James Clancy is the RBC foreign worker scandal may mark the turning point in public opinion.
by James Clancy
Massive stories sometimes start small — a simple break-and-enter in 1972 eventually led to the downfall of the world’s most powerful politician — and a small story that broke this past weekend here in Canada is building momentum and has the potential to become huge. Is this a Watergate for our business leaders? I hope so.
It started when the CBC reported that a multinational outsourcing company called iGate used the federal government’s Temporary Foreign Workers Program to bring a worker into Canada as part of a contract it has with RBC. This particular worker was allowed into the country to be trained in the processes of the bank’s “investor services” department by the very people whose work is about to be outsourced. Forty-five RBC workers will lose their jobs in the process.
RBC is the most profitable of Canadian banks, and yet its leaders believe they’re perfectly justified in fundamentally disrupting the lives of a couple dozen of their employees in the pursuit of a sliver more in short-term profit.
Across the country, people are outraged by this story. RBC is the most profitable of Canadian banks, one of the most stable and successful corporations in the world, and yet its leaders believe they’re perfectly justified in fundamentally disrupting the lives of a couple dozen of their employees in the pursuit of a sliver more in short-term profit.
Outsourcing is often sold as a necessary business tactic in an ever-more competitive global economy, with the claim that Canadian companies risk outright bankruptcy if they’re not able to use cheap labour offshore. For some companies, this might be a credible argument. But RBC is hardly a company fighting for its life. As RBC CEO Guy Dixon said while presenting the company’s annual report last year: “2012 was a record year — our annual profit was the largest not only for RBC, but also for any Canadian company… ever.”
A few more quick stats show just how well-fed this bank is:
- It made more than $2 billion in profits in the first three months of 2013
- It paid CEO Dixon more than $12 million last year — and another $27 million to his top four VPs
- Its total tax burden has dropped from 32.9 percent in 2010 to 28.9 percent in 2012
And yet despite these clear signs of near-bullet-proof stability and health, RBC’s leaders have hired an aggressive offshore company specializing in cheap labour (one of whose slogans is “It’s criminal to pay for time and materials”) in order to squeeze more profit from its largely Canadian business. What’s worse is that the extra profits they’ll realize from outsourcing the work done by these 45 workers will be minuscule — considering that RBC employs 57,000 Canadians, will saving a few tens of thousands of dollars even register on their financials?
Considering that RBC employs 57,000 Canadians, will saving a few tens of thousands of dollars even register on their financials?
This one small story illustrates the larger danger of greed unchecked. All of our jobs and all of our communities are vulnerable to outsourcing and its cousin, privatization. These strategies might boost profits, but at a terrible cost.
Turning the tide on the dogma of greed will not be easy nor quick. But we have an opportunity now to start. Each of us must stand up against corporations and politicians driven only by greed. We yearn instead for more from our leaders: more responsibility, more community-mindedness, and more engagement with the lives of the people who contribute to their own success.
We can send a message that our corporate and government leaders won’t be able to ignore.
