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Labour organization in Canada

The organisation of labour in Canada is very different from the organisation of labour in France for example. In this article, we describe the main key elements of the organisation of labour in Canada.

Canada: Labour organization

Credit Photo : Unsplash Ali Tawfiq

 

            I.          State of the Canadian labour market

The Canadian labour market is globally dynamic. It has experienced, like almost all countries in the world, major upheavals in the context of the COVID health crisis.

Canada is considered a country with almost full employment. Indeed, the unemployment rate was below 5% in July 2022, after a steady decline observed since the beginning of the year. The month of August recorded a slight recovery, with a rate which appears at the end of August at 5.4% of the active population.

Wages are generally up over twelve months, and this increase is higher than that of observed inflation, standing at 5.4%. This shows the dynamism of the market. Some sectors, as elsewhere, are experiencing significant staff shortages (health, hotels, restaurants, tourism). As the labour market is flexible (according to the American model), wages have increased significantly in recent months in order to find a kind of balance between supply and demand.

The sectors that are recording a drop in their employment rate are mainly education and construction.

These national data hide significant disparities depending on the age of the population considered, the province concerned, the level of education, etc.
 

            II.         Canadian labour data

The legal working week in Canada is 40 hours per week, with at least one day of compensatory rest (usually Sunday). Overtime is possible, as long as the maximum duration worked does not exceed 48 hours per week. The employee cannot refuse to perform the overtime requested except in exceptional cases. These overtime hours get remunerated at 150% of the standard basic rate.

Paid leave is generally ten days per year, at the start of the career. This can increase with seniority at the discretion of the employer. Ten days being the legal minimum.

Pregnant women benefit from 18 weeks of maternity leave. Fathers get five weeks of paternity leave. Parental leave, accessible to both parents, can last up to one year.

The minimum hourly wage is $11.95 in September 2022 and will be raised to $13.5 from October 2022. This minimum wage may vary according to the fields of activity and the provinces concerned.

Canadian income taxation operates on the same system as French taxation, through thresholds, with rates increasing as the thresholds increase. Canadian taxes range from 15 to 33% of income, depending on the annual amount earned by the employee. A tax depending on each province, is added to this income tax, which varies between 4 and 21%.

            III.        Employee Protection in Canada

Social contributions are much lower in Canada than in France, for example. This goes hand in hand with much less social coverage, often requiring you to take out individual insurance yourself. "Traditional" employees, for example, only cost their employers  7.7% of labour charges (5.7% for disability pensions, 2.2% for employment insurance). They pay approximately 7% of payroll costs.

These data vary according to the provinces considered. For example, British Columbia has been paying for the health care of its residents for several years.

For the self-employed, the rates are slightly higher but remain much lower than in France. Employment insurance, for example, is optional. This leaves the choice to the self-employed worker to contribute to open his rights in case of need at a later day (illness, pregnancy, etc.) or to build up his own savings throughout his career.

In some provinces, there is also an insurance called QPIP or parental insurance, which applies within the limit of certain thresholds not to be exceeded.

The Canadian system is very different from the French system, as is the overall organisation of work. The Canadian labor market is flexible, marked by fulltime employment, low contributions, but also low rights and much less social security coverage than in France. In Canada, nearly 30% of employees are affiliated with a union, which gives them significant bargaining power. The differences in terms of unions are significant according to the provinces considered. These differences also concern working hours, tax percentages, and minimum wage amounts. The Canadian government issues guidelines to be respected by all, but the provinces are relatively autonomous and can reinforce certain minimums, for example.

 

Sources:

- The Most In-Demand Jobs in Canada - Neuligent
- The Daily - Labor Force Survey, August 2022 (statcan.gc.ca)
- Labor Market: Definitions, Charts and Data - Bank of Canada
- Hours of work - Canada.ca

- Federal Personal Income Tax Rates and Brackets in Canada | TurboTax Tax Tips (intuit.ca)