The Canadian Auto Workers Union and the Communications, Energy and Paperworkers Union of Canada said the two groups must join forces in order to ensure protection for existing members and inject some life back into the national labour movement.
A 16-member committee of representatives from both unions unanimously urged the organizations to formally merge by 2013 in a report tabled on Wednesday.
The recommendation is still subject to approval from both unions, which will vote on the proposal at their respective conventions later this year.
"We view the New Union Project involving the CAW and the CEP as a part of a broader process of renewal and revitalization for the labour movement as a whole," the committee wrote in its report.
"The formation of a new, larger union, incorporating improved practices in all areas of our work (organizing, bargaining, and activism), can be part of a necessary response to a historic challenge facing workers and their unions."
The report traced the roots of those challenges back to the 1970s, when it says growing hostility towards organized labour began surfacing in most western countries.
Trade union membership as a share of total employment has slid 10 percentage points to 30 per cent since the late 1970s, the report said, adding the situation is even more pronounced in the U.S. where fewer than seven per cent of workers are union members.
The general global antipathy has shifted to "attacks on unions and collective bargaining" under the Harper Conservatives, the unions argued, citing several pieces of legislation that forcibly ended labour disputes at Canada Post, Air Canada (TSX:AC.B) and Canadian Pacific Railway (TSX:CP).
"The new union will have a particularly strong presence in federally regulated sectors such as communications and transportation," the report reads.
"Here we are on the front lines of the federal government's assault on labour rights and are well-placed to respond."
Both unions said they had discussed the need to find creative solutions to engage its members in labour-related causes. The proposed merger, they said, was the product of those discussions.
"By combining the workplace experience of our members with our dealings with management and our ongoing relationships with governments, we are uniquely positioned to argue for industrial strategies that promote good jobs and sound economic development," the report said.
The new union would represent more than 300,000 workers across roughly 20 economic sectors. Most of the membership would be concentrated in manufacturing, communications and transportation.
While the bulk of the membership would come from the private sector, CAW and CEP said the new entity would also represent some public sector employees working in health, education and transit roles.
Ontario would be the hub of activity in the new union, which would have half its membership based in that province.
The new organization would be named only after the merger has gone through, but the committee has spelled out many details of its potential structure.
Existing chapters of the CAW and CEP would remain as chartered locals of the new union and would report to five regional councils across the country.
The organization will feature a 25-member national executive board consisting of representatives of the various industries, races and regions under the union's purview.
National dues have been set at 0.7 per cent of a worker's regular salary, roughly in line with CAW members' current rate and slightly lower than the rate of 0.8 per cent currently paid by CEP members.
The union will also have a strike fund of more than $135 million to provide support to those caught up in work stoppages, the report said.
Revenues will also be funnelled into organizing and educating current and future members, it added.
The CAW is set to vote on the proposed merger at its convention later this month. CEP members will weigh in when they meet in October.
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