The problem with unions
Conservative MP Russ Hiebert is spearheading a debate in Ottawa about the transparency requirements of unions. His private member's bill, C-377, would impose new public reporting requirements for unions. (Chris Roussakis/QMI Agency)
One reason the Quebec student protests were so well organized last spring was that the students got financial help - tens of thousands of dollars - not only from Quebec unions but from others across the country.
Unions can get involved in such causes because they have huge financial resources - far more than the budget of all the business associations in Canada combined, by the way. For example, in Quebec alone unions collected $800 million in dues in 2008, the last year for which numbers are available. The amount for the whole of Canada is in the billions.
The student protest was only one of the countless ways in which unions supported a specific movement or ideology and tried to influence politics this year. In and of itself, I think it's fair for unions to do this with voluntary contributions from their members toward such causes. But most of the time, the public will never hear about it.
Even union members may not know how their dues are being spent. And they have no option of opting out if they oppose the particular ideological causes they are forced to fund.
A debate is currently taking place in Ottawa about the transparency requirements of unions. Parliamentary hearings will soon begin on Bill C-377, a private member's bill sponsored by MP Russ Hiebert that would impose new public reporting requirements. These include annual financial statements, salaries paid to top union officials, expenditures over $5,000, and the amount of time spent on lobbying and political activities.
Canada's union leaders have mounted a well-organized and well-funded campaign against the bill and we hear there is currently intense lobbying in Ottawa to dilute it.
Before my current job at the Montreal Economic Institute, I worked as president of the Conseil du patronat du Québec, the province's main employers' association.
My counterparts were the union leaders. This is one reason I have been following this issue closely. I know from experience how much firepower unions can muster. And they don't come out with the big guns unless they have good reasons to do so. I believe it shows how scared they are.
But it is interesting to note that a 2011 Nanos Research poll found that 83% of union members agreed that unions should be required to disclose how they spend their dues.
In a democracy, transparency is the natural counterpoint of compulsory financing. This all relates to the compulsory nature of union financing, known as the Rand Formula. Simply put, if you work in a unionized workplace, you must contribute to the union - even if you choose not to become a member.
It is, in effect, an indirect power to tax given to unions, and it is enshrined in the law.
In addition, unions enjoy various tax breaks: a tax credit for union dues, a tax exemption for strike pay, as well as tax credits to labour-sponsored funds.
Yet union leaders consider themselves exempt from this transparency obligation.
But they cannot have it both ways: that is, enjoy the benefits incurred on them by the public trust and simultaneously argue that they have no public reporting obligations.
I think unions should be given two choices: give up the quasi-public financing benefits stemming from the Rand Formula (thus becoming genuine private organizations) or submit to the transparency requirements of Bill C-377.
Michel Kelly-Gagnon is president of the Montreal Economic Institute (www.iedm.org). The views reflected in this column are his own.