by Michel Kelly- Gagnon
Those who live in Quebec have probably seen the ”golden meters” publicity campaign from Hydro-Québec’s union, which opposes the introduction of electricity meters allowing consumption to be read remotely. There’s also a coalition (the ”Sans-Chemise”) that demands changes to employment insurance during federal election campaigns, or the ”Social Alliance” of union and student organizations that defends a certain view of public services.
In Ontario, Working Families, a group supported by several union organizations, made the headlines by attacking the Conservatives during the recent election campaign, as it did in the 2003 and 2007 campaigns.
These are examples of unions engaging in political activism and spending compulsory union dues which they collect for purposes without any direct connection to the negotiation of working conditions, and sometimes, against the wishes of some of their members.
It is impossible, however, to have an overall picture of these activities and of the portion of dues allocated to political and ideological causes because unions’ financial statements do not need to draw such distinctions, and only need to be provided to members who request them. For example, it is ironic, to say the least, that a Canadian journalist had to consult a U.S. government site that publishes unions’ financial information online in order to discover the advertising expenses of the United Steelworkers at the last NDP congress here in Canada.
Yet with the Rand formula, and given the other tax privileges they enjoy, unions wield an indirect power to tax the employees they represent, a power that is granted to them by the Labour Code, and hence by government. Other than governments, unions are among the rare organizations that can count on such compulsory financing. Private businesses and charitable organizations must always depend on voluntary financing. It makes sense, then, for the unusual financial privilege of the Rand formula to be coupled with at least as much financial transparency as is required of public organizations.
At least, that’s what 83 per cent of Canadians and almost 86 per cent of unionized workers believe. Indeed, in a Bill 33 eliminating union placement of employees in the construction industry would also force unions in this sector to make their financial statements public.
We can only applaud these timely initiatives that respond to the wishes of the population and of union members in particular. Unionized employees will of course be the primary beneficiaries of reliable financial statements that are easily and anonymously accessible. They will also be clearly informed of the ways in which their union dues are spent.
On the other hand, a union organization could legitimately want to keep its financial information far from the eyes of the public, and far from its competitors, too. This option should be provided for by law, but in this case, the union should finance itself like other private organizations, which is to say on a voluntary basis, and therefore should renounce the Rand formula.
The special privileges enjoyed by unions must be accompanied by increased responsibilities. In other words, the compulsory financing power of the Rand formula must be counterbalanced by greater transparency from unions toward their members and the population at large.
(Michel Kelly-Gagnon is President and CEO of the Montreal Economic Institute. This article, which was first published in the Huffington Post on October 14th, 2011, is reproduced with the MEI’s permission.)