Canada's actors' union and ad agencies are locked in an intense labour dispute. What's going on?

It's hard to make a living as an actor in this country. That's why the goal of so many Canadian actors is to get a work visa and move to the United States. And for the ones that remain, work in ad spots can often be a critical income stream. 

It's those ads that are currently the subject of an intense labour dispute between the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), the Canadian actors' union, and the Institute of Canadian Agencies (ICA), the group that represents advertising agencies in English Canada, a dispute that has seen ACTRA performers locked out by the ICA since April 26 of this year. 

At issue is the ability of ICA agencies to use both union and non-union talent. ACTRA's agreement with the ICA allows international market ads to use both union and non-union talent. Over the past several years, some smaller, newer agencies are using that same clause to create Canadian ads, putting older and larger agencies, who are subject to an agreement that says they can use only union talent, at a disadvantage. The ICA says it wants a more level playing field to ensure the viability of their businesses. ACTRA says that the ICA is making a disproportionately big deal over a small number of ads in what's ultimately an attempt to bust the union, stop paying actors benefits, and ultimately make the industry a harder place to work.

Meet Jessica

Before we dive into the meat of this dispute, into the various sets of numbers and accusations and timelines and an alphabet soup of acronyms, it's probably worth looking at what commercial work actually means to actors, in human terms. So let's talk about Jessica.

Here is one of the key differences between Canadian television and American television: you can tell you're watching a Canadian show when an actor playing a leading role also pops up during the commercial break, trying to sell you a Toyota or get you to switch cellphone providers. And Jessica, an ACTRA member, who asked to use a pseudonym for fear that speaking out about the dispute could negatively affect her career, is a prime example of that.

Here are some facts about Jessica: she's not famous, but she makes a full-time living as an actor. She's what they refer to as a "working actor." She's in her 30s and has been acting since the mid-'00s. You probably wouldn't recognize her name, but you might recognize her face — she's appeared in several popular Canadian and shot-in-Canada American shows. And yet, even at this stage in her career, Jessica says that commercial work still represents roughly 30 per cent of her income in any given year. And she says that when she first started acting, it was much, much more.

"Commercials were a huge part of me getting started," she says. "That was really how I started breaking into the industry. And it was able to give me some money so I could pay back all my theatre school loans. Also, you know, [it] gives you great set experience, especially when you're starting out."

Now, she says, commercials help sustain her as she branches out into directing. The nice thing about commercials, says Jessica, is that they're a steady source of residuals, meaning that each time an ad airs, the actors in it get a little money. How much depends on a host of factors, all of which are spelled out in the agreement between ACTRA and the ICA.

"When you're working a commercial, you're not necessarily doing it for [what you make] that day," she says. "You're doing it for the money that will come afterwards."

Already, she says, she's noticing the absence of commercial income. Recently, she blocked off two weeks to shoot a commercial that she thought would be a union shoot, only to find out at the last minute it wasn't, meaning she had to turn it down. She says she was surprised to see that the day rate was comparable to union scale, but what was missing was the employer contribution to her benefits and RRSP, and the contract was unclear on residuals. 

"I think because that day rate was so comparable, you know, that's what confused me," she says. "Because, you know … why wouldn't this just be union? It felt almost like it was about power."

I hope you like acronyms

OK. Now for the alphabet soup. For nearly 60 years, Canadian television commercials have been made under the terms and conditions of an agreement known as the NCA, or National Commercial Agreement. Unlike most collective agreements, which are signed by two parties — one representing labour, one representing management — the NCA is signed by three: ACTRA, the ICA, and the ACA, or the Association of Canadian Advertisers. In layman's terms, the ICA represents the people who make ads, ACTRA represents the people in those ads, and the ACA represents the people who make the products being advertised.

In 2007, a provision was added to the NCA that allowed ads for non-Canadian markets to be made in Canada using both ACTRA and non-union talent, a system that's become known as "opt in/opt out." The agencies making the ads would not be signatories to the NCA, which would make them obligated to use only union talent, but instead be able to use union talent through third party hiring companies that have signed on to the NCA. 

This is one fact that the ICA and ACTRA can agree on. (We'll get to the ACA later on.)

'Fair and equal access'

According to Scott Knox, president and CEO of the ICA, that small exception for non-Canadian market ads has grown, mutated, and mushroomed, to the point where it now puts agencies who've signed the NCA at a marked disadvantage. He says the original intent of the clause was to allow a U.S. advertising agency, for example, to use an ACTRA performer for voice work in Canada without having to be a full signatory to the NCA. What's happened is something else entirely. 

"All of the agencies that have either come to the country and opened their doors, or set up in the country [post-2007], or any of the big brands who now have their own in-house production companies or agencies … they don't have to sign the agreement," he says. "What they do is they also use a third party payroll company [to get] into the agreement, so they don't have to become a full signatory … So what that means is you've got a whole slew of businesses, post-2007 in Canada, that can jump in and jump out of the contract at will."

Older, more established companies, ones that signed the NCA prior to 2007, have to use ACTRA talent for everything. That has created what Knox refers to as an "unlevel playing field." Older agencies, with higher labour costs for performers, are now regularly being undercut by newer, more nimble upstarts. He says that it's gotten to the point that clients are specifically sending out RFPs, or requests for proposals, that say they'll only work with non-signatory agencies.

"CIBC is probably [one of] the biggest accounts that's shifting this year. They've split their entire business," he says. "[There's] the front end, the creative and strategy work, which can be done by any agency … but then they've split — completely away from that — the back end, production and delivery, and have specified that only agencies that are non-signatory can pitch for the back end of that, which is a huge chunk of the business."

The solution, he says, is to just have every agency be able to use both union and non-union performers, with all of them hiring ACTRA talent through the third party companies. That was the proposal he brought to the union during the last round of negotiations in April of this year. He says that when the union asked for more time to generate a counter-proposal, after a bargaining process that has went on for nearly a year, the ICA had no choice but to walk away from the table and declare the NCA expired.

"We just want that to be fair and equal for everybody," he says. "All of the other elements [of the contract], I mean … during negotiations, we'd agreed already [on] mandatory elements of diversity, equity, and inclusion, including hair and makeup for Black performers …, all of that was being handled. It's just that one element of levelling, of giving fair and equal access, they just refuse to work with. And we've got to a stage where … we can't carry on."

Differing facts

ACTRA national executive director Marie Kelly says that she understands that the NCA needs "modernizing," and adds that if Knox and the agencies he represents are really worried about fair access to ACTRA performers, she and the union are absolutely willing to negotiate around that.

"We said at the bargaining table, 'Let's have a conversation about that,'" she says. "And we actually provided them with a comprehensive proposal in order to decrease that work that was at issue for them. So we wanted to make sure that we were addressing their issues."

"We provided them with proposals on that issue. But as I said, we didn't even get a response to those proposals from the ICA. They completely ignored them. They locked us out."

Instead, she says, the issue of "fair and equal access" is just a "red herring." 

"The third-party issue is an issue that has been created in order to create this conflict, in order to try and make the whole industry non-union," she says.

Part of what makes her suspicious of the ICA's motives is that, as she sees it, the ICA's new stance — that everyone should hire ACTRA talent through third parties — represents a major switch in position.

"So, third parties were a bad thing to have at the bargaining table [initially], and they wanted to squeeze the amount of work that would go through third parties," she says. "In recent communication, they switched their position and have suggested no ad agency should sign a collective agreement with us, and every ad agency should go through a third party."

Whether or not ACTRA gave a reasonable counter-proposal and whether or not ICA is trying to bust the union are just two of the areas where ACTRA and the ICA give a very different account of the facts. Indeed, the two sides can't even decide on what the NCA is. ACTRA insists it's a collective bargaining agreement, while the ICA calls it a contract between the ICA, ACA and ACTRA.

(Knox is adamant the ICA is not trying to bust the union, saying, "I asked [the agencies] time and time again: 'Do you want a new agreement or are you telling me actually you want out of the agreement completely?' Every single one unanimously [said], 'No. We want a new agreement.'")

It's just that one element of levelling, of giving fair and equal access, they just refuse to work with. And we've got to a stage where … we can't carry on.- Scott Knox, ICA CEO

Another disputed issue is just how many ads we're talking about. Kelly says that less than three per cent of ads featuring ACTRA performers involve third party contracts for Canadian work. Knox, on the other hand says that ACTRA was unable to give them exact numbers on how many Canadian ads involved third parties, it has determined that that the rough proportion of ads shot in Ontario that are non-union is "approaching 50 per cent." He says that in British Columbia, that number is even higher. 

Kelly adds that, for agencies, hiring ACTRA members through third parties is between 10 and 15 per cent more expensive than hiring them directly. 

"Our members are less than half a percent out of every dollar that is spent by the ad agency," she says. "So, to project in bargaining that they wanted to see some economy out of our collective agreement, and then to suggest the solution to all of this is to add a whopping 15 per cent tag on top of all of the costs, you know? It's strange."

In Quebec, a different organization, l'Association des agences de communication créative (A2C), represents advertising agencies in the province. Kelly says the A2C is working on an alternate solution to the problem of inequitable access to ACTRA performers: get more agencies to sign the NCA. 

"The A2C is now promoting all of its agencies to come back and sign under the NCA," she says. "So the Quebec ad agencies are supportive of our agreement. The advertisers across Canada are supportive of our agreement. And we just have the ICA, [which] continues to be outside the agreement."

Wait, the advertisers are supportive?

If this were a traditional labour negotiation — labour on one side and management on the other — the ICA and ACA (the group that represents Canada's advertisers) would both be on the management side of the table. And while that's how it started when the three parties began negotiations in the spring of 2021, that's not how things are now. 

Ron Lund is the president and CEO of the ACA. He says the ICA and ACA have been negotiating this agreement together since the inception of the NCA. But during this round of bargaining, Lund says the ICA began trying to make unilateral moves after the Easter long weekend. He says ICA representatives told him they were going to hold the line on what has become known as the "opt in/opt out" option, something he says amounted to forcing ACTRA to bargain to impasse. Lund adds that, up until that point, he was under the impression that the three parties had been making good progress.

(ACTRA also interpreted the ICA's actions as bargaining to impasse, and has filed a bad faith bargaining complaint with the Ontario Labour Relations Board.)

"As a partner for so many years, to be levelled a unilateral decision was pretty much a surprise to us," he says.

He adds that, in his view, the ICA is trying to "level the playing field for their membership… at the expense of the industry." 

Lund says that Knox's claim that smaller agencies are undercutting the larger incumbents that have signed the NCA doesn't jibe with the facts on the ground. 

"Those 16 agencies are huge agencies who do a disproportional amount of production in Canada," he says. "To put out a number that there's all these third party performances going on is just incorrect."

[Performers] are really paying the price, literally, with our money that we use to pay rent and feed our children.- "Jessica," anonymous ACTRA member

Lund adds that many of the agencies represented by the ICA are international agencies who have dealt with similar issues in other markets.

"The same type of problems exist in the States. You know, there's third parties, there's non-union work," he says. "Yet the same agencies, who are locking ACTRA out up here, sign on to [American actors' union] SAG-AFTRA down there and manage to work around it all."

He says that, in order to preserve stability and keep his advertisers' spots running, the ACA had no choice but to leave the ICA behind and sign a one-year agreement with ACTRA. 

"With ICA just walking away … there were no mechanisms to say, 'How much do you pay the performer for a renewal of a commercial?'" he says. "For those commercials that were already in existence, there had to be a mechanism for how much do you pay a performer for that [ad] in the future? If there's no agreement, do you not pay them anything, you know? Do you pay them the same as the last time? So there had to be some kind of stability and way forward."

Ultimately, all three parties say what they want is to get back to work. If there's one thing they all seem to be able to agree on, it's that this extended stalemate will be bad for actors, agencies, and advertisers, and that long-term instability will cause ads to get made overseas and talented people to find other work. 

"[Performers] are really paying the price, literally, with our money that we use to pay rent and feed our children," says Jessica. 

The parties have a meditation date set for next week, according to ACTRA, but with ACTRA and the ICA still seemingly miles apart on this issue, it's anyone's guess as to how — and when — this stalemate will resolve itself.