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Federal budget announces new trade remedies and protections for workers and unions


For decades Canadian manufacturing workers have borne the brunt of our global trade regime. Successive federal governments have signed dozens of so-called free trade agreements and, looming in the background, Canada has religiously followed all World Trade Organization (WTO) Rules to ensure that Canada remains a leading global advocate for trade liberalization.

In the meantime, Canada has lost hundreds of thousands of manufacturing jobs over the last 25 years. By some estimates, the single biggest factor behind falling trade union density in the Canadian private sector is the flight of good value added manufacturing jobs to low wage jurisdictions.

A lot of this job loss is the result of predatory trade practices by producers that operate in countries without any labour rights or environmental standards. Low cost producers of goods can flood the Canadian market with dumped or subsidized goods and effectively drive Canadian producers out of business.

This practice is unlawful under WTO Rules, and Canada has a legal trade remedy system set up to address this problem. But, until recently, workers and unions were largely excluded from this system, despite the fact that Canadian workers and communities often have the most at stake in trade disputes.

In the April 7 2022 Federal Budget, the Federal Government announced its intention to strengthen Canada’s trade remedy system by, among other things, “increasing the participation of workers.”

Following the budget, the Federal Department of Finance announced that they would be proposing policy and legislative changes to “provide trade unions with the ability to file trade remedy complaints”. The Finance Department also went on to announce that the proposed changes will ensure that “the assessment of injury to the domestic industry includes impacts on workers”.

What do these changes mean for unionized workers in trade exposed sectors? Up until now, only domestic producers were permitted to make trade complaints. Under these proposed changes, unions will now be permitted to file their own complaints. This change will finally give Canadian unions the same rights as unions in the U.S. and the E.U.

Perhaps more importantly, the definition of injury will now include injury to workers. In order to win a trade case under WTO rules, it is not enough to prove that the goods were unfairly traded – you also need to prove that the unfair trade has caused, or threatens to cause, injury to Canadian producers. Under Canadian law at present, injury to workers and communities is not even considered. Workers’ concerns are only taken into account as part of the injury caused to their employer. So, not only have workers’ interests not been sufficiently considered, but current trade law assumes that workers’ interests are the same as their employer’s interests.

Some years ago, a leading proponent of progressive trade policy, Harvard Professor Dani Rodrik, argued that if it is unfair for domestic companies to compete with foreign entities that are trading dumped or subsidized goods, it should also be unfair for domestic workers to compete with foreign workers who lack fundamental workers’ rights such as decent wages, safe working conditions and the right to collective bargaining. Yet, until now, Canadian trade law has been primarily reserved for the protection of commercial interests. Unions, human rights NGOs, consumer groups or environmental groups have not had access to trade remedy mechanisms.

The changes announced in Budget 2022 are a first step in making our trade laws more responsive to the interests of Canadian workers and communities. For those unions who have members in trade exposed sectors, whether they manufacture industrial products or consumer goods, these changes will give unions the ability to make complaints and protect their members from unfair trading practices. Canada has gone from being an international laggard in this area to being one of the more progressive jurisdictions in the World.

Mark Rowlinson practices international law, trade law and labour law at Goldblatt Partners LLP.