RBC: Thomas Mulcair blasts Ritak over foreign-worker outsourcing ...

NDP leader Thomas Mulcair has joined the fray over Royal Bank of Canada?s plan to outsource dozens of jobs at its Toronto operation, calling on the Conservative government to close legal loopholes that encourage corporations to farm out work performed by Canadian employees.

RBC?s now tarnished reputation tangled up in government crosshairs

Gord Nixon should take little comfort, amid the public relations fiasco engulfing Royal Bank of Canada, that it was all an unfortunate misunderstanding.

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Canada?s biggest bank landed in hot water over the weekend following media reports that RBC had struck a deal with iGate Corp., a leading global outsourcing company with significant operations in India, and was in the process of transferring dozens of IT jobs at its Toronto operation out of the country.

But it?s not simply the fact that jobs are being lost that?s causing the ruckus ? after all, companies have been outsourcing for years ? but rather the way it?s happening.

Under the deal, iGate staff will come to Canada to be trained by the RBC workers whose jobs they will ultimately be taking. It?s all perfectly legal under Canada?s controversial Temporary Foreign Worker program (TFP) which enables companies to bring people into the country on a temporary basis. Not only is it legal, but it?s happening at plenty of other workplaces as well.

RBC is ?using the techniques put in place by the Conservatives to lower the working conditions of Canadian workers,? Mr. Mulcair told reporters, adding that the government must reconsider the TFP.

The program is aimed at allowing companies to foreign workers when qualified Canadians are not available, and is frequently used to alleviate labour shortages in agriculture and home care sectors. But according to Mr. Mulcair, there?s little justification for the TFP with more than 1.5-million Canadians unemployed.

The comments come a day after the federal government raised concerns of its own.

?We have recently learned of allegations that RBC could be replacing Canadian workers by contracting with iGATE, which is filling some of the roles with temporary foreign workers,? Diane Finley, the federal minister of human resources and skills development, said in a statement on Sunday. ?If true, this situation is unacceptable.?

Critics say the real question is whether the TFP makes any sense for Canada. Canadian banks, like most other industries, have been looking for way to lower costs and compete more effectively in an increasingly globalized world. As part of that process, they?ve been outsourcing for years ? a legitimate business strategy.

?There?s nothing wrong with outsourcing,? said Finn Poschmann, vice president of research at the C.D. Howe Institute, an economic policy think tank based in Toronto.?The problem with the TFP is it?s not aligned with established government strategy? and the public is starting to recognize that, he said.

In other words, outsourcing is a fact of life but moving people from other lower-cost jurisdictions to this country in order for Canadian companies to cut costs is not in the interests of the country.

But more than ever Canada?s big banks are facing pressure to put a lid on expenses. With the domestic economy showing signs of slowing and consumer debt at record levels, their bread-and-butter retail operations are expected to generate thinner profits in the coming quarters. If they are to stay in shareholders? good books they must find ways to maintain earnings momentum and one of the simplest ways to do that is to aggressively move work to lower cost jurisdictions.

Source: http://business.financialpost.com/2013/04/08/ndps-mulcair-takes-aim-at-rbc-over-foreign-worker-outsourcing/

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