The Rate of Exploitation of Workers at Sun Life, One of the Largest Private Employers in Canada

Introduction

In another post I presented the twenty largest employers in Canada according to profit (see A Short List of the Largest Private Employers in Canada, According to Profit). I also presented various posts where I calculated the rate of exploitation of such workers (see, for example, The Rate of Exploitation of the Workers of the Royal Bank of Canada (RBC), One of the Largest Private Employers in Toronto and in Canada, The Rate of Exploitation of Workers of Suncor Energy, One of the Largest Private Employers in Canada or The Rate of Exploitation of Canada Life Workers).

In this post, I will calculate the rate of exploitation of workers at another large private employer in Canada, Sun Life.

What is Sun Life?

The nature of Sun Life is set out in Wikipedia:

Sun Life Financial Inc. is a Canadian financial services company. It is primarily known as a life insurance company.

The Nature of the Rate of Exploitation

But what is the rate of exploitation? And why not use the usual rate of profit or the rate of return? The rate of profit is calculated as profit divided by investment. Since employers purchase both the means for work–buildings, computers, office supplies, raw material–and hire workers–we can classify investment into two categories: c, meaning constant capital, or the capital invested in commodities other than workers; and v, or variable capital, the capital invested in the hiring of workers for a certain period of time (wages, salaries and benefits).

The purpose of investment in a capitalist economy is to obtain more money (see The Money Circuit of Capital), and the additional money is surplus value when it is related to its source: workers working for more time than what they cost to produce themselves. The relation between surplus value and variable capital (or wages and salaries) is the rate of surplus value or the rate of exploitation, expressed as a ratio: s/v.

When the surplus is related to both c and v and expressed as a ratio, it is the rate of profit: s/(c+v).

In Marxian economics, you cannot simply use the economic classifications provided by employers and governments since such classifications often hide the nature of the social world in which we live. The rate of profit underestimates the rate of exploitation since the surplus value is related to total investment and not just to the workers. Furthermore, it makes the surplus value appear to derive from both constant capital and variable capital.

I decided to look at the annual report of some of the largest private companies in Canada, Toronto and other cities if they are available in order to calculate the rate of exploitation at a more micro level than aggregate rates of surplus value at the national or international level. Politically, this is necessary since social democrats here in Toronto (and undoubtedly elsewhere) vaguely may refer to exploitation–while simultaneously and contradictorily referring to “decent work” and “fair contracts.” Calculating even approximately the rate of exploitation at a more micro level thus has political relevance.

I use the 2023 annual report for the data.

Conclusions First

As usual, I start with the conclusion in order to make readily accessible the results of the calculations for those who are more interested in the results than in how to obtain them.

The Rate of Exploitation of Sun Life Workers

To calculate the rate of surplus value, we need to divide “Third and Final Adjustment of Surplus Value (s) (Total net income)” by “Total employee expenses” or “variable capital (v).”

So, with the adjustments in place, the rate of exploitation or the rate of surplus value=s/v=4,955/5,671=87%.

This means that, in terms of money, $1 of wage or salary of a regular Sun Life worker results in $0.87 surplus value or profit for free. Alternatively, that means that for every hour worked that results in an hourly wage, a worker at Sun Life works around an additional 52 minutes for free for the Sun Life. It also means that, within an hour worked, a worker at Sun Life works 32 minutes to obtain her/his wage or salary and 28 minutes for free for Sun Life.

In a 7.5-hour (450 minutes) work day, Sun Life workers spend 4 hours 1 minute (241 minutes) to obtain their wage for the day, and they spend 3 hours 29 minutes (209 minutes) for free for Sun Life.

In an 8-hour (480 minutes) work day, Sun Life workers spend 4 hours 17 minutes (257 minutes) to obtain their wage for the day, and they spend 3 hours 43 minutes (223 minutes) for free for Sun Life.

In a 9-hour (540 minutes) work day, Sun Life workers spend 4 hours 49 minutes (289 minutes) to obtain their wage for the day, and they spend 4 hours 11 minutes (251 minutes) for free for Sun Life.

In a 10-hour (600 minutes) work day, Sun Life workers spend 5 hours 21 minutes (321 minutes) to obtain their wage for the day, and they spend 4 hours 39 minutes (279 minutes) for free for Sun Life.

In an 11-hour (660 minutes) work day, Sun Life workers spend 5 hours 53 minutes (353 minutes) to obtain their wage for the day, and they 5 spend hours 7 minutes (307 minutes) for free for Sun Life.

In a 12-hour (720 minutes) work day, Sun Life workers spend 6 hours 25 minutes (385 minutes) to obtain their wage for the day, and they spend 5 hours 35 minutes (335 minutes) for free for Sun Life.

In a 13-hour (780 minutes) work day, Sun Life workers spend 6 hours 57 minutes (417 minutes) to obtain their wage for the day, and they spend 6 hours 3 minutes (363 minutes) for free for Sun Life.

In a 14-hour (840 minutes) work day, Sun Life workers spend 7 hours 29 minutes (449 minutes) to obtain their wage for the day, and they spend 6 hours 31 minutes (391 minutes) for free for Sun Life.

Of course, during the time that the Sun Life worker works to receive an equivalent of her/his own wage, s/he is subject to the power of management and hence is unfree (see, for instance, Management Rights, Part Four: Private Sector Collective Agreement, Ontario and Employers as Dictators, Part One).

It should be noted that I have used the verb “obtain” rather than “produce.” In Marxian economics, bank workers, as well as sales workers do not produce surplus value but rather transfer the surplus value already produced. This does not mean that these workers are not exploited capitalistically; they are used impersonally by the employer to obtain surplus value and a profit. Furthermore, things produced by others are used by employers such as Sun Life to control their working lives in order to obtain surplus value or profit. (I leave the issue of how wealth management and insurance companies exploit workers as consumers to others more competent to deal with the issue; the point here is to focus on the exploitation of wealth management and insurancea workers as workers and not as consumers.)

Political Considerations and Conclusions

Sun Life workers do not belong to a union. Would their becoming unionized turn their situation into one where they had a “fair contract” and “decent work?” I think not. Unions can limit exploitation and can control some aspects of their working lives, but in principle workers are things to be used by employers even with unions. This does not mean that a non-unionized environment is the same as a unionized environment. With unions that are independent of particular employers, that is to say, are real unions, there is an opportunity for workers to develop collective organizations of resistance against the power of particular employers. However, their power should not be exaggerated.

Even if workers were not exploited, they would still be oppressed since they are used as things (means) for purposes which they as a collectivity do not define (see The Money Circuit of Capital). Does that express something fair? Management–a minority–has the power to dictate to workers–the majority– what to do, when to do it, how to do it and so forth–and is not the imposition of the will of a minority over the majority a dictatorship? (See Employers as Dictators, Part One). Is that fair?

The ideology of unions–that somehow they can produce a “fair contract” and “decent work” (see for example Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One: The Canadian Union of Public Employees (CUPE) and Fair Contracts or Collective Agreements: The Ideological Rhetoric of Canadian Unions, Part Three: Unifor (Largest Private Union in Canada))–needs, though, to be constantly criticized. Workers deserve better than the acceptance of such ideology by the left.

Data on Which the Calculation Is Based

The calculation of the rate of exploitation is undoubtedly imperfect, and I invite the reader to correct its gaps. Nonetheless, the lack of any attempt to determine the rate of exploitation at the city level has undoubtedly reinforced social-reformist tendencies.

I use the consolidated income data to calcuate the rate of exploitation–it includes all subsidiaries.

Surplus Value (s) or Profit

CONSOLIDATED STATEMENTS OF OPERATIONS [2023=primero de cada numero]
For the years ended December 31, (in millions of Canadian dollars)

Insurance service result

Insurance revenue (Note 10) $21,356
Insurance service expenses (Note 10) (18,450)
Reinsurance contract held net income (expenses) (Note 10) (69)

Net insurance service result 2,837 [21,356-18,450-69=2,837]
Investment result

Investment result excluding result for account of segregated fund holders:

Net investment income (loss) (Note 5) 11,586
Insurance finance income (expenses) from insurance contracts issued (9,675)
Insurance finance income (expenses) from reinsurance contracts held 59
Decrease (increase) in investment contract liabilities (331)

Net investment result excluding result for account of segregated fund holders 1,639 [11,586-9,675+59-331=1,639]
Investment result for insurance contracts for account of segregated fund holders:

Investment income (loss) on investments for account of segregated fund holders (Note 21) 1,793
Insurance finance income (expenses) (Note 21) (1,793)

Net investment result 1,639
Fee income (Note 16) 7,832
Other expenses (income)

Other income (169)
Operating expenses and commissions (Note 17) 7,995
Interest expenses 552

Total other expenses (income) 8,378 [-169+7,995+552=8,378]
Income (loss) before income taxes 3,930 [2,837+1,639+7,832-8,378=3,930]

Less: Income tax expense (benefit) (Note 19) 461

Total net income (loss) 3,469

Initial Data Related to Salaries and Employee Benefits, or Variable Capital (V)

Salaries, bonus, employee benefits $5,605
Share-based payments (Note 18) 491
Other personnel costs 48
Total employee expenses $ 6,144

Adjustments to Calculations

Why make any adjustments to the calculations used by the authors of the annual report? Marxian economics distinguishes between the actual situation–its essence, if you like–and appearances, which in a capitalist society often differ from the actual situation. Capitalist relations objectively distort the real nature of the kind of situation in which people find themselves. We need to adjust the calculations to transform the deceptive appearances into the actual situation. I will make adjustments according to the order of the above data, with adjustments taking firstly into account only the main categories and then some of the subcategories.

However, it has been my experience that few so-called Marxists bother with exploitation let alone the rate of exploitation. They use the word morally, but it has no analytic value for them. Alternatively, they simply ignore the concept altogether and talk about “class this” and “class that.”

I will no longer be going into detail about various categories and subcategories. I will focus on adjustments that are obviously necessary to make in order to make the calculation of the rate of exploitation consistent with Marxian theory. I invite others to delve more deeply in order to make more refined adjustments.

First Adjustment of Surplus Value (s) (Total net income)

Expenses

Interest expenses 552

The source of interest expenses is surplus value. As I wrote in another post:

In Marxian theory, it is necessary to question whether some expenses are expenses for both the individual employer and for the class of employers (and fractions of their class, such as those who live on interest). When they are expenses at the macro level of the class of employers and not just at the micro level of the particular employer, the expense is deducted from total revenue. On the other hand, there are expenses that are expenses for the individual employer but are not expenses when looked at from the point of view of the class of employers; in such an instance, they are paid out from the surplus value produced or obtained by workers and are to be included in income before taxes.

Accordingly, $552 million needs to be added to “Total net income.”

First Adjustment of Surplus Value (s) (Total net income )

4,482 [3,930+552=4,482]

To make another adjustment to surplus value (profit), it is necessary to take into consideration the data from variable capital (Salaries, bonus and employee benefits). There is no information on “bonus,” so I disregard it. However, the category “Share-based payments” involves adjustments to both variable capital and surplus value. There is one plan called “Employee Share Ownership Plan,” (18B), but there is no final dollar figure for it, and it seems to be available to all employees.

On the other hand, n Note 18, we read the following:

18.C Other Share-Based Payment Plans

All other share-based payment plans use notional units that are valued based on the common share price on the TSX. Any fluctuation in the common share price changes the value of the units, which affects our share-based payment compensation expense. Upon redemption of these units, payments are made to the employees with a corresponding reduction in the accrued liability. We use equity swaps and forwards to hedge our exposure to variations in cash flows due to changes in the common share price for all of these plans.

Details of these plans are as follows:

Senior Executives’ Deferred Share Unit (“DSU”) Plan: Under the DSU plan, designated executives may elect to receive all or a portion of their short-term incentive award in the form of DSUs. Each DSU is equivalent in value to one common share and earns dividend equivalents in the form of additional DSUs at the same rate as the dividends on common shares. The designated executives must elect to participate in the plan prior to the beginning of the plan year and this election is irrevocable. Awards generally vest immediately; however, participants are not permitted to redeem the DSUs until after termination, death, or retirement. The value at the time of redemption will be based on the fair value of the common shares immediately before their redemption.

Sun Share Plan: Under the Sun Share plan, participants are granted units that are equivalent in value to one common share and have a grant price equal to the average of the closing price of a common share on the TSX on the five trading days immediately prior to the date of grant. Participants generally hold units for up to 36 months from the date of grant. The units earn dividend equivalents in the form of additional units at the same rate as the dividends on common shares. Under this plan, some units are performance-based that may vest or become payable if we meet specified threshold performance targets. The plan provides for performance factors to motivate participants to achieve a higher return for shareholders (performance factors are determined through a multiplier that can be as low as zero or as high as two times the number of units that vest). Payments to participants are based on the number of units vested multiplied by the average closing price of a common share on the TSX on the five trading days immediately prior to the vesting date.

Compensation expense $164
Income tax expense (benefit) $ (43)

I assume that the $164 million forms part of the $491 million in share-based payments. As for the “Income taxe expense (benefit)” (in this case, an expense since 43 is in parentheses), I will ignore it since it is unclear whether it forms part of “Compensation expense” (in which case it is already accounted for as a compensation expense) or whether it forms an additional amount (see the brief discussion below concerning the other forms of share-based payments) or whether it has already been accounted for in some other way.

The $164 million received by “employees” is likely related to the exploitation of Sun Life workers. As I wrote in another post (edited to make sense in the context of the present post);

Justification for excluding this compensation from “Total employee expenses” (variable capital) (subtracting it) and adding it to “Total net income ” (surplus value) is grounded in the nature of the employees who receive this amount: this compensation is not mainly for the coordination of the work of others but for the exploitation of others–it is pure surplus value.

Consequently, it is necessary to add 164 to surplus value (profit) or “Total net income” and subtract it from “Total employee expenses.”

Second Adjustment of Surplus Value (s) (Total net income)

4,646 [4,482+164=4,646]

First Adjustment of Variable Capital (v) (Total employee expenses)

5,980 [6,144-164=5,980]

Third and Final Adjustment of Surplus Value (s) (Total net income)

A similar logic applies to the following subcategory of “Share-based payments”:

18.D Share-Based Payment Plans of MFS

Share-based payment awards within MFS are based on their own shares. Restricted share awards are settled in MFS shares and restricted stock unit awards are settled in cash. Restricted share awards and restricted stock unit awards generally vest over a four-year period and continued employment is generally the only service requirement for these awards. Holders of restricted share awards and restricted stock unit awards are entitled to receive non-forfeitable dividend equivalent payments during the vesting period at the same rate as the dividends on MFS’s shares.

Although restricted share awards are settled in shares, all of the MFS share-based awards, including outstanding MFS shares, are accounted for as cash-settled share-based payment awards due to the fact that MFS has a practice of repurchasing its outstanding shares after a specified holding period.

Compensation expense $309
Income tax expense (benefit) $(59)

I asked artificial intelligence what MFS means and whether this payment was for all employees or for management. Here is the response:

1. ✅ What does MFS mean?

In this context, MFS refers to MFS Investment Management, which is a U.S.-based asset management firm that operates as a subsidiary of Sun Life Financial (Canada).

So when Sun Life mentions “MFS” in its financial documents, it’s referring to that specific business unit — not to Sun Life’s overall insurance or Canadian operations.

2. 🧾 Who receives this compensation — management or all employees?

Based on the language you quoted, the Share-Based Payment Plans of MFS are not necessarily limited to senior management, but they are almost certainly targeted toward higher-tier employees, including:

Management and executives

Possibly senior-level professionals or employees in roles tied to performance metrics (common in asset management)

Here’s why:

The awards vest over four years, implying they are retention incentives.

They are called “restricted share awards” and “restricted stock units (RSUs)”, which are usually reserved for higher-level employees.

These are not blanket employee benefits like group insurance — they are performance and retention-based equity compensation tools.

3. 🔁 Why are they accounted for as cash-settled, even though shares are involved?

Even though some awards are settled in MFS shares, they’re accounted for as cash-settled because:

MFS repurchases the shares after a holding period, which eliminates the equity risk for the employee.

This behavior (repurchasing shares) effectively makes the award a cash-like benefit under accounting standards, even though it’s presented as share-based.

✅ TL;DR

MFS = MFS Investment Management, a U.S. asset management arm of Sun Life.

These share-based plans are mainly for MFS staff, not all Sun Life employees.

Likely targeted at management or high-level employees.

They’re accounted for as cash-settled due to MFS’s share repurchase practices.

Again, I am excluding the reference to “Income tax expense.” It probably is included in “Compensation expense.” I conclude this because, if we add up 164, 43 (from the second adjustment of surplus value), 309 and 59 (from the third adjustment), we obtain 575, which is greater than “Share-based payments” (491).

Consequently, it is necessary to add an additional 309 to surplus value (profit) or “Total net income” and subtract it from “Total employee expenses.”

Third and Final Adjustment of Surplus Value (s) (Total net income)

4,955 [4,646+309=4,955]

Second and Final Adjustment of Variable Capital (v) (Total employee expenses)

5,671 [5,980-309=5,671]

The Rate of Exploitation of Sun Life Workers

To calculate the rate of surplus value, we need to divide “Third and Final Adjustment of Surplus Value (s) (Total net income)” by “Total employee expenses” or “variable capital (v).”

So, with the adjustments in place, the rate of exploitation or the rate of surplus value=s/v=4,955/5,671=87%.

I have used various lengths of the working day as 7.5, 8, 9, 10, 11, 12, 13 and 14 because the length of the working day does vary:

It is over 40 hours per week.

8hrs a day

I work between 8-14 hours per day often including weekends.

7:00 – 3:00
Flexible

Flex time – minimum 7.5 hours/day