Division 8 agreement on Dow mega-project continues Alberta’s tradition of uniquely terrible labour laws

Back in December 2022, before a final investment decision had even been made on Dow’s net-zero ethylene/polyethylene mega-project in Fort Saskatchewan, Brian Jean had already signed the ministerial order activating Division 8 of the Labour Relations Code for the project. 

This only-in-Alberta labour relations quirk allows the principal contractor, Dow, the ability to bargain collectively and sign agreements directly with unions. We obtained a copy of one of the Division 8 labour agreements and it reveals much about how Division 8 agreements can facilitate bringing in temporary foreign workers, stops labour organizing on site and says that workers “shall not unreasonably refuse unscheduled overtime.”

But let’s talk about this project a little bit, as the context is important. The final investment decision on this $11.5 billion project came in November 2023. The project has received substantial promises from the provincial and federal governments and could see up to $2.2 billion in tax credits and grants. There are federal investment tax credits for carbon capture and clean hydrogen that could be worth up to $400 million and the government of Alberta could dole out as much as $1.8 billion through its Alberta Petrochemical Incentive Program. 

This project is massive and is going to keep tradespeople working for years with construction slated to be going into the 2030s. 

Premier Danielle Smith speaking at the government announcement on November 29, 2023 of the final investment decision by Dow in the ethylene cracker project. Photo by Chris Schwarz/Government of Alberta.

Division 8 has long been used to divide-and-conquer in Alberta

Division 8 has a long and controversial history in Alberta. Back in 2004 CNRL was building its Horizon oil sands project. It used Division 8 to sign a wall-to-wall agreement with Christian Labour Association of Canada or CLAC, a management friendly "union" that froze out unionized workers. This meant that CNRL only had to deal with one party for the construction of their project. 

Dow did not use its Division 8 power to sign a CLAC-only wall-to-wall agreement, likely because this project is so big they need all the workers they can get. Instead Dow has signed collective agreements with several actual construction unions, one with CLAC and several with non-union contractors as well. 

For a project to be approved for Division 8 status, cabinet must decide that it is “significant to the economy of Alberta,” and that it is in the “public interest” to allow Dow to negotiate its own collective agreements. Alberta is the only province that permits principal contractors to directly negotiate collective agreements. Like double breasting this allows for a uniquely terrible labour relations environment in Alberta for construction unions.  

“Division 8 was passed in order to give employers the upper hand in the construction industry. And this is a perfect example of how its usage by construction employers is designed to undercut effective unionism,” says Jason Foster, a labour relations professor at Athabasca University. 

“The irony is that while it allows wall-to-wall agreements in practice, it also allows the employer to divide and conquer. Getting one union to undercut another.”

Grim clauses abound in Dow Div 8 agreement

Here’s the bad part. 

Unions signing this agreement agree not to attempt to organize workers not represented by them. No union rep may solicit on site, in parking lots adjacent to the site, or on buses transporting workers to the site to become members of the union. Unions “agree that there shall be no union activity on the site except that necessary pursuant to law for grievance processing and administering and enforcing this agreement.” 

The agreement also forbids strikes and lockouts. Unsurprising as the entire raison d’etre of this legislation and indeed, the entire formal labour relations apparatus is to ensure labour peace. 

The provisions around overtime are troubling. While one line says that, “the employer may offer overtime with less than 72 hours notice but must permit employees to opt out with no discipline,” the next line also says that, “an employee shall not unreasonably refuse unscheduled overtime.”

The Division 8 agreement we got our hands on also has troubling language around bringing temporary foreign workers (TFWs) on site. Not only can the employer bring in TFWs—the union must “agree to support such efforts.” 

This means that unions must accept TFWs into their unions, they must explain union membership and expectations to TFWs, unions will cooperate in providing appropriate signage to TFWs in their native language, and where possible seek out and deploy current union members who speak the language of the TFW who can either supervise or assist these TFWs. They must also write letters to the federal government in support of such efforts if the employer decides to bring in TFWs.  

“It’s been a long held truism that Alberta has some of the worst labour laws in Canada and some of the worst labour laws on the continent. There are so many ways in which employers have inserted themselves into legislation that went unchecked for decades that are now just seen as normal practice, until you look at another province and you’re like, what, that’s how we do it here? I think we forget how bad our labour laws are sometimes,” says Foster. 

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