Montreal, October 18, 2011 – Two bills concerning the financial transparency of union organizations were recently introduced just days apart, one in Ottawa by MP Russ Hiebert and the other in Quebec City by Labour Minister Lise Thériault. A Research Paper published today by the Montreal Economic Institute (MEI) looks into the reasons why the detailed financial statements of union organizations should be disclosed to the public and the ways in which this greater transparency would benefit both unions and unionized workers.
Why unions' detailed financial statements should be made public Private organizations, businesses or charities, rely primarily on voluntary financing. Indeed, no one is forced to make a donation to the Red Cross or to buy a computer, explains Louis Fortin, coauthor of the publication. On the other hand, unions benefit from the equivalent of a power to tax thanks to the Rand formula, which makes the payment of union dues compulsory. A privilege of this kind should be accompanied by greater transparency with regard to the provenance of funds and the uses to which they are put.
More informed union members For 83% of Canadians and 86% of unionized workers, according to a recent Nanos poll, it is important to have a better understanding of the way in which the money from union dues is managed and spent, through greater transparency with regard to unions' financial statements.
"According to the available data, we estimate that revenues from union dues amount to some $800 million in Quebec alone. Even if they already have the right to request financial information from their representatives, unionized workers should have easier, anonymous access to precise information," says Youri Chassin, coauthor of the research paper.
Benefits for union organizations For that matter, such a transparency obligation exists in France since 2008, where the transition took place with the full participation of unions, which saw in the new rules a chance to improve the quality of their governance and the legitimacy of their actions.
"In France, the transparency obligation was part of a joint request on the part of union organizations and employers' associations. By demanding a stricter law themselves, French unions helped remove suspicion with regard to the management of their budgets. It's a strategy that Quebec unions would be wise to consider," thinks Mr. Fortin.
For Michel Kelly-Gagnon, president and CEO of the MEI, a union organization can legitimately want to keep its financial information far from the eyes of the public and of its competitors. "We suggest that union organizations that want to maintain their privacy should have the option of giving up the Rand formula, which is like a power to tax. In this case, they would operate like true private organizations, with voluntary financing and transparency conditions similar to those required of private organizations," he explains.
The Research Paper entitled The Financing and Transparency of Unions, prepared by Louis Fortin, certified industrial relations consultant and associate researcher at the MEI, and Youri Chassin, economist at the MEI, in collaboration with Michel Kelly-Gagnon, president and CEO of the MEI, can be consulted free of charge on this website.
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