Prior to about two decades ago, labour's financial innovations worldwide were predominantly small in scale and focussed on industrial and workplace democracy or the distribution of wage-related benefits to workers. These objectives have since been overtaken by concerns about the mounting consequences to national societies of cyclical and structural changes in the global economy since the early 1980s.
Increasingly, union leaders everywhere are expressing the need for more productive investment to aid national wealth generation, economic growth and development. Such investment, they have surmised, must be ascertained if existing jobs are to be protected and new jobs created. Furthermore, it is argued that a fresh effort is required with new and alternative financial tools - influenced by labour - that are well-resourced enough to make diversified, high risk investments with long time horizons. This is all the more important in the current global environment of financial liberalization where capital is very mobile, but, according to some economists, may not necessarily be available to meet specific national priorities.Endnote 3
With the exception of wage earner funds and a few additional vehicles, so far only the mobilization of collectively-held pension savings is sufficiently large in scale to give labour in many countries the opportunity and ability to shape macro-economic outcomes. This may be increasingly true as fragmentation and differentiation of national labour markets make comparable strategies more complicated for unions to undertake.Endnote 4
To repeat, Canada's labour movement has less experience than others with the organization of savings, investment and capital formation. Many Canadian unions remain skeptical about the American ESOP system and some ill-fated versions of employee financial participation and ownership. Only recently has worker ownership been more seriously considered, given the demonstrated utility of buyout transactions to preserve employment in restructuring industries, among other things.
For different reasons, even less attention has been paid to harnessing the investment power of pension plans in Canada, though the $750 million Vancouver Land Corporation, run by several jointly trusteed pensions, is a prominent exception.
Like their counterparts abroad, however, some senior Canadian labour leaders were convinced of the appropriateness of more direct capital market involvement in the wake of the 1981-83 economic recession and continuing high unemployment. In Québec, for example, labour was alarmed by permanent employment losses, plant closures, production and investment relocation, and other blows to the economy unseen since the depression of the 1930s. These circumstances led Louis Laberge and other leaders of the Fédération des travailleurs et travailleuses du Québec (FTQ) to search for alternative ways of fostering Québec economic development.
Unlike labour abroad, however, the FTQ proposed a completely new vehicle. After studying international models for collective capital formation, the FTQ designed the first labour-sponsored investment fund - the Fonds de solidarité - with a domestic reference in mind. The Fonds de solidarité derives from Québec capital markets and, more particularly, the Régime d'épargne-actions du Québec (the Québec Stock Savings Plan) which gave individual investors a tax deduction on the public offerings of Québec- based small business. Laberge said that the then sitting Parti Québecois government should co-operate in providing another program that was more clearly beneficial to non- traditional investors, such as workers.Endnote 5