Ontario’s Tories take on the Unions — and It’s About Time

Commentary, Workplace, Frontier Centre

Recently the Toronto Star has been entertaining its readers with a series of stories on how work gets done at the Toronto District School Board: $143 to install a pencil sharpener, $2,900 to install an electrical outlet, that kind of thing.

The work is performed by members of the Maintenance and Construction Skilled Trades Council, with whom the TDSB is required to contract for virtually all such projects. But even outside contractors, where they are permitted, must kick in a portion of their wages in "dues" to the Trades Council, much as the TDSB's in-house construction workers must.

The Trades Council's president, Jimmy Hazel, is unapologetic. Asked by the Star about the electrical outlet, which took four hours but for which the board was billed 76, Hazel replied, "we don't need to f—ing prove anything to anybody about costs."

No, indeed. This is perhaps an extreme example, but it illustrates a more general principle. Unions are unique among private organizations in Canada in that they have been assigned what amounts to the power to tax: to collect dues, via the usual paycheque deductions, not only from their own members, but also those who exercise their legal right not to join the union, who are nevertheless required to pay the same dues as if they had — an arrangement known in Canada as "the Rand formula."

Of course, this applies only within the minority of Canadian workplaces that are union shops: just 16 per cent of private sector workers now belong to unions, a figure that has declined over the years as output and employment shifted to non-unionized firms and sectors. But in the public sector, where membership is still north of 70 per cent, unions have the power not only to tax their members, but — thanks to the state's monopoly in the provision of many public services — the taxpayers as well. So Hazel is right: he really doesn't need to f—ing prove anything to anybody.

So ingrained is this status — the Rand formula has been with us for more than 60 years — that it is little short of astonishing to see a major political party in Canada proposing to challenge it head on. Yet that is what the Ontario Progressive Conservative party has just done. The party's white paper on "Flexible Labour Markets" proposes a raft of reforms to the province's labour laws that would, taken together, give Ontario the freest workplaces in the country.

Amid a number of measures — outside supervision of certification votes, a leaner mandate for the Ontario Labour Relations Board, the right to opt out of the provincial workers' compensation system in favour of private insurance — two stand out. The party would abolish the closed shop in public tendering, opening the bidding to all contractors, union and non-union alike. More radically still, it would abolish the Rand formula. Workers would no longer be required, either in law or in collective agreements, to pay dues to an organization they chose not to belong to.

In the main, these are long overdue reforms. Whether or not the Rand formula is a formal violation of the Charter right of free association, it has always struck me as unjust. I know the argument: that if workers were not required to pay dues, they could "free ride" on union-negotiated benefits. But unions, I say again, are private organizations. It is not the government's obligation to enforce cartel discipline on their behalf, at the forced expense of individuals who may well dispute that their activities are to their net benefit.

Still, there's no arguing this would do much to undercut the power of unions, which will be deeply upsetting to those of the conviction that unions are all that stand between the population and penury: notwithstanding that unions today are a disproportionately white-collar, upper-educated, public-sector phenomenon. The contrary view — as in the 23 U.S. states with "right-to-work" laws (to which, the paper notes, more than 5 million Americans have migrated in the last decade), as in Australia, New Zealand, and some European countries — holds that prosperity is not ultimately based on coercion, but on productivity. While unions can command a premium over market wages (about 8 per cent, according to Canadian research), that is generally sustainable only where competition is constrained — to the cost of consumers and/or taxpayers.

In any case, monopoly is not an option for Ontario. However much certain sections of opinion might wish it, the province cannot actually force people to invest in it: it must persuade them. Sensible labour policies are a necessary part of that effort. The PC paper represents the first acknowledgment by any Ontario party of the kinds of deep, structural changes the ailing province is going to need if it is to turn around its fortunes.

It is particularly gratifying seeing PC leader Tim Hudak pick up this mantle. Under his leadership the party ran a dispiriting, cynical campaign in the last election, avoiding substantive differences with the governing Liberals in favour of a string of populist gimmicks — and squandering a double-digit lead. That disaster has clearly taught him, and them, a lesson. Since the election the party's message has been notably sober-minded and constructive.

It is as if they mean to make a case to the public for why they should be elected, rather than the other guys defeated. In Ontario's current straits, the public might just be in the mood to listen.