardly claim that these foreign workers have skills the Canadians do not possess when it is asking the displaced staff to train them.

Rabble blogger Karl Nerenberg points out that one of the key recommendations of the Federal Conservatives ‘Red Tape Reduction Commission’ was to make it easier, simpler and less burdensome for firms to hire temporary foreign workers.

“Now, after the Royal Bank revelations, some might be asking if the government might not have gone a bit overboard in reducing the ‘burden’ on businesses that employ foreign workers,” writes Nerenberg.

Did we ever think it would be otherwise?

With Canadians outraged by the Royal Bank’s behavior — social media is full of promises by Royal Bank customers to take their business elsewhere — the Federal government is suggesting the RBC situation is “unacceptable if true.” If true?

This morning the Royal Bank refused to talk to the CBC Metro Morning program.

There is little doubt they are looking for a better way to spin this story.

The tragedy is that for all workers – both foreign and domestic – we all lose. As we reported in February, workers in developing nations are hardly getting the benefit of the job transfer. In Nicaragua we saw how workers are making a dollar an hour to make pants that retail for close to $70 in the United States. As the factory manager told us, all they were doing is taking people “from misery to poverty.” Without an international minimum wage, that situation can only get worse in these countries.

Today these Indian workers may get the Royal Bank jobs. But what about tomorrow when countries like Bangladesh or China have enough trained individuals willing to work for less?

Canada is bringing in foreign workers, but we don’t give the benefit of Canadian labour laws or the prospect of full immigration. We’re happy to use them and send them away when we no longer need them.

It is, after all, what we increasingly now do to our own domestic workers.

We’re also seeing the results of this in the irrefutable data around growing inequality – a situation that threatens to permanently destabilize our economy.

While the Royal is undermining the livelihood of its own front line staff, they have no problem richly rewarding their executives. CEO Gordon Nixon is the highest paid bank CEO in Canada, taking home $12.6 million in salary, stock and bonuses last year.

Unions are needed more than ever. Big business and their political allies are doing everything possible to undermine the power of workers and their unions, including the Hudak and Harper Conservatives attack on the Rand Formula.

Our colleagues at the Steelworkers Union have invited the bank workers to contact them for legal support.

We may not have picked this fight, but it appears to have finally woken Canadian up from a deep slumber about their future prospects.

It’s time to do more.