The densities of unions in Canada are facing a significant decline. The density of unions in Canada has witnessed a decline to 31.5% in 2012 from 33.7% in 1997. The reason behind this decline is the spill over effects of unfavourable labour policies in US. This imposed a major challenge for the unions who faced issues at legislative front, political front and jurisprudential front. The Bill of federal Conservative (Bill C-377) imposed requirements of expanded financial reporting on the officers and unions of labour organisations. It was often argued that the bill did not help in modifying the relationship between employers and unions of labour organization. Although some policy makers argued that Bill C-377 brought a major shift in relation to labour policy in Canada by introducing the ‘right to work’. According to the right to work, union workers were not required to become the members of the union irrespective of the benefits they received from being part of the union. But the jurisdiction in Canada used the formula given by Rand instead of the right to work system. This formula became the key tenet of the labour policy of Canada. It stated that whether the employees are members of the union or not, they benefit from the collective bargaining agreement of the labour union. The Rand formula directly relates to the principles of majoritarianism and exclusivity given by Wagner. According to this principle, all the members forming an integral part of the collective agreement should contribute to the dues of the union.
The union in U.S opposed the free trade agreement (FTA) of 1989 between Canada and United States and the North American Free Trade Agreement (NAFTA) of 1994. In the view of the unions, these trade arrangements did not take into account the rights and needs of the workers. This in turn weakened the cultural and social welfare measures in Canada. Since the time NAFTA was adopted, labours faced the consequences in terms of employee layoff, downsizing of the firm, and job transfers out to non-union employers. The economic environment in Canada was not friendly to the labours especially because the federal and provincial government had introduced cuts in the budget which threatened the workers in the public sector. Nevertheless, the unionization of labour continued to be active politically by organizing themselves in the private service sector including retail stores, banks and restaurants.
In addition to this, the Bill C-377 was not itself the legislation on right to work as it did not suggest to modify the approach of collecting dues of the union. This can be easily understood through the following example: Daniel Kelly, the president of the Federation of Independent business of Canada propounded in a meeting on concerning the bill – If a member of my association at any time feels that the spending of the association is not appropriate or has doubts about the channelizing of funds, then the member can quit as and when he or she feels. The main idea was that such associations should have completely voluntary membership fees.