US embassy cable - 05QUEBEC31

UNCLAS SECTION 01 OF 02 QUEBEC 000031 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ELAB, ETRD, PGOV, CA, Labor, Trade 
SUBJECT: WAL-MART'S UNION WOES IN QUEBEC 
 
SENSITIVE BUT UNCLASSIFIED 
 
1. (SBU) Summary:  Wal-Mart's decision to close down its store 
in Jonquiere (250 km north of Quebec City), following that 
store's successful unionization drive is provoking public 
outrage in Quebec.  The idea that Wal-Mart, the world's largest 
and perhaps wealthiest corporation, is playing hardball offends 
Quebecers.  A public call to boycott Wal-Mart fell short and 
many Quebecers still want a Wal-Mart in their town for the jobs 
and low-cost goods and services.  They just wish they could have 
both Every Day Low Prices and a Wal-Mart that complies with 
Quebec's generous employee labor laws.  That said, while Quebec 
has traditionally looked favorably upon the union movement, what 
is driving negative public opinion in this case is not so much 
solidarity with the unions as anxiety over globalization.  We 
detect no up tick in anti-Americanism in the current debate over 
Wal-Mart.  If anything, local communities here are identifying 
with the Wal-Mart-related struggles of their neighbors in small 
New England towns and across America.  End summary. 
 
2. (SBU)  As of fall 2004, Wal-Mart had 235 in Canada, 
forty-five of which are in Quebec Province.  The Jonquiere 
Wal-Mart, one of three in the Saguenay region of Quebec, opened 
three years ago.  Soon after, the United Food and Commercial 
Workers Union (UFCW) sought to organize a majority of the 
Jonquiere Wal-Mart employees in a secret ballot.  This initial 
effort failed but in July 2004 the UFCW was able to present 
signed union membership cards from a majority of employees. 
Consistent with provincial labor laws, the Quebec Labor 
Relations Board accredited the union as the employees' 
bargaining agent, making the Jonquiere Wal-Mart the first to 
unionize in North America.  Management immediately responded by 
threatening to close the store for poor economic performance. 
 
3. (SBU)  Beginning in October 2004, the union entered into 
unsuccessful contract negotiations with Wal-Mart management.  On 
February 2, the union applied to the Ministry of Labor for an 
arbitrator who under Quebec law can impose a first contract on 
newly organized workplaces.  Shortly after the Ministry granted 
the request, a Wal-Mart spokesman announced that the store would 
be closing in May 2005 because "we've been unable to reach an 
agreement with the union that in our view will allow the store 
to operate efficiently and profitably."  The UFCW plans to file 
charges of bad-faith bargaining and unfair labor practices.  If 
the union can prove this to the Quebec Labor Relations 
Commission, it could force a reversal of the shutdown or result 
in significant fines. 
 
4. (SBU) Trade unions have played a major role in Quebec's 
modern history.  Quebec trade unions were prominent in the 
success of the Quiet Revolution of the 1960s that laid the 
political foundations of contemporary Quebec.  The Saguenay 
region itself has a recent union tradition, resulting from the 
organization in the 1940s of its (now mostly closed) aluminum 
mills.  Quebec today is the most unionized region in North 
America, with over forty percent of the province's workforce 
represented by a union.  That said, the public reaction -- 
judging from media coverage and from our conversations with a 
wide variety of Quebecers -- has been less a matter of defending 
the unions and more of anger at what is viewed as the 
heavy-handed tactics of the world's largest corporation. 
Articles appear almost daily in the local press of reported 
Wal-Mart bullying of employees, suppliers and communities here 
and elsewhere.  Many Quebec City residents recall that when 
Wal-Mart Canada began with the purchase of Woolco stores in 
1994, it chose not to purchase those local Woolcos with union 
contracts. 
 
5. (SBU) Wal-Mart presents Quebec, particularly the heartland, 
with the same challenges and opportunities as it does in rural 
and small town America.  On the one hand, consumers are 
attracted to its convenience and wide array of products and 
services; on the other hand, they fear Wal-Mart will put 
existing shops out of business.  In 2003, Consul visited 
Shawinigan, like Jonquiere a former industrial area, and was 
told by a Chamber of Commerce official that his biggest 
challenge was what to do about a Wal-Mart proposal to locate in 
town.  If they allowed Wal-Mart to set up shop, existing 
merchants would go under.  But if they turned Wal-Mart down, it 
was clear Wal-Mart would build in nearby Trois Riveres, and 
Shawinigan's economy would be hurt anyways. 
 
6.(SBU) Others believe they can benefit from Wal-Mart's 
presence.  In the CG's recent visit to St. George de Beauce, a 
town about one and a half hours south of Quebec City by car, the 
town mayor pointed with enthusiasm to a plot of land purchased 
by Wal-Mart two years earlier.  "We are eager for Wal-Mart to 
begin building on the site," he said.  He is confident that once 
Wal-Mart comes to St. George, the town will be able to entice 
Wal-Mart into buying local products for sale in Wal-Mart stores 
in North America.   Last week, newly appointed Labor Minister 
Laurent Lessard was condemned by the PQ Opposition for speaking 
favorably about Wal-Mart and free market entreprise. 
 
7. (SBU) While in many places in the world a battle with as 
prominent a U.S. firm as Wal-Mart would produce an up tick in 
anti-American sentiment, such is not the case in Quebec.  If 
anything, we detect the reverse - a sense of solidarity with 
workers and small towns in America struggling with similar 
challenges.  A local Radio-Canada report on Wal-Mart Feb. 27 
consisted of interviews with citizens of St. Albans, Vermont, 
over how they feel about Wal-Mart's presence in their town.  A 
Feb. 26 article on Wal-Mart headlined "Wal-Mart blamed for 
harassment in Ste. Foy (a suburb of Quebec City)" jumps to a 
subheading, "Employees in Colorado say no to unionization." 
Even the bitterest opponents in Quebec will cite that Wal-Mart 
is acting no differently in Canada than in the U.S., and use 
American examples to bolster their anti-Wal-Mart case. 
 
8. (SBU)  Comment:  The Jonquiere Wal-Mart saga is part of a 
larger battle between Wal-Mart and unions being played out 
elsewhere in Canada and the U.S.  (Wal-Mart is facing 
certification applications at about a dozen other locations in 
Quebec, Saskatchewan and British Columbia.)  It is also bringing 
to the fore what one business analyst (a Quebecer) here 
describes as Quebec's "tortured relationship with money." 
Quebec, according to this view, practices a "distinct 
capitalism," a capitalism of the left where successful business 
people are admired even as people feel malaise before iniquities 
in wealth.  It is a sign of health in our bilateral relationship 
that Quebecers -- however they feel about Wal-Mart -- are 
looking south across the border for kindred spirits rather than 
using the situation as fodder for anti-Americanism. 
 
 
 
FRIEDMAN