Canadian Rand Formula vs. US Free-Loader

| February 20, 2013


The Conservative attacks on workers’ collective rights are focused on undermining the financial capacity of workers’ organizations. The goal is to destroy the ability of unions to fight for the interests of their members at the bargaining table and in the political arena.


In Canada, union dues are seen in a similar light as taxes. Since everyone benefits from public services provided by government, it would be unfair for some to be able to opt out of paying for those services through taxes. Similarly, in a unionized workplace everyone benefits from the work of the union in negotiating and enforcing collective agreements, which means that everyone (whether they are a member of the union or not) pays their fair share. This system of dues was established through the Court of Canada Justice Ivan Rand in 1946 and is known as the Rand Formula.

The Conservative attacks on unions are focused primarily at the resources that workers pool through dues to their union.

Union dues help fund an infrastructure that supports bargaining through direct bargaining assistance, research, lobbying and policy work to ensure that members have the best support and conditions to bargain fair contracts.

The first attack on the ability of workers to pool their resources in a strategic way was Bill C-377. This law forces unions to expose their resources to employers. Concretely, it means that besides bogging down union resources by forcing even the smallest union locals to fill-out piles of paperwork, employers will also know how much is in a strike fund or how many resources the negotiating workers have to support them. However, no such laws force employers to expose any of their finances, giving them an unfair advantage during negotiations.

The next step called for by many Conservative politicians is to bring in US-style free-loader policies that allow workers in unionized environments to opt-out of paying dues. US Republicans and Canadian Conservatives call these “Right to Work” laws, but the laws are mostly about undermining union infrastructure and support for workers at the bargaining table as seen in a comparison between free-loader and compulsory check-off states. These free-loader states generally have lower wages and incomes ($1,540 a year less), higher poverty rates (2.5% higher), less education investment ($1,540 a year less), and bigger problems with health and safety compliance.

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