Bill C-4 will make unionization in Canada less democratic, weaken the financial accountability of unions

Recently, Charles Lammam, the Fraser Institute’s director of Fiscal Studies, testified to the Senate Standing Committee on Legal and Constitutional Affaires about Bill C-4, which would change union voting rules in federally regulated industries in Canada. Below is a transcript of his testimony.

Thank you Mr. Chairman and the committee for the opportunity to participate in these important discussions about Bill C-4.

I’m the director of Fiscal Studies at the Fraser Institute—a non-partisan economic policy research and education think-tank. The mission of the Institute is to measure the impact of government policies and to communicate to average Canadians how those policies affect their lives and the lives of future generations. My comments today reflect my own opinions and observations of the research we have conducted. I do not speak on behalf of anyone else at the Fraser Institute.

In my view, labour relations laws should aim to balance the interests of workers, their collective representatives, and employers. Unfortunately, our research has found that labour relations laws in Canada, particularly at the federal level, are generally not balanced and favour union organizations at the expense of workers.

Instead of empowering workers to hold their union representatives accountable, Bill C-4 will make the process of unionization less democratic and weaken the financial accountability of unions.
 
Under existing legislation, which was brought into force by Bill C-525, workers in federally regulated industries are guaranteed the opportunity to vote anonymously through a secret ballot when deciding whether to approve a union as their representative. Seven of 10 provinces have a similar rule for provincially regulated industries.

Bill C-4 would move federal legislation away from what has increasingly become the norm in modern Canadian labour relations laws by returning to the old “card check” system—a process that allows unions to be certified without holding a secret ballot vote if a sufficient number of workers sign up as union members.

Forgoing a secret ballot vote is problematic because automatic union certification may not reflect the true desire of a majority of voting workers. Without the anonymity of a secret ballot, union organizers may pressure workers into supporting union certification. Any dissention or disagreement can become confrontational, especially in cases where unionization is controversial. And some workers may be uncomfortable publically voicing their opinion for or against unionization.

A mandatory secret ballot certification vote provides the same basic protection of anonymity that all Canadians enjoy when electing politicians. Allowing union certification without a secret ballot vote runs contrary to the goal of empowering workers.

Bill C-4 would also make it more difficult for dues-paying workers to hold unions accountable once a union is certified. It is important for a labour union to be accountable and responsive to the demands of its members and dues-paying workers because the primary purpose of a union is to represent the interest of unionized workers—specifically in negotiations and disputes with an employer.

The financial disclosure rules currently on the books, although not enforced by the federal government, require unions to publically disclose key financial information such as expenditures, revenues and their financial position. This disclosure, if enforced, would make it easier for unionized workers and interested third parties to gauge the financial health and operations of the union.

Like secret ballot voting for union certification, the financial disclosure rules espoused in Bill C-377 promote principles of anonymity, democracy, and accountability. And research shows that increasing financial transparency contributes to improved governance and reduced corruption.

Critically, current financial disclosure rules require unions to report details on how much money and time are spent on activities not related to worker representation such as political and social causes. This is particularly important because unionized workers in Canada can be forced to pay full union dues as a condition of employment, even if they disagree with the causes the union supports. Requiring unions to disclose how money is spent at least allows workers to more easily and anonymously learn how much their union spends on such causes. This is a critical reason why increased financial disclosure is needed in Canada.

In closing, I want to note that research shows balanced and unbiased labour relations laws can help create the conditions for a jurisdiction’s improved economic performance—including increased investment and job growth. Part of a balanced set of labour relations laws is empowering workers to democratically certify unions and hold unions accountable once certified. Bill C-4 works against these objectives.