“What we are doing is perfectly legal.”
That’s pretty much how one of Canada’s largest, richest businesses responded to a burst of public outrage over what it thought would be a run-of-the-mill outsourcing of 45 Toronto-based IT employees to an Indian firm called iGate. Could it be that Canadians are waking up to corporate power and abuse?
RBC can hardly cry poverty, they are a profitable bank capitalized at something like eighty billion dollars, so to get caught dismissing established employees to make use of a temporary worker program that allows for fifteen percent lower wages is a public relations disaster. A turn that squanders a lot of the moral capital the bank shared with the rest of the sector for not having dumped Canadians into a sub-prime mortgage or bailout nightmare like their risk-worshipping British and American cousins came up with.
Also tough are the wider questions raised. The list of major businesses lined up for the temporary worker program includes some of the most recognized names in the Canadian corporate caravan. For example, Tim Hortons, the inescapable coffee shop so beloved of Canada’s working- and wish-they-were-working-class is on the list for the program.
The mass media has picked up the public’s indignation and the story seems to have legs, despite RBCs damage control effort via full-page print ads in major newspapers and online. If all the cranky comments and Facebook flutter translates into closed accounts, loss of transaction fees and the like then this might be a learning moment for management and the board of the bank. Certainly, Mr. Nixon, President and CEO of the bank, can’t have enjoyed the last week or so very much. It isn’t in the selfish self interest of the bank to have a precarious, underpaid workforce and alienated customers.
Perhaps the public has learned something about the vulnerability of Canada’s massive and historically well-protected banks. After two centuries of building profitable businesses in the second largest country in the world and emerging as global players the brand of Canada’s banking sector is perhaps more fragile than it realized. The leverage of the public when it comes to modifiying the harmful behaviour of the banks has been glimpsed this week. For the record, RBC puts its transaction fees up recently.
Labour groups have expressed doubt about the temporary worker program since it got going. Unions are threatened in an economy based on flexible labour. Additionally, word is not very good on the program from the workers inside it. The whole deal says exploitation. Conservative commentators like Andrew Coyne and Terence Corcoran are all over this controversy in their columns as an overblown emotional diversion which does a disservice to corporate Canada in its efforts to be its best possible self. Such daring contrarians!
Corporate power and abuse like this, sanctioned by Ottawa, supports suburban poverty. Adding insult to injury is the fact that the Greater Toronto Area, where the outsourcing was planned to take place, has a slightly higher rate of unemployment than the country at large, RBC is in the black and has paid out record bonuses in recent times.
Good work RBC!
Outsource Canada “I spent two days on this site!” matches the number of foreign workers in each province with the number of unemployed there.
Huffington Post Canada has added the RBC outsourcing fiasco to its ongoing coverage of middle class decline.
Temporary Insanity: RBC vs Canada’s middle class
image: Siqbal via Wikimedia Commons