08/22/2012 10:22 EDT | Updated 10/22/2012 05:12 EDT

CAW members vote to merge into super-union with CEP

Canadian Auto Workers delegates have voted unanimously in favour of merging with the Communications, Energy and Paperworkers Union of Canada in a move that would create the country's largest private sector union.

Thousands of delegates cast their ballots on the proposal Wednesday at a CAW convention in Toronto. If created, the new union would represent about 325,000 workers across roughly 20 economic sectors, primarily in manufacturing, communications and transportation.

The two unions say the merger comes in response to multiple attacks on the country's labour force, including several pieces of back-to-work legislation passed by the federal government.

CEP members will vote on the merger proposal at their convention in October.

"This new union has the potential to change the way workers are represented in this country, bringing about stronger democracy in the workplace and greater community involvement," CAW national president Ken Lewenza said after the vote.

"This union will pose a serious challenge to the unrepresentative, unfair economic and political systems workers now find themselves caught in."

Dave Coles, president of CEP, said the merger would be good for both unions.

"Bigger is not necessarily better. But a bigger and better union is better, and that's what we're going to build," adding that the CEP and CAW have worked together previously and have a similar past.

Before the vote, Lewenza said it would be difficult for the CAW to part with its name, one that is familiar to many Canadians.

"But it's a name," he said, adding that a new approach to organized labour is needed in light of what he calls the government's attack on unions in recent years.

Last week the CAW opened up contract talks with the big U.S. automakers, including GM, Ford and Chrysler, in what is expected to be some of the most difficult negotiations in years.

The union, which made concessions on wages, vacation time and other benefits when the car companies were struggling during the 2008-09 recession, has said it wants to share in the profits now that the industry has rebounded.

The automakers have said their focus during the negotiations will be to improve competitiveness at their Canadian operations, where labour costs are higher than in the United States.

Poor performance on exports

News of the merger follows comments made by Mark Carney at the CAW's meeting in Toronto in which the governor of the Bank of Canada said exporters face more challenges than the soaring value of the loonie

The CAW has been critical of the central bank's monetary policy for the rise of the dollar and Lewenza said it makes Canadian autoworkers less competitive than their U.S. counterparts.

Carney acknowledged Canada's poor performance on exports such as automobiles in recent years. Canada ranks second-worst in the G20 over the last decade, with only nine per cent of exports going to fast-growing emerging markets such as China and India.

He said some blame should be placed on the strength of the dollar but said it wasn't the most important reason.

"Over the past decade, our poor export performance has been explained two-thirds by market structure and one-third by competitiveness," Carney continued. "Of the latter, about two-thirds is the currency while the rest is labour costs and productivity.

"So, net, our strong currency explains only about 20 per cent of our poor export performance."

He also said over-reliance on trade with the U.S. is partly to blame.