How does this affect the industry?

   
The contract cleaning industry, particularly in and around the City of Toronto, is one in which there is intense competition among a number of different businesses.  The industry operates on the basis of competitive bidding.  Further, labour costs represent a significant proportion of a company’s overall costs.

Accordingly, to the extent that Impact is able to operate by engaging in these types of subcontracting arrangements, there is a corresponding cost advantage that they are able to achieve vis-à-vis those competitors that do not structure their operations in such a manner.  The result, at the most basic level, is to create downward pressure on employment standards in the industry, including downward pressure on wages.  In addition, it creates an incentive for others to adopt similar subcontracting schemes, which would simply create an even larger pool of vulnerable workers and a further downward spiral in employment standards in the industry.  Perhaps the most unfortunate result is that such downward pressure would further harm those workers that are already among the lowest paid service workers.