There is nothing new about outsourcing jobs to lower cost countries. There is also nothing new about using temporary foreign “guest” workers as a way to avoid paying wages that the law of supply and demand would otherwise set for Canadian labour.

However, by bringing these two trends together in the operation of a part of RBC’s sprawling information-and-technology empire, the bank inadvertently made the worst mistake a financial institution can ever make: It has embarrassed the government that licenses and regulates it.

By now, the details of the affair are well known. RBC decided it would be cheaper to outsource the IT operations supporting one of its divisions. The company it contracted with primarily does such work from locations in India. The bank then gave 45 of its own employees notice that their jobs would be made redundant and proceeded to bring in the contractor’s people to train with the soon-to-be laid-off staffers and begin the transition.

Unfortunately, the contractor also appears to have brought in at least one foreign national (by RBC’s own acknowledgement) on a temporary guest worker visa, arguing no one in Canada had the necessary skills to do the work. What about the RBC’s now redundant Canadian IT workers? None of them could have been hired by the contractor, either immediately or with a short training period? After getting hit by a barrage of bad publicity and customer complaints, RBC CEO Gordon Nixon admitted that this one failed the smell test.

RBC’s leaders and damage-control experts are now moving heaven and earth to keep everyone’s attention focused on the fate of this small handful of IT professionals, hoping the story will go away if everyone made redundant is given a new job. Nevertheless, the problem that RBC has inadvertently disclosed to the public is far deeper, and I suspect this is why public anger is so great.

The advice almost all experts and government officials have been giving Canadians for many years has been to invest in job skills and ensure that you and your kids are capable of doing high-skill work that the market values. In short, if you cannot seem to get ahead and your kids don’t have a future, it is your fault, not the government’s fault and not the fault of our business leaders.

The Harper government has been no different in this regard. The last federal budget even had as its centrepiece a new program to invest in skill-upgrading.

However, the RBC affair has now shown the public the truth. No matter how high your skill level, you are vulnerable to unemployment. Unemployment is not just the fault of workers but of governments and businesses, too.

The Conservative government’s skills-upgrading program now appears to be something of a cruel joke as it runs counter to their other policies designed to make it easier for companies to reduce wages and shed Canadian workers, such as the guest worker program, and international agreements we have signed that make it easier for corporations to ship work overseas. Thanks to RBC, the argument that we have heard from Ottawa for so long — that the unemployed are responsible for their own fate — now just seems plain silly.

As is often the case, a problem at a big bank is now morphing into an embarrassing problem for government. If Harper has shown anything since taking power in 2006, it is that he remembers like an elephant. Those who help his government are rewarded and those who make difficulties are not.

The public relations price that RBC has paid so far will probably be a pittance compared to the price in “good will” that it is going to pay in dealing with the federal government going forward.

Daniel Cohn is director of the School of Public Policy and Administration at York University.

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