Good afternoon, everybody. The committee will come to order.
I have the pleasure of introducing a number of guests here today. From the Industrial Contractors Association of Canada, we have Tony Fanelli, vice-president and manager of labour relations. From Federally Regulated Employers - Transportation and Communications, otherwise known as FETCO, Derrick Hynes, the executive director, is here today. Thank you both for attending today.
From the Canadian Federation of Independent Business we have Daniel Kelly, president and chief executive officer. Thank you, sir, for again appearing. You're our first repeat customer in this Parliament. We didn't scare you too much the last time apparently, or you're a glutton for punishment; we're not sure which. No, I'm just teasing.
Welcome, MP Benson. Thank you for joining us today. I'll acknowledge John when he arrives as well.
We're going to get right into questions. We are back on Bill . Let me ask the witnesses to introduce themselves and give a brief opening. We'll start with Tony Fanelli, please.
Who is the NCLRA? While people in our industry have a pretty good handle on the alphabet soup of organizations that we have, it's a bitter fact that beyond our immediate group, people know nothing about how we are organized and how we bargain. The NCLRA is the acronym for National Construction Labour Relations Alliance of Canada. It is the umbrella group for the various provincial and national contractor associations from across Canada.
We are the unionized contractors, and account for somewhere in the vicinity of 50% or more of the commercial and institutional sectors of construction. We employ roughly half a million workers. Some contractors employ one or two. The companies that I represent, including our own, go from employing hundreds to employing thousands, and back to hundreds again, in an unending cycle of build up and build down. This makes our business very complex and requires us to be able to deploy workers in a way that makes sense. Frequently the difference between success and failure on the job is how we are able to deploy that workforce.
Each provincial and national contractors group represents a significant number of contractor groups. For example, there are 60 contractor groups within Ontario, 32 in Alberta, 35 in British Columbia, and 28 in Saskatchewan. Each of these contractor groups represents from hundreds up to thousands of individual contractors. The contractor associations bargain on behalf of all the contractors with their labour counterparts.
Our various trade sectors have created a complex network of relationships with our union partners. We are almost inevitably one half of the board of trustees of pension funds, health and welfare plans, training trusts, education trusts, industry improvement funds, supplementary unemployment benefit funds, and a host of others. This is where one of the complicating factors of Bill would have arisen. The definitions that amend subsection 149.01(1) of the Income Tax Act are very broad. From the legal opinions our various contractor associations received from their legal counsel, these are broad enough to include both contractor groups and individual employers as labour organizations or labour trusts. Surely that is not what anyone would have envisioned.
Our business is highly competitive. Virtually every job is as a result of a tender process. The successful bidder is required to be the tenderer that offers the best price. I personally have never doubted that the rationale behind Bill was to give our non-unionized competition an advantage. In the bidding process, we are on the training trust funds, the education funds, the industry improvement funds. We make contributions into these funds, and we receive a considerable amount of training support from the training trusts. It is absolutely clear that when the value of our contributions on a trade-by-trade basis, or the support we have from a training fund, becomes a matter of public record, it is a very simple thing to reverse-engineer as to how we've been doing certain work, or how we develop a crew mix, or how we develop or deploy workers, or how we actually manage the work that impacts enormously on our commercial confidentiality. This alone ought to be a significant enough reason to repeal this legislation.
The cost to contractors is really one of the most important issues I want to dwell on. The costs to our contractors in and of itself are massive. In my company, as a general contractor, we hire all trades. We remit to the various trust funds for each of the unions in the construction industry. Each union has four or more such trust funds. There are 16 unions. In some cases, each union represents more than one bargaining group, so our company, which works in six jurisdictions as we speak, will have to file 500 reports annually, and in such detail that some of the reports will be the size of a city phone book. To what end?
If the Construction Labour Relations association of Alberta or the Industrial Contractors Association of Canada are held to be a labour trust and have to make the reports and returns required by Bill , then both our confidentiality and our bargaining strategies are laid open.
This cannot be good for labour relations or good for either party in the labour relations continuum. I've been a labour relations practitioner in Canada for nearly 40 years. During that time there have never been any issues arising in respect of this subject. If this hasn't been an issue in the past, what is going to be gained by such significant public disclosure? That public disclosure will impact thousands of unionized contractors across Canada represented by NCLRA-affiliated organizations.
The view of the contractors is that this is just another competition strategy launched by our most vociferous competition, which hopes to use the power of the Government of Canada so they can come up with unique ways to undercut our bids.
We are also responsible for the privacy of our employees, and the legislation compels us to decide which law we breach: the Income Tax Act or the various provincial and federal privacy laws.
In closing, it might be different if there were some wrong or right in this area, but there simply isn't. The unionized contractors in Canada see no obvious value in any part of Bill , and therefore support the repeal of that legislation under the bill being considered today, Bill .
Good afternoon to all honourable members seated around this table today. It is with pleasure that I present some thoughts to you today on Bill on behalf of FETCO.
For those of you who are not aware, FETCO stands for Federally Regulated Employers - Transportation and Communications. With that mouthful of words, I'm sure you can appreciate why we tend to shorten our name to just FETCO.
FETCO member organizations are all federally regulated firms in the transportation and communications sectors. The common area of interest that binds us together is labour relations under the Canada Labour Code. We have existed as an employers' association for over 30 years. We are essentially the who's who in the federal sector, encompassing over 400,000 employees and representing many well-known firms such as Air Canada, Bell, CN, CP Rail, and Telus, to name just a few. Most of our member companies are heavily unionized and have a long and successful track record of tripartite engagement in federal labour relations, and I'll speak more on this issue a little later.
As you are all aware, Bill will repeal two pieces of legislation passed during the last Parliament, Bill and Bill . FETCO believes that both of these bills resulted from an inappropriate process, one that did not take advantage of a pre-existing and well-established tripartite approach to labour relations.
However, given its significant labour relations implications I will spend my short time with you today focused solely on Bill , the union certification and decertification bill.
FETCO was heavily engaged in the process that brought through the parliamentary process and has spoken on the record on this bill on several occasions. If I can leave but two key messages with you today that sum up the FETCO position on Bill , it would be the following. Please note that I do recognize these appear to be contradictory, and I hope to explain that throughout my presentation.
First, FETCO had and continues to have concerns regarding the manner in which Bill was enacted. Second, FETCO supports the basic principles proposed in Bill .
I'm sure at this point some of you are scratching your heads wondering how we can simultaneously support Bill , but at the same time have concerns regarding the process used to enact it in the first place. Please let me explain.
FETCO has consistently argued in concert with organized labour, I should add, that the process used to enact Bill was inappropriate. Bill C-525 brought in a revised certification and decertification process for all federally regulated organizations via the use of a private member's bill.
While we do not view the use of private members' bills as in any way undemocratic, we do feel they should not be used for changes to the Canada Labour Code. For decades, a meaningful, tripartite, consultative mechanism has existed for such changes, where the three key stakeholders—government, labour, and management—take a deliberate approach to changes under the code and its associated regulations by consulting extensively ahead of time.
Changes to the code should only be considered after a meaningful, upfront dialogue that contemplates all related implications and assesses any change within the greater context of the entire collective bargaining environment. By using this approach via a government bill, a greater degree of rigour is applied to the process. Committees tend to have access to research and analysis and can tap into key internal resources, such as the expertise that exists within the labour program at ESDC and across other government departments.
While a private member's bill does proceed through parliamentary committee and the related process, it does not receive the same level of scrutiny as can be achieved through a meaningful consultation with all stakeholder that is represented by a government-wide approach. We have a system that works. Our suggestion is that we use it.
This brings me to my second key takeaway, which may sound contradictory, but FETCO ultimately did support the basic principles presented in Bill and is supportive of these changes within the federal collective bargaining environment.
If you'll indulge me, I'd like to read into the record today some comments presented by FETCO to the Senate Standing Committee on Legal and Constitutional Affairs when Bill was being contemplated in December 2014:
||Bill C-525 is a private member's bill. In its original form, it was unfairly constituted and prejudicial to unions and employees seeking [union] certification. In its original form, C-525 required that in order for a union to be certified, it would have to demonstrate in a secret ballot vote that the union had an absolute majority of employees in the appropriate bargaining unit as opposed to the majority of employees in the appropriate bargaining unit casting ballots in favour of the union.
||FETCO is [most] pleased that Bill C-525 was modified substantially...by the House of Commons Standing Committee on Human Resources...before passing third reading in the [House of Commons].
||FETCO members prefer a secret ballot vote to a card check system for the purpose of determining if the union is to become the certified bargaining agent for employees. A secret ballot vote is the essence of true democratic choice and is entirely consistent with Canadian democratic principles. It allows each and every employee to express their true wishes without undue influence or disclosure of how they cast their ballot. This is the mechanism that is used for the electoral process in Canada. It is the fairest process.
|| ...Furthermore, this certification process by means of a secret ballot vote based on the majority of votes cast is the standard that currently exists in the labour relations legislation in the provinces of Alberta, British Columbia, Nova Scotia, Ontario and Saskatchewan. It is a widely accepted method to determining certification in Canada. It is not new.
||The provisions in Bill C-525 regarding the threshold number of employees required before the Canada Industrial Relations Board will order a certification vote or a decertification vote is 40%. This is appropriate.
|| These provisions are equally fair and are consistent with the rules for establishing certification and decertification vote thresholds in the various provincial jurisdictions.
|| In sum, FETCO supports Bill C-525 as currently written.
Honourable members, I hope that you now better understand the genuine dilemma that Bill represents and represented for FETCO members. While we objected to the process used to enact it, we certainly supported the final language that was revealed following committee reviews in the House of Commons and the Senate.
Bill contains three key principles that FETCO continues to support.
First, it ensured that a secret vote would be required for all union certification and decertification efforts. The secret vote is fundamental in our democratic society. We cannot think of another approach that is more open and fair to employees when making these important choices.
Second, it ensured that unionization could not be achieved solely by the use of signed union cards. Employees were free to vote their conscience secretly, without fear of coercion. This approach is consistent with the majority of Canadian jurisdictions.
Third, it set the threshold for requiring a vote for certification or decertification at 40% of those that sign union cards. This is also consistent with the majority of Canadian jurisdictions. The 40% threshold is required in Alberta, Newfoundland and Labrador, Nova Scotia, and Ontario. In fact, 45% is required in British Columbia and Saskatchewan.
Bill brought the federal system in line with the majority of other jurisdictions in the Canadian labour relations system covering the majority of employees in the country, and it brought the democratic secret vote. This is why it was and still is, for that matter, supported by FETCO.
Thank you for your time and for the privilege of speaking with you today.
Thank you, Mr. Chair. Thank you very much, members, for being here today.
I am keen to talk to you a little bit about why CFIB is concerned about the changes to the rules that are being contemplated and why we ultimately favoured the approaches that were taken in Bill and Bill .
By way of background, we have 109,000 small-sized and medium-sized businesses as members of CFIB. All of them are independently owned and operated. None of them are publicly traded. These are true independents that are out there trying to make a living against incredible odds sometimes in your ridings across the country.
Union issues are tricky ones for many employers. Most of our members, the vast majority of our members, are non-union right now. Of course, that's true of most private-sector workplaces, as our data shows. Unionized firms in Canada are on the decline. But we did support the rules that were put in place in the two bills, and I want to give you a bit of background as to why we developed those positions.
It wasn't that we loved some of the provisions of Bill . Typically, CFIB is calling on government to reduce regulations, not increase rules and regulations and red tape, so it was a bit unusual for us to support a bill that would add rules and regulations to a sector that currently has, I think, fairly few. The reason we did is to try to accommodate the gap that exists in Canada with respect to the fairness of our union rules relative to their international counterparts. It often surprises people to know that Canada is now the international outlier when it comes to union certification. In virtually every country in the world paying union dues, being part of a union, is a choice. It's not mandatory if there is a certified union in that location. In all of Europe, an employee can opt out of paying union dues. It's part of the European Union rules.
That often surprises people because we think somehow in Canada our union legislation is somewhere between Europe's, which is more restrictive, and the U.S., which might be a little more free. In fact, that's not true at all. Some states do require mandatory dues, as we do in Canada—a decreasing number of them—but Canada is now one of only a couple of countries that still require mandatory dues payment if there is a union in that workplace. That's the real issue that was behind our members' support for these two bills.
That a union can compel people to pay dues, through government law, we believe requires the highest levels of scrutiny, disclosure, and accountability. That's why we liked many of the provisions of Bill . If that were taken off the table—and I'm not suggesting that the government is likely to go in that direction—I don't think Bill , the provisions that are there today, would become necessary if employees were able to say, “I believe my union's doing a good job. I want to pay them dues” or they might say, “Hmm, I'm not sure. I'm going to withhold my dues or threaten to withhold my dues to ensure that I'm getting my questions answered properly from my union”. That is what's behind our support for these measures: the fact that Canada is now an international outlier, whereas perhaps in the past Canadian union laws were more in the mainstream.
Small firms, of course, strongly believe that union members should have the right to opt out of union dues. But I also want to share with you that employees, too, believe that additional disclosure is required. Some Leger marketing surveys suggest that 84% of the public agree that additional disclosure is required.
It wasn't a surprise that the new government has decided to turn back the clock on Bill , but I have to admit it is very surprising that the new government is eliminating the right to a secret ballot vote in union certification. To me, that is the biggest issue that is on the table today.
One of the first things many provincial governments—for example, an NDP government at the provincial level that has been elected with the support of unions—do very early in their mandate is eliminate secret ballot votes in union certification. I cut my teeth on that issue back in Manitoba when a government changed there and Gary Doer was elected many years ago.
This is always a worry for small and medium-sized firms. The very principle of secret ballot votes, which we hold so near and dear in electing you, should be there for choosing whether or not to have a union, especially when that union has the power to compel absolutely everyone in the unit to pay dues whether they wish to or not.
That, I think, is the part I want to leave with you. Our biggest concern about this is the fact that this bill would end the right to a secret ballot vote in all circumstances before a union is certified. Even union members, when polled, believe that votes should be held prior to certifying a union. This isn't just the view of employers, among whom it might not be a terribly big surprise—small employers in particular—but is also, we believe, the view of the general public and of current and past union members.
My final thoughts for you are that as long as dues remain mandatory, requiring unions to provide additional detailed information is certain to bring more transparency and accountability—certainly more costs, certainly more red tape, I don't deny that one bit—and that because secret ballot votes are so fundamental to our democratic processes, we would urge you to maintain them on this very important and sensitive issue in the employer-employee relationship.
Here is a question for Mr. Kelly. I'm a former union member—
A voice: As am I.
Mr. Bob Zimmer: —and one of my concerns when I was a member was that our union dues were used to front certain political campaigns. I was one person who didn't really know where my dues were going. I would see in a paper or I would see in other locations what my union dues were going to support, without knowing the details. We saw the evidence that was there, but we never really understood how much was going to those campaigns.
Considering that most of these public sector unions avoid a lot of taxes—they're associations and so aren't taxed, accordingly—in our minds, when we brought forward this legislation.... I know that the people who brought these measures forward honestly brought them forward to see change in a positive way for folks like me and other members who have the same thoughts I have.
I would just ask you how, in terms of your membership, you square that circle. It hit me really quite hard when I saw supporting.... I'm not saying they didn't support my party and that therefore I'm angry about this; absolutely not. I was a teacher and thought that my classroom was a non-partisan place and that my association should be a non-partisan place as well. To see dues used for political purposes and not fully understand how much was actually going there was a hard circle to square.
Do you have any thoughts on that? How do we make this better from now on? We think we know the direction it's going. How do you make this better for folks like me?
There are some things. One thing that did happen is that I believe it was the previous Liberal government that did prohibit union and corporate contributions to political parties, and our members supported that. Most of our members are incorporated and they supported the idea of banning union and corporate contributions.
It's not so much the contributions. It is all the other ways that unions support causes that then help elect political parties. Certainly at the provincial level we see that happening absolutely every day. For example, unions routinely fly their executives to anti-Israel conferences around the world. There are all sorts of ways that causes, perhaps not shared by their members, are supported through mandatory dues.
Again, I've been asked many times, “What about this legislation as it would apply to my organization, as a voluntary membership group?” Certainly if governments ever chose to do that we would certainly comply. The difference is that for a business association or most groups that are out there, the minute somebody is uncomfortable with the views or the spending on my part or my association's part, they can quit the very next day and they can withhold the most valuable vote they have, and that is their money.
In the current legislative environment in Canada we do not allow that to happen. I have to say, the legislation that exists, which Bill is based on, largely exists today in the United States. Governments, even the current Democrat government, has not eliminated that legislation that exists in the U.S. today, so this isn't brand spanking new stuff.
As I said before, our fundamental issue is that with the power to mandate dues, to force dues through government law, we believe come additional responsibilities. Bill is only one way to do that. The other would be perhaps to prohibit political causes on the part of unions. That is essentially what's behind the legislation in all of Europe. The main reason unions have voluntary membership in all of Europe is to prevent unions from using mandatory dues for political purposes. That's another way that I suppose Parliament could explore.
Sure. There's absolutely no.... Let me say this very clearly. I did say this in my presentation too. There's no question that this bill creates red tape. It creates costs. It requires a giant leap forward in accountability measures, in detailed reporting requirements for unions.
Let me quickly clarify our views on regulation and red tape. We have never come to government to suggest that there should be no red tape and no regulation. We are opposed to red tape, I suppose, but regulation is an appropriate measure for governments to take. Our only request is that the balance of the regulation be fair, that it be in keeping with the need for the regulatory intervention in the first place.
As I said earlier, our first choice with respect to this legislation would be the opportunity for workers in a unionized environment to choose whether to pay dues or not, as exists in every other country in the world save a couple, and only a few states now in the U.S. That would eliminate the need for any measure like the measure that was taken in Bill , so our hope was that these additional measures would be balancing the unprecedented powers that unions have to force the unwilling to pay dues. That is the reason we were in support of this.
I recognize and fully believe that a large number of unionized employees are happy to pay union dues, but for those who aren't, we believe that either they should have the ability to opt out or at the very least additional disclosure should be given to them to allow that to happen. I don't deny any of those things you said. We continue to be huge champions for red tape and regulatory reduction, balanced of course with government's need to regulate in important areas of public policy, but I can square that circle pretty easily.
I'm okay with carving into this time.
The Chair: Okay, let's do that.
Mr. Mark Warawa: Thank you to the witnesses for coming here. I find it interesting that Mr. Ruimy would bring up an 82-page document with data. It's printed off in 82 pages. This is all electronically created. All these figures, the unions know these figures. It's not extra work to create these figures, but he holds up a document that is printed out in 82 pages.
Mr. Dan Ruimy: It's actually a lot more than 82 pages.
Mr. Mark Warawa: I don't see that it's red tape. It's interesting that the minister was presented this same prop, and then she was asked, so what are you proposing, Minister? Are you proposing this? In the United States we know that unions are not burdened with this as a requirement down there. Unions are still able to function, so we said, are you looking for something more reasonable then, or are you absolutely eliminating all transparency, all accountability, and that's what the plan is? It's not that. It's not something less that's reasonable. It's nothing—zero transparency, zero accountability. It's not a good example of where Canada is.
Mr. Hynes, you said you supported the transparency of Bill , and that was the secret ballot. I think that for Mr. Kelly it's the same thing. You didn't support the process, but you supported the outcome.
Given the lack of transparency that's being proposed and the lack of secret ballot, which is a fundamental tenet of democracy, then what is the motive? If this is good what we have for our country, what is pushing the Liberal government to go in this direction? Do you have any input on what might be the motivation? Whose back is getting scratched here?
I think I can accommodate you in much less than 10 minutes, Mr. Chair.
Let me introduce myself in terms of why I'm here and the experience I'm prepared to expose to you, should you want to ask questions.
My career for 42 years has been in labour relations. In 1984 I left a legal practice to join the ranks of the neutrals and became, first, a vice-chair for a year and then then chair of the Alberta Labour Relations Board until 1995. I was there 10 years. I continued as a vice-chair of that board until 2015. I've also served as a vice-chair of the Canada board for three years and, probably of most significance to your deliberations, chaired the 1996 task force to review the Canada Labour Code that resulted in the report, “Seeking a Balance”, which I'm going to make some brief reference to.
That report resulted in fairly significant changes to the Canada Labour Code, enacted in 1998. Those provisions, other than essentially the provisions we are discussing today, have been the framework for Canadian federal labour relations ever since 1998, through to 2016.
I want to speak first about process. When my colleagues and I—my colleagues Rodrigue Blouin from Quebec and Paula Knopf from Toronto—were commissioned to do the task force, we consulted very early with the parties to federal labour relations and on our own experience. We had three board chairs, three experienced arbitrators.
Our view, and the view of virtually everybody we consulted with, was that this was a successful tripartite system. We encouraged the parties to meet together not only to put their briefs forward, but to discuss things at a series of round tables. In a room like this, we had a consensus process that met about 10 times.
Probably the proudest day of my professional career was sitting in a room like this with a federal minister. It had been initiated by Minister Robillard, but it was Minister Gagliano by the time we were done. There were two groups, the representatives of federal employers and the representatives of the Canadian labour movement. They both said to us, and more importantly, to the minister of the day, “We don't agree with everything that is in this report.”
One side disagreed with a couple of things, and the other side disagreed with a couple of things—significantly, one of which was the card system—but both said very clearly and ultimately enthusiastically that it was a package deal, something they could both live with, and a framework that they could buy into and use to administer their labour relations. I believe the bill that came out of that was a successful revision to the Canada code. I think it has worked.
We said in our preamble, if you can pardon me for reading just a bit:
|| We want legislation that is sound, enactable and lasting. We see the too frequent swinging of the political pendulum as being counter productive to sound labour relations. We looked for reforms that would allow labour and management to adjust and thrive in the increasingly global workplace.
We said further on, at page 40, in describing the criteria for reform, that:
||stability is desirable and pendulum-like changes to the Code do not serve the best interests of the parties or the public;
||consensus between the parties is the best basis for advocating legislative change;
||recommendations should be enactable, long-lasting and premised upon the overriding concept of voluntarism.
I won't go on and read more, but we went on at some length, first, about what we thought was the reason we were successful in getting consensus, and second, the importance that consensus plays in a labour relations system. I have not changed my views on that.
I have now been involved in administering labour boards, arbitration, and mediation in the federal and provincial industries. I've done a number of legislative reviews. I still believe firmly, even passionately, that political interventions that are seen as deliberately tipping the pendulum are corrosive of labour relations. They prompt the other side to go away from the bargaining table and common interests, and to pursue political solutions to gain an advantage. That is disruptive of our labour relations system, which ultimately requires both sides to face economic realities head-on and not use legislative advantages to try to defeat the other.
It's a fairly strong expression of views, but it is not simply my personal experience. It is founded on the last 30-year—and I think the most significant 30 years—review of the Canada code, and the people whose laws will be affected.
In my view, the two bills that are repealed by Bill failed to meet that criteria. They both had the air of one side seeking political intervention for more ideological, economic, or relationship reasons, and they have corroded the view that legislative reform at the federal sector is based on the tripartite model.
I have some specific comments, but I'm not going to go through them. I think I'm going to leave them for questions.
I will say one thing, and I think this is very important given the discussion I heard earlier. I heard several comments about every other country in the world. With our American partners, although their system is unique in many ways—unique is perhaps a euphemism—some of their system trumps ours.
Voices: Oh, oh!
Mr. Andrew C.L. Sims: That's a bad joke, isn't it?
The uniqueness of our system compared with the European system is this. You can have two unions in the European workplace, and people can choose which union or no union. You are each elected on a first-past-the-post basis within a constituency. We have a labour relations system based on the same approach. The union represents everybody once elected, and represents nobody if not elected. That is different from the European system. To compare the two without recognizing that difference, I think distorts the debate.
Those are my introductory comments, Mr. Chair.
I'll also keep my remarks brief and obviously my remarks are aimed at the U.S. experience with union financial reporting and with mandatory elections.
To a large extent, the Canadian bills we're discussing were based on the U.S. experience. It's certainly my experience that both the union financial reporting that was introduced during the Bush II administration, which Bill was based upon, and the experience of mandatory elections in the United States have really been a failure and researchers have demonstrated repeatedly that this has not been good public policy in the United States.
I published a number of articles on union financial reporting in the United States, most recently an article last year comparing the approaches of the Obama and Bush II administrations.
As I've said, the law governing union financial reporting in the United States was past in the late 1950s, but what we got in the early 2000s under the Bush administration was a significant departure from past practice, whereby they imposed far more detailed, far more complex, far more onerous reporting burdens on unions in the name of promoting greater accountability and transparency. They clearly have failed to achieve this.
As I've said before, it was those rules that Bill was largely based upon.
The Obama administration has reversed the majority of those rules and has adopted voluntary compliance programs with unions whereby it works co-operatively with unions at the national level to uncover cases of fraud and embezzlement. In fact, it has a much better record than the previous Bush administration in this regard. However, if the goal of the Bush financial reporting role was to impose a much more onerous administrative burden on unions, they certainly achieved that much.
Research done by two senior scholars at Cornell University and Penn State University in the United States—and I can talk in more detail about that research—demonstrated that unions were having to divert a great deal of personnel and of financial resources, and adopting new accounting methods, in order to comply with these new rules. It was, in fact, a very onerous burden that was placed upon unions, and in fact, a very costly burden that was placed upon the federal government, but one that had no apparent benefit for ordinary union members. In fact, I would say it was quite the opposite. I would say that ordinary union members were hurt significantly, because, ultimately, they were the ones who had to pay the cost of complying with these new complex reporting regulations. Union officials, whose time would previously have been taken up negotiating contracts, providing services, and doing other things that union members want them to do, were no longer able to do that. They were instead having to make sure that the unions were in compliance with the new reporting rules.
I think it was clear that the only people who really benefited from these new rules were certain organizations who were hostile to unionization and to collective bargaining. In fact, in the article I mentioned, the comparison of financial reporting under the Obama and Bush administrations, I cite several examples of organizations that are hostile to unions that make clear that they benefited tremendously from these new complex regulations, but ordinary union members did not benefit.
As I said, overall I think it is very clear that the reporting regulations that Bill was based upon were a failure in the United States. They did not bring about greater transparency or accountability. They did not uncover more cases of corruption or embezzlement. However, they did impose a significant administrative burden on unions, and they did prevent unions from providing better services to ordinary union members.
Second, and just briefly, on the mandatory elections.... The United States, of course, has several decades' experience with mandatory certification elections, and it has not been a positive experience. The United States is widely recognized among advanced anglophone countries to have the largest representation gap, i.e., the gap between the percentage of employees who say they would like to have union representation and the percentage of employees who actually have it and who are able to get union representation under the system of mandatory elections.
The person who perhaps has studied this the most is Harvard economist Richard Freeman. I will quote briefly from a study that Freeman did a few years ago. He says, “The gap between what workers want and obtain in representation is greater in the United States than in any other advanced English-speaking country.”
According to Freeman, about one half of non-union workers in the United States desire union representation but don't have it, a figure that is significantly larger than the 25% to 35% gap we see in Canada and in other advanced anglophone countries. Mandatory elections in the United States have not delivered union representation to those workers who want it. In fact, the record in the United States is far worse than it is in Canada or in other advanced anglophone countries.
The other consequence of mandatory elections is that the United States has an appalling record when it comes to unfair management practices during certification campaigns. The organization that has studied this most thoroughly is the Center for Economic and Policy Research, based in Washington, D.C. One of their recent studies estimates that workers were illegally fired in approximately 30% of union certification elections in 2007, and that 96% of U.S. employers engaged in anti-union campaigns of varying levels of aggressiveness and illegality.
Again, these are significantly higher levels than we find in Canada. Anti-union campaigns are not unusual in Canada, but more American employers engage in anti-union campaigns. More American employers engage in illegal actions during anti-union campaigns. In part, this may simply reflect the fact that Canada is a more civilized country, and I am perfectly willing to concede that this is in fact part of the explanation. However, there is also the issue that Canadian employers, because of the mixed system of card-check certification and elections, have far fewer opportunities to engage in illegal practices than do their American counterparts.
I'll finish by quoting from the Centre for Economic and Policy Research study from 2012 I cited earlier, which concludes, “Compared to Canada, many workers in the United States are not able to exercise their right to freely join and form unions and participate in collective bargaining, in large part due to employer opposition, which current labor policy fails to adequately address.”
In conclusion I would say that far from Canada learning from the U.S. experience when it comes to the issues of union financial reporting and union certification, perhaps it's the United States that has much to learn from Canada when it comes to these two critically important public policy issues.
I'll focus my comments on the representation procedures, reflecting my research experience in this area, and will address two aspects of these procedures: the nature of votes, and the academic research on the effect of choice of procedure on certifications.
In terms of the nature of representation votes, first of all, the confidential nature of votes shouldn't be overstated when assessing the reliability of mandatory vote representation procedures. Both employers and the union know which employees voted and which did not, in every vote, and know how many ballots were cast for and against unionization. This encourages employers and unions to draw conclusions about individual employee's choices and likely discourages some employees from voting, particularly in smaller units or where fewer ballots are cast.
Secondly, there is a faulty political election analogy at work here. Mandatory vote supporters commonly rely on a political election analogy founded on the view that certification votes are analogous to political campaigns and elections. The attraction of this argument is understandable, appealing as it does to ideas of free speech and informed choice and workplace democracy, but it's a false analogy.
The nature of union representation is not analogous to government power or political representation, and as a result, the nature of decision-making in a union vote is not analogous to that in a political election. First, the nature of the decision is different. Certification doesn't transform the employment relationship. It simply introduces the union as the employee's agent for the limited purpose of bargaining and administering any collective agreement that the union may be able to negotiate. The employer's overriding economic authority over employees continues in any event.
Secondly, there is no non-representation outcome possible in the political context. In political elections citizens vote between two or more possible representatives. There is no option to be unrepresented, so as Becker, for example, has pointed out, if union representation elections were to be analogous to political elections, then it would be a vote among different collective employer representatives with no option for non-representation. That's simply not the system that we have anywhere in Canada.
Finally, in terms of cards being a reliable measure of employee support, it's often contended that votes more accurately indicate employees' desire for union representation than cards, suggesting that card-based certification fosters union misconduct to compel employees to sign cards. Although this is possible, there is no evidence, either in academic studies or in the case law from jurisdictions that use this procedure, that it is a significant or a widespread problem. Anecdote isn't evidence, and certainly it shouldn't be a compelling basis for legislative change in the face of a lot of academic research finding that mandatory vote systems have negative effects on labour relations and that employer interference in certification is indeed a significant and widespread problem.
In terms of the academic research on the effect of the choice of procedure—vote versus card-based certification—you're likely already familiar with a lot of this so I'll be relatively brief and leave it largely to your questions if you want to go into more detail on these particular topics.
First of all, studies have consistently concluded that mandatory vote procedures in Canadian jurisdictions are associated with statistically significant reductions in certification application activity, including certification success rates. This is in the order of about 20 percentage points. Reduced organizing activity—that's applications as well as certifications—are found to be concentrated in typically more difficult to organize units where we're talking about weaker and more vulnerable groups of employees. The increased opportunity for delay and for greater opportunity for employer unfair labour practices are identified in the research as contributing to these effects.
Just on some earlier comments querying how it could be that employers could engage in unfair labour practices or anti-union activity in the vote procedure, it's clear how this can happen.
In every case, in a vote-based procedure, the employer is notified by the labour board that a certification application has been made. It then has the period between that notification and the date of the vote. In most jurisdictions in Canada, in all but two, there is a deadline for that vote. It's between five and 10 working days. Under the Canada Labour Code, there is no deadline for that vote.
This provides ample time for employers to engage in anti-union campaigns. Anecdotally I've heard of five-day plans where it's advertised what the employer must do on each of the days, for example in the five-day period in Ontario between the application and the vote, to defeat the certification. There's no evidence there isn't sufficient time for employers to respond between the application, the notification, and the vote.
Secondly, there's quite a bit of research on delay in the vote process. Representation votes, by requiring a vote in addition to submitting evidence, necessarily result in a longer certification procedure. It has been found that it significantly reduces the likelihood of certification where there's either no time limit—as is currently the case under the Canada Labour Code and other federal legislation—or the time limit's not well enforced. This is in the order of 10% to 32%.
These studies concluded that a combination of enforced statutory time limits and expedited hearings for unfair labour practices was necessary to satisfactorily offset these negative effects. Neither of these are currently available.
Delay should be a real concern under the current provisions, and it is something that Bill would in part address.
In terms of employer interference, the vote-based procedure gives employers a substantial opportunity to seek to defeat the organizing attempt. There are numerous studies showing this is not only widespread, but effective. A large percentage of managers surveyed in some of these studies admits to engaging in what they believe to be illegal unfair labour practices to avoid union representation.
Survey evidence by Lipset and Meltz has also found in Canada that non-union employees expect employer retaliation and expect anti-union conduct by employers. Research by Mark Thompson at UBC has found that Canadian employers are no less anti-union in their attitudes toward unions than U.S. managers. That is something also to keep in mind.
In terms of remedying employer interference, the dilemma with the mandatory vote procedure is that, on the one hand, quick votes are seen as necessary to protect employees from inappropriate employer interference, and on the other hand, holding a vote quickly might not allow labour boards an opportunity to effectively remedy employer unfair labour practices. The vote can be held before the unfair labour practice can be heard and a remedy awarded.
Employees require greater protection from employer interference under a vote system. These include access to expedited unfair labour practice procedures and more substantial interim remedies, but such necessary protections were not provided by Bill .
I'll make a comment regarding the Bill changes. Disclosure is already required for unions for all bargaining unit employees. I'd also like to echo Mr. Sims' comments that in Europe there is a very different approach to labour relations. The difference in the approach to disclosure and to union finances is embedded in a very different labour relations system. The Canadian and U.S. system is, in the broader international perspective, an extremely unique labour relations system, and it's inappropriate to consider transplanting one specific element of an interwoven very different system.
In closing, the Bill proposed amendments reversing the Bill and Bill changes, particularly to representation procedures, are a change that better protects employees' decision-making about collective representation.
Thank you very much. It's good to be here, Chair, and good to meet all of you as well. I haven't had a chance to say hi to everyone, but thanks for having me today.
Thank you very much to our witnesses for spending some time with us today.
Andrew, I want to ask you some questions first. I kind of want the Canadian input.
We've talked a lot today about employers and unions, but we haven't talked a lot about union or potential union members. I think what this really should be about is what is best for union members.
From what I've heard from residents of my constituency, whether they're in carpentry or mining, or pipefitters in the oil and gas sector, they liked what was in Bill and Bill . It could certainly be different in other communities. We did some pretty substantial polling, and we saw that well over 80% of union members supported the changes that were in these two bills.
I'm wondering if anything has been done more recently. I think our poll was 2014. How do we come up with saying we don't want these things, when the word we're getting from union members is that this is something they do want?
I have experience with both systems, because in 1988 the Alberta labour code switched from a card system to a secret ballot system. I was certainly of the view that to make that work it was essential to have very early votes, no more than 15 days from the application for certification. I carried that experience with me when we went through the federal review.
Remember, the federal jurisdiction, though it's not obvious from the income tax provision, is limited to what I call the trains and boats and planes jurisdiction. Your bargaining units are largely huge cross-national bargaining units, and the voting system is a very impractical, time-consuming process. Frankly, though I'm quite open to both systems, in the federal system, based on the consultations we had, it wasn't worth the candle. It wasn't giving you more democracy. It was giving you much more delay and much more cost, and it wasn't anything that the parties we consulted with—not only labour and management, but the public as well—saw as a major issue. Management was in favour, and we recognized that in the report.
I want to say one more thing about the vote system that hasn't been mentioned. We did make a very significant change to the Canada code. Certification is only one step. The major step with unions and management is the decision to take a strike or lockout, and in 1998 we introduced a mandatory strike vote. That vote has to happen before you have the major feature of industrial action. Nobody is talking about that, but that is the main check, that employees support the union in the crucial position they're taking. That was new and that has worked well.
Thank for the great presentations this afternoon.
Professor Slinn, I just have a few questions. Earlier Mr. Zimmer stated that he was a member of a union. I guess it was a B.C. union. Are there not laws in Canada already in place that make it a requirement for unions to provide the information that Mr. Zimmer was talking about?
In fact, I think there are Canadian laws already about transparency. I'm just going to quote this. Federally and in eight of 10 provincial jurisdictions—B.C., Manitoba, Saskatchewan, Ontario, Quebec, New Brunswick, Nova Scotia, and Newfoundland—unions are required to provide financial information to their members, either by request or automatically, each year. In B.C., Ontario, New Brunswick, and Newfoundland, financial statements must be audited and provided to members on an annual basis.
Can you comment on that, please, Professor Slinn?