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Report of the Financial Review Committee

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CMG FINANCIAL REVIEW 2008

EXECUTIVE SUMMARY

The Canadian Media Guild is currently spending slightly more than it needs to meet all of its obligations

under the 2008 budget. The National Executive Committee has trimmed spending but dues income at the CBC is declining. Other branches are increasing and we have added one new contract at Canwest TV, which means more dues as well. But the increases will not offset the decline at least in the short-term.

One of the budget obligations is a contribution to the Defence Fund. The Bylaws and TNG Constitution require us to contribute 7.5 per cent of our dues revenue. We cannot do that this year. We will be perhaps $180,000 short based on recent estimates. Our Defence Fund now stands at around $1.7 million. That is about $1 million more than its lowest level in recent memory at the end of the CBC lockout. But it is still almost $800,000 short of the $2.5 million we had at the start of the lockout and what the NEC believes is the minimum comfort level as we prepare for CBC negotiations in 2009.

The Defence Fund is our piggy bank. We use money from it to pay for things that crop up unexpectedly. We put money in it each year to pay for negotiations and legal. But it becomes crucial during labour disputes. It pays for immediate help for location units and branches that need to prepare for a strike or lockout. It does not directly cover strike pay. That comes from the CWA Member Relief Fund or, in the case of the first week of a dispute, from a loan we can request from The Newspaper Guild/CWA. But the Defence Fund does cover things like Life Insurance Premiums for workers who are insured with their employer and who would face losing coverage during a strike or lockout. It must pay for office operations and staff salaries and legal costs during a longer dispute if enough members are on the street, such as a dispute at the CBC, and dues income is significantly affected.

This financial review was born out of a request from some CBC Location Units seeking more money. It was expanded because it is impractical in an organization as complex as ours to look at one element such as Location Unit financing and not take into consideration the impact any change will have on other areas.

Since the last convention, small Location Units have been receiving an extra $1,000 a year. The committee looked at that and agreed to recommend that the $1,000 be made permanent, even though it is one of the additional cost items that keeps our budget from being balanced this year.

After reviewing all the financial challenges facing CMG, which we go into in detail this report, we have outlined the alternative approaches to tackling those challenges which must be discussed and make recommendations.

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ALTERNATIVES GOING FORWARD Do nothing and see what happens. There is a body of opinion that suggests we do not need to contribute as aggressively as we have to the

Defence Fund. Without those contributions, our budget would be balanced as long as we maintain the spending pattern we have adopted this year. To be clear, the bylaws and TNG Constitution would require contributions. But we have in the past withdrawn more from the fund for anything that was related to defence of the collective agreement. Such a broad interpretation kept the Defence Fund from growing. We also used the income from the fund in some years to supplement our operating revenue, a practice the NEC and the committee agree may not have been prudent management.

Increase dues. Our dues are 1.55 per cent of all compensation, capped at $1,500 per member per year. Increasing dues to

1.65 per cent, for example, would cost someone paying $1,000 a year an additional $64.50. It would generate approximately an additional $300,000 a year. The issue with generating additional revenue, as we have found in our research, is it has always gone into staff increases or increases in programs and services offered to members.

Raise or eliminate the cap The $1,500 cap means that anyone making slightly less than $100,000 and up is not paying 1.55 per cent,

they are paying proportionately less. Eliminating the cap would generate more money but a large percentage would come from a handful of very highly paid individuals. Raising it by $100 increments would generate roughly an additional $20,000 each year for the first few years. The return diminishes as the cap increases and the additional amount increasingly comes from a smaller pool of members.

Reduce spending Spending reductions to date have been made without any major change in operations. Additional cuts could

be made if we make structural changes either in staffing or the way some of our larger budgets are allocated. That means spending much less at the Branch level, Location Unit level or less on activities such as education and advocacy. None of these may seem attractive to members since we want to create a strong and mobilized membership. Making cuts like these seems counterproductive to that goal. But we recognize that we must establish priorities and stick to them and rebuilding the Defence Fund prior to the next round of CBC negotiations was established by the NEC as a high priority item.

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Organize more aggressively We believe in organizing to bring in new members and have done so successfully in the past. There is a cost

but there is also a benefit, although the smaller the group organized the smaller the benefit. We continue to believe in organizing and, if CBC management continues along its current path of reduction, we must organize or face the prospect of trimming operations more than we have so far to cope with declining revenue as our membership also declines.

Apply a special levy to rebuild the Defence Fund The Bylaws give the NEC the power to do this on an emergency basis. The maximum is $5 per member per

month. Rebuilding the Defence Fund could be deemed an emergency. But it is a judgement call and rather than make such a decision, the committee felt the issue needed to be placed before this convention. Simple math suggests that such a levy would generate more than $25,000 a month. Spending restraints must remain place to ensure the money accomplishes what is intended.

Order the combo platter Mix and match. One alternative alone seems unlikely to deal with all our issues. For example, any increase

in dues, we felt, would have to be accompanied by an increase in the cap so that it was shared by all. And if rebuilding the Defence Fund is a goal, it appears unlikely spending restraints can be dropped for the short term at least.

RECOMMENDATIONS

1. The committee recommends that the bylaws be amended to change the quarterly floor for Location Unit Remittances to $500 from the current $250.

2. The committee recommends that the current dues cap of $1,500 per member per year be phased out. In addition, the committee recommends that it be removed from the Bylaws of the CMG. The formula for phasing it out would be a $100 increase each year for 10 years. At the end of the 10-year period, the cap would be eliminated. This will require a referendum of all members since the cap is contained in the dues section of the Bylaws and it can only be changed by referendum.

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3. The committee recommends that this Convention request the National Executive Committee to implement a $5 levy per member until mid-2009 to help rebuild the Defence Fund, and ensure spending is controlled so that the money accomplishes this goal.

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CMG Financial Review

FAQ

The Committee Q: Why was the committee formed? A: This review committee was formed in response to resolutions passed at the Calgary Convention in 2006 and a resolution at the National Executive Committee meeting in November 2007 which expanded it to include CMG dues structure. Q: What is the committee’s mandate? A: To compile information pertaining to the dues income structure and the expenditures of the CMG, to identify any major areas of concern, to provide possible options to deal with these concerns, and to supply this information to the membership and especially their elected representatives, so that informed decisions on the financial future of the CMG can be made. Q: Who are the committee members? A: Scott Edmonds, CP, National Executive Council (NEC) VP (Chair of committee) Marc-Philippe Laurin, CBC, President of CBC Branch Executive Council (BEC) Rick Basarke, CBC, Secretary-Treasurer of NEC Jonathan Spence, CBC, CMG Trustee Gaynette Spafford, CBC, LEC President, Saskatoon and BEC Director, Prairies Harry Mesh, CBC, LEC President, Gander/Grand Falls and BEC Director, Atlantic Michelle Smith, CW Television, Secretary Treasurer Q: The Calgary Convention in 2006 called for this committee’s report one year from that convention. It is several months late. Why? A: Some key members appointed to the original committee have resigned and/or retired since it was formed. There have been three CBC Branch presidents in this time. Arnold Amber left, to be replaced temporarily by Pierre Claveau who was in turn replaced by Marc-Philippe Laurin. In addition, CMG National, Branch, and Local elections as well as a time-consuming move of the CMG office prevented the committee from meeting until early this year.

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Our Dues Structure Q: How much dues do we pay now, and how is it determined? A: We pay 1.55% of our gross pay, defined in the CMG bylaws. This includes basic pay, premiums, overtime, and any over-scale payments (such as Additional Remuneration, or AdRems). For a person making $60,000 per year this works out to $930 per year. This dues payment is income tax deductible in Canada. Q: Who pays dues? A: Anybody doing bargaining unit work at any of the various organizations that fall under CMG jurisdiction. This includes freelance, permanent, temporary, and part time employees. The only exceptions are those members of new Branches that have yet to achieve a collective agreement. Q: How does our dues rate compare to other organizations of similar size and geographical scope? A: We pay less than some but more than others. This is covered in a separate document in this report. Q: How much of an increase in dues would be required to make a difference? A: An increase of 0.1% would generate about $300,000 per year. Q: What must CMG do before dues can be changed? A: The CMG Bylaws require that any change to dues be done through a referendum of all CMG members. Q: What is the dues cap that we sometimes hear discussed? A: The CMG Bylaws that define our dues payment formula provides an upper limit of union dues of $1500 per member per year. Based on the dues rate of 1.55%, an employee making $96,774 will pay the maximum dues amount of $1500. An employee making in excess of $96,774 will pay no dues on the extra income above that amount. Q: If the cap does not apply until a gross income of $96,774, is it really an issue? A: We do have a number of members that make in excess of this amount. Also, as annual negotiated cost of living increases are applied to members’ wages, more people approach or exceed that cap. Q: How can the dues cap be changed or eliminated? A: Like dues, the cap would have to be changed through referendum.

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Q: Why do we have a dues cap? A: Historical reasons only. Our research shows we have always had some form of cap, required at the time either by our bylaws or by the Constitution of The Newspaper Guild, which also applies to us. There is no current requirement for the CMG to maintain this cap, if we choose to change or eliminate it by bylaw amendment through referendum. Q: I’ve heard that the CMG can apply a “Special Levy” charge to its members. What is this and how does it work? A: The bylaws state that the National Executive Council (NEC) may in an emergency situation levy a pro-rated assessment of no more than five dollars ($5.00) per member per month. A higher amount than that would require a referendum. Q: What constitutes an emergency for this purpose? A: This is at the discretion of the NEC. However, it is intended to be a temporary solution for short term financial difficulties that may prevent the CMG from properly defending its collective agreements and caring for its members. Such a move would not be undertaken lightly, or without sufficient input from the membership through their representatives. Q: How much money would be raised by this special levy? A: We have about 5200 members. Based on a $5 per month per member levy, this would equal $26,000 per month or $312,000 per year. Funding of Location Units Q: What is the formula that determines how much funding Location Units receive? A: The CMG bylaws state that Location Units get a dues rebate of 3.5% of all dues collected from the Location’s members, with a minimum of $250 per quarter paid to each Location Unit. As well, a temporary resolution passed at the Calgary Convention in 2006 gave Small Locations (those with less than 50 members) an additional $1000 per year until the 2008 Convention where the matter is to be reviewed. This committee’s work includes providing the necessary information for this discussion at the convention.. Q: How can this formula be changed? A: By a CMG Bylaw amendment as provided by Article 15 of the CMG bylaws. This would require appropriate notice and either a vote of delegates at a National Convention or a referendum of all members. Defence Fund Q: What is the Defence Fund?

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A: Actually, there are four “Defence Funds” at various levels of our union that help our members. The CMG fund (the one spelled Defence as any good Canadian should know) is the only one we control entirely. It is used to pay for many things during a labour dispute, including staff salaries and union operations if dues are not coming in to do the job. Other items include things like dental and insurance premiums for those who are insured through their employer, as well as hardship cases. The CWA operates two funds, a Defense Fund which supports some strike-related activities and a Member Relief Fund that provides Strike Pay. The newspaper Guild/CWA has a Defense and Mobilization Fund that provided $100,000 to help mobilize members at the CBC prior to the lockout. Our per-capita payments partly go to pay for our participation in these valuable funds. Q: How much money is in the CMG Defence Fund? A: $1.7 million dollars. Q: That sounds like a lot of money. Is it enough? A: Prior to the CBC lockout the Defence Fund was $2.5 million. During the lockout we spent about $1.8 million from the Defence Fund. The NEC would like to see this fund at least back at $2.5 million especially with another round of CBC bargaining beginning soon. Q: Why are we unable to rebuild the defence fund from general revenues? A: The CMG’s expenses have increased substantially in recent years. Many factors have contributed to this. More detail is available elsewhere in the report. However, unfortunately, while expenses have increased revenues have actually declined. The CMG is trying to obtain data from the CBC to see why dues revenues are down. New Branches have joined the CMG, and are paying dues now that they have collective agreements, but the decline in dues from existing membership has outpaced the dues revenue from new members so far.

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INTRODUCTION This review flows from a resolution passed at the Calgary Convention and a resolution at the National Executive Committee meeting in November 2007 which expanded it to include CMG dues structure. (See Appendix i) We were asked to take a look at the money taken in by the Canadian Media Guild and how it is spent and whether what we take in is still adequate to do the work that needs doing. It was a large task and it was delayed by things like our move and CMG byelections and elections. The turnover meant we went through three CBC branch presidents on the committee before we found one we liked enough to keep (that was a joke and enjoy it, because there aren’t a lot of laughs to follow). In the end, we had representatives of three branches (CBC, The Canadian Press, Canwest TV) and both larger and smaller Location Units (CBC Toronto, Saskatoon, Gander-Grand Falls/Ottawa/CP Prairies). The members of the committee were Treasurer Rick Basarke, Vice-President Scott Edmonds, CBC Branch President Marc-Philippe Laurin, Gander-Grand Falls President Harry Mesh, Saskatoon President Gaynette Spafford, CBC Toronto Treasurer Jonathan Spence and Canwest TV Treasurer Michelle Smith. We were assisted by staff in gathering research and also did our own research to paint as clear a picture as possible of our union and how it compares to others in Canada.

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BACKGROUND The Canadian Media Guild is an unusual beast that has been around and evolving since 1949-50, when we began as The Canadian Wire Service Guild. We are a union local, like thousands across Canada, yet we have members who stretch from coast to coast in our two oldest branches, The Canadian Press and the CBC. Our members are all employed by media operations but they vary greatly. In many ways we are unique and it is difficult to find comparables. (Appendix ii) We have private companies such as Canwest TV and CJRC (which is part of the Corus radio chain and, we hope, the beginning of a private radio branch). Two of our newest branches, Reuters Canada and The Canadian Press are news services but quite different. The Canadian Press is a non-profit co-operative that includes large and small newspapers across Canada (again with the exception of Canwest), as well as most of the country’s radio and television stations. Reuters is a small part of a huge, profit-driven media and financial empire that employs thousands worldwide. The CBC and TV Ontario (now split into separate French and English services much like the CBC) are public broadcasters. So is the Aboriginal Peoples Television Network and all three often are held hostage by politics of one sort or another. Most of our roughly 5,200 dues-payers (a full-time equivalent number we use because of the large number of freelancers and temporary employees) have permanent, full-time jobs but we represent hundreds who have a more tenuous of employment connection through our Freelance Branch.

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We have a duty to represent all as effectively as we can, wherever they live, whatever their employment status. We have built a national structure to do this, which includes both elected, unpaid advocates and paid staff representatives and administrative staff members.

MY HOW YOU’VE CHANGED CMG has grown substantially. The following three snapshots show just how much we’ve grown in the last 20 years or so. 1986 The Canadian Wire Service Guild: Membership: Approximately 900. Most of the members almost evenly split between the CBC and The Canadian Press (smaller wire services such as UPI, Reuters and AFP add perhaps 20 together). There are 11 CBC Location Units and eight CP Location Units. Dues: 6.5 per cent of one week’s regular salary per month. (This includes a 1.5 per cent special assessment for the hiring of an administrative officer.) Staff : Administrative Officer, Jerry MacDonald, one or two support staff Office: 232 Merton St. Annual income: around $700,000 Defence Fund: $1.3 million 1994 The Canadian Media Guild Membership: about 4,000 (producers, support staff and ACTRA members at the CBC join CWSG and name is changed) Dues: 1.55 per cent of all pay ($960 cap not in the bylaws)

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Staff: AO’s Dan Oldfield, Dale Heckman, Kathy Viner: support staff, Silvia Cavaco, Sonya Sharma Office: 144 Front St. West Annual income: around $2.5 million Defence fund: $2 million 2008 The Canadian Media Guild Membership: 5,200 (4,700 card signed members) (includes former CBC CEP members, freelancers, new units, at TVO, APTN, Canwest TV, S-Vox) Dues: 1.55 per cent of all pay ($1,500 cap in the bylaws) Staff: Staff reps, Glenn Gray, Bruce May, Rick Warren, Gabi Durocher, Keith Maskell, Gerry Whelan, Dan Oldfield, Kathy Viner. Communications co-ordinator, Karen Wirsig, union service co-ordinator Jean Broughton, office co-ordinator Glenn Seymour, comptroller Sonya Sharma, travel co-ordinator Margaret Sullivan, membership data co-ordinator Elizabeth Northrop, executive assistant Guylaine Morency, paid CMG president, paid CBC president Office: 310 Front St. West Annual income: almost $5.6 million Defence fund: $1.7 million As you can see, our staff has grown significantly as the complexity of our membership has increased. Our spending has kept pace with our increasing income but our Defence Fund has remained relatively static and has not grown significantly since the days when we had 900 largely editorial members at the CBC and The Canadian Press. The following graph shows that clearly (Fig 1).

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Fig. 1

1998 - 2007 Revenues/Expenses/Defense/Dues

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

DUES INCOMEDEFENSE FUNDTOTAL AVAILABLE FOR OPERATIONSTOTAL EXPENSES

(The bulk of the Defence Fund was created after 1976 when the first agreement was signed at CP and the Local’s membership almost doubled, prior to the addition of new members at the CBC. The fund is used to pay for some supplementary benefits during a labour dispute, such as life insurance and hardship cases. It also must defray the cost of operations if and when our dues income is reduced because of a labour despite. During the 2005 lockout we spent about $1.7 million from the Defence Fund. The NEC has agreed we should substantially increase the Defence Fund. Ideally, it should contain one year’s operating budget, more than $5 million. Our short-term goal was to get back to about $2.5 million by 2009.)

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THIS IS ABOUT THE MONEY

As we enter 2008, we are expecting somewhat less than $5.8 million in dues for the entire year, down from more than the $5.9 million we received from our members in 2007. This was largely due to a reduction in the amount we receive from members at the CBC Branch, which is expected to generate around $4.85 million in dues revenue in 2008. The decline would be even greater were it not for the fact that our members at Canwest TV now have a contract and are paying full dues, and dues income from other branches, such as The Canadian Press, have increased. We are continuing to explore why CBC dues income is declining but have no indication yet that it is simply a mistake which, when corrected, will restore dues to their former level. Our income may be declining but our expenses are not. Our staff compliment remains the same as in 2007 and we are even looking at ways to hire another staff representative in 2008, flowing from a resolution at the last convention. Our annual operating costs are increasing due to the move to new, fully accessible premises. We have investments but the income they generate remains within the funds. This is something that has not always been the case. Not too many years ago we spent everything we received in dues on our operations and sometimes a good part of the income our investment funds generated as well. But we recognized during the CBC lockout that it is necessary to have a strong Defence Fund and decided we cannot divert income from those investments to pay for current operations.

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That means our current dues rate of 1.55 per cent of all earned income per member (capped at a maximum of $1,500 a year) is our only guaranteed source of revenue. Our dues have been expressed differently over the years but they have remained relatively constant, only the cap has changed. It was increased from about $1,000 to the current $1,500 through a series of phased hikes over the last few years. Dues The dues we receive (Appendix iv) must pay our staff, our rent and other office costs, fund the operations of our National Executive, national committees, the various branches and their committees and, in the case of CBC and The Canadian Press, our Location Units. A portion goes to CWA Canada to pay for its operations and to pay for our participation in the international strike fund (The CWA Members’ Relief Fund) and Defence Funds at both the CWA and TNG/CWA level. We benefit from those funds on a regular basis. Prior to the last dispute at the CBC, the TNG/CWA Mobilization and Defence Fund gave us $100,000 to mobilize our members at the CBC. Some of our dues money has to go back into our Defence Fund, which was severely depleted during the lockout, and some has to be put away to pay for organizing and collective bargaining. Bargaining can be a very large expense - about $1.5 million in the case of the last round of CBC negotiations - and we have what we call a pre-funding formula that sets aside money every year to help pay for bargaining at our branches. Otherwise, when bargaining costs spiked, we would not have enough money in our budget to cover them without sacrificing other things. The following pie graph shows how our budget breaks down.

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2007 Expenses grouped by Budget

Education - 3.17%

Negotiations - 3.41%

Trans. To Locations - 3.81%

Capital Expend - 4.24%

Office General - 5.65%

Other - 6.01%

Salaries & Benefits - 30.84%

Legal - 7.11%

CBC Branch - 7.95%

Per Capita Remits - 22.14%

General Travel & Meetings - 1.36%

CP/BN Branch1.34%

Account/Consult - 2.97%

Fig. 2

Other includes the following budget items each less than %1.34 of the budget TVO Branch Reuters Branch Lockout Expenses Staff Prof. Development & Misc Arbitration Freelance Branch Organizing CMG Bi-Annual Convention CMG Pubs & Communications Other National Committees Service Operations, West Translation Other Activities Advocacy Service Operations, Ottawa Other Conventions Service Operations, East

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While we attempted to compare CMG and other unions of comparable size both in terms of what they take in and what they spend (Appendix ii), we found that direct comparisons were difficult because of the unusual nature of our Local. In general, however, the snapshot we took revealed that our dues rate is fairly average, perhaps even a little below average, and our staffing level is also comparable to other organizations of similar size. Our costs, however, with a membership that is spread widely across the country (and both north and south as well as east and west) are often much higher because of greater travel costs.

WHAT WE HAVE TO SPEND VS. WHAT WE DECIDE TO SPEND We basically have two classes of expenditures: our fixed expenses, rent, salaries etc., and others which are more discretionary, such as travel by executive members and the money spent by national committees. We spend $3 million alone on our staff and in payments to CWA/SCA Canada, which helps support the national structure and also covers our contributions to the CWA strike fund and defence fund and the TNG/CWA Defense and Mobilization Fund. Some things, such as the amount we are required to put away each year for organizing or the amount we are required to contribute to our Defence Fund, are contained in our bylaws or the Constitution of TNG/CWA, our

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parent union. We must contribute one dollar per member per month to organizing, as per the TNG Constitution and we must contribute 7.5 per cent of our income to our Defence Fund. Location Units The amount Location Units receive is also specified in our bylaws. As a result of the resolution at the Calgary Convention the amount small Location Units (those under 50) receive was increased by $1,000 to a minimum of $2,000. That was done because there was pressure at the last convention to increase the amount smaller Location Units receive so they would still have enough money to do what they must to keep members mobilized. The committee agrees and is recommending a permanent increase in their funding in the bylaws. But it also researched the issue and found some things which my require follow-up. A snapshot of all Location Unit finances in December showed they collectively had around $250,000 in the bank (Appendix v). There did not appear to BE a cash crisis for many and a survey of units conducted as part of this review (Appendix iii) did not turn up a large list of projects they felt they should undertake but could not afford. Some, however, seemed to believe they should receive additional revenue for activities normally covered by the remittances at other Location Units. This may show a need for better education as to what LU remittances are designed to cover.

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Also, while it is entirely up to the discretion of Location Units to spend the money as they see fit, some also pay honorariums to executive members while others do not. There is a limited pot of money within CMG and it all comes from members’ dues. There must be accountability at all levels for how it is spent and some consensus on expenditures. Branches Branches set their own budgets, in a process of consultation with the National Finance Committee. The largest of these is the almost $400,000 set aside for our largest branch, the CBC, in 2008. This is almost $40,000 less than the CBC branch spent in 2007. The Canadian Press is next in size although dwarfed by the CBC Branch at around $50,000. Freelance is next at $15,000 and the others are smaller still. Most of the other branches have only one location and receive a Location Unit remittance. For that reason, they branch budgets are often largely unspent (and result in lapsed spending at the end of the year) but taken together this year that would yield less than $15,000 in savings over the budgeted amounts. National Committees National Committees also set their own budgets but they too must go through the National Finance Committee and then be approved by the National Executive Committee. The largest of these is that of the Education Committee, which was set at $145.000 for 2008, also a reduction from 2007.

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The Convention This convention is expected to cost $400,000 this year and is a major cost driver for the deficit and one reason the budget isn’t balanced this year but is a cost of running the union that must be accounted for. The NEC is considering including a pre-funding amount for the Convention in every year’s budget so that it doesn’t have to come as such a heavy hit every other year. (There is a CBC Presidents Council meeting in the off year which is paid for from the Branch budget.) The Deficit Even with budgetary restraint measures, we are forecasting a deficit of almost $181,000 at the end of 2008 which means our Defence Fund will not grow as we had hoped and need as we prepare for another round of CBC bargaining. Spending on things such as education and Branch and NEC activities often involves travel. Travel, with a membership spread across a large country, eats up a lot of our budget. But some of that isn’t discretionary and must be spent to administer our collective agreements. If we want members outside of Toronto to sit on joint committees at the CBC and The Canadian Press, for example, we will have a travel bill. Steps have been taken to improve the cost efficiency of travel. Our legal expenses for things like arbitrations also can be quite high and we are looking for ways to bring them down. Fig. 3, which follows, shows what we spend broken down by the nature of the expenditure.

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2007 Expense Review Cash Basis - grouped

Staff Costs - 30.01%

Per Capita Remits - 22.14% Travel Related - 15.53%

Legal - 7.27%

Other - 5.02%

Consult. ex computer - %2.97

Wage Replacement - 3.04%

Office General/Rental - 3.20%

Trans. to Location Units - 3.81%

Capital Expenditures - 4.24%

Office Operations - 1.66%

Miscellaneous - 1.32%

Other includes the following categories each of which represent less than %1.32 of the budget: Translations Honoraria/Hires Meeting Facilities Printing Union donations/fees Phone - Cellular Mobilization Communications Other Stuff

Travel includes the following categories: Other Transport Air Travel Hotel Accomodation Meal Allowance and per diems Face to Face & Committees

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WE’VE GOT ISSUES Clearly CMG has challenges, both short and long-term. 1. Staffing: We hired one new staff member in 2007, our case co-ordinator. The NEC has also approved the hiring of a senior managerial staff member to help direct our growing staff but this position has not been filled and the need for it must be re-examined. The Calgary Convention mandated that we hire another staff representative to focus primarily on equity issues. We are still exploring ways of getting alternative funding to make this possible. 2. We have moved into a new office which is costing us more both in terms of annual operating expenses and in terms of new equipment and furnishings to make full use of the new space. The move cost about $300,000 (we will receive some of that, around $125,000, back from our landlord) and our rent is more than $50,000 a year higher on average as a result and will continue to increase.

3. We have to rebuild our Defence Fund, which we learned during the lockout is critical to ensuring we can function effectively during a labour dispute. We came very close to draining the fund during the last dispute.

4. Is our current dues rate of 1.55 per cent adequate to meet all the demands members are placing on our union? We have a finite amount of money coming in each year but there seems no limit to the number of

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often good and constructive ideas that members have for things our union should be doing. The problem remains though, how do we pay for them?

5. Is the dues cap fair? Should it be eliminated or increased? Our dues have been capped since the first major merger of CBC unions in 1994. The current cap is $1,500.

This then is the framework we need to work within as we take a look at CMG’s finances. How do we best serve the needs of our members with the resources we have? Or, do we need to increase our resources to take care of the needs of members in the 21st Century.

ALTERNATIVES

These are the alternatives we considered. The first is basically do nothing and see what happens. The committee did not feel this was the best alternative but recognize that there is a body of opinion that suggests we do not need to contribute as aggressively as we have to the Defence Fund. Without those contributions, our budget would be balanced. To be clear, the bylaws and TNG Constitution would still require contributions. But we have in the past withdrawn more from the fund for anything that was related to defence of the collective agreement. Such a broad interpretation kept the Defence Fund from growing. We also used the income from the fund in some years to supplement our operating revenue which the committee did not feel was prudent management.

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Increase dues. Our dues have remained relatively constant for decades, although the way they are expressed has changed somewhat. They remain at 1.55 per cent of all compensation, capped at $1,500 per member per year. Increasing dues to 1.65 per cent, for example, would cost someone paying $1,000 a year an additional $64.50. It would generate approximately an additional $300,000 a year. The issue with generating additional revenue, as we have found in our research, is it has always gone into staff increases or increases in programs and services offered to members. Virtually none has gone towards the Defence Fund. Raise or eliminate the cap. The $1,500 cap means that anyone making slightly less than $100,000 and up is not paying 1.55 per cent, they are paying proportionately less. Eliminating the cap would generate more money but a large percentage would come from a handful of very highly paid individuals. Raising it by $100 increments would generate roughly an additional $20,000 each time. although after a few years the additional amount would come from fewer individuals. From the data we analyzed, at most removing the cap would negatively affect around 300 people right now. As salaries increase, however, more people benefit from the cap.

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Reduce spending. Spending reductions to date have been within the current envelope. Additional cuts could be made if we make structural changes either in staffing or the way some of our larger discretionary budgets are allocated. That means spending less at the Branch level, Location Unit level or less on discretionary activities such as education and advocacy. Both have been trimmed significantly and entirely eliminating both from our budget would still not quite deal with this year’s deficit. None of these options seems attractive since we want to create a strong and mobilized membership. Making cuts like these seems counterproductive to that goal. But we recognize that we must establish priorities and stick to them and rebuilding the Defence Fund prior to the next round of CBC negotiations was established by the NEC as a high priority item. Organize more aggressively. We believe in organizing new members and have done so successfully in the past. There is a cost but there is also a benefit, although the smaller the group organized the smaller the benefit. We continue to believe in organizing and, if CBC management continues along its current path, we must organize or face the prospect of trimming operations more than we have to cope with declining revenue as our membership declines. Apply a special levy to rebuild the Defence Fund. The Bylaws give the NEC the power to do this on an emergency basis. The maximum is $5 per member per month. Rebuilding the Defence Fund could be deemed an emergency. But it is a judgement call and rather than make such a decision, the committee felt the issue needed to be placed

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before this convention. Simple math suggests that such a levy would generate more than $25,000 a month. Order the combo platter Mix and match. One alternative alone seems unlikely to deal with all our issues. For example, any increase in dues, we felt, would have to be accompanied by an increase in the cap so that it was shared by all. And if rebuilding the Defence Fund is a goal, it appears unlikely spending restraints can be dropped for the short term at least.

CONCLUSION There you have it. There are no miracle cures and you can’t have your cake and eat it too. Clichés are often true. We have to make choices. The NEC has been making those choices over the last two years between conventions. It decided not to hire a new staff representative because it could not accomplish that and the move to a new accessible building within the current financial envelope. It has reduced spending on the education program because it is one of the largest discretionary items in the budget and it has kept the CBC Branch budget from growing as large as the Branch would like, because the money is not there. The NEC has directed as much money as possible into the Defence Fund and good investment returns (at least until this year) have helped keep the

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fund growing. We know that the market is not generating those returns this year although our fund is still doing better than most. The NEC can and will take what steps it deems necessary to rebuild the Defence Fund to as large a level as possible prior to 2009. But if there is a will to spend more on other priorities, the additional funding must come from the membership. The Committee is submitting three recommendations for consideration.

RECOMMENDATIONS

1. The committee recommends that the bylaws be amended to change the quarterly floor for Location Unit Remittances to $500 from the current $250.

2. The committee recommends that the current dues cap of $1,500 per

member per year be phased out. In addition, the committee recommends that it be removed from the Bylaws of the CMG. The formula for phasing it out would be a $100 increase each year for 10 years. At the end of the 10-year period, the cap would be eliminated. This will require a referendum of all members since the cap is contained in the dues section of the Bylaws and it can only be changed by referendum.

3. The committee recommends that this Convention request the

National Executive Committee to implement a $5 levy per member until mid-2009 to help rebuild the Defence Fund, and ensure spending is controlled so that the money accomplishes this goal.

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Appendix i Calgary Convention Resolutions: #15 - Small Location Units – Extra Funding 2006 Be it resolved that until the next CMG convention, the secretary/treasurer be directed to forward those small location units an additional one thousand dollars ($1000) per year. #16 - Location Unit Financing Be it resolved that until the next CMG convention, the Secretary-Treasurer be directed to forward an additional 1.5% of dues to the Location Units. Following a brief debate, Resolution #16 WITHDRAWN #17 - Financial Review Be it resolved that this convention directs the national executive committee to put in place a process to study CMG finances, including location unit financing, with a view to having a policy document report prepared within one (1) year, and circulated to allow branches and location units time to consider the matter so the issue can be debated fully at the next biennial convention. Nov 24-25, 2007 NEC meeting M/S Perkel/Malo that the NEC approve Recommendation #1. That the NEC establish a committee to examine the CMG dues system, including a comparison to other union locals of similar size. It will also be necessary to examine their staffing levels and structure (are they national in scope, one location etc.) in order to have meaningful data emerge. Since we already are committed to a financial review for presentation at the upcoming convention, this could form part of it. It would also ensure that dues are not being examined in isolation from other factors such as spending, staffing, transfers to branches, Location Units, committees, etc

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Appenxdix ii:

SUMMARY

We would like to preface this section by indicating that dues rates are a closely guarded secret in the Union

world. Most of the Unions contacted were very hesitant providing little detail or chose not to share with us information about their organizations, staffing and dues structure. We wish to acknowledge those that did in order to help us prepare the following chart.

The chart represents a sampling of Canadian Union organizations, some of similar size and geographical

scope to the Canadian Media Guild; a few with less members organizations but the same scope as the CMG. You will notice that three Unions selected for comparison with the CMG, are components of the Public Service Alliance of Canada. Although part of the larger PSAC, each component operates independently within the PSAC much like the CMG does within CWA-SCA Canada and the larger CWA. We felt that this allowed us to make some comparisons between the CMG and the organizations listed below in respect to size, scope, staffing and dues structure.

The CMG is actually one “national local” of the larger CWA-SCA Canada (and The Newspaper Guild/CWA) with location units and branches in many cities. Most other Unions have a national administrative body with “certified locals” in each location. The organizations listed are Unions with accredited locals such as the CMG across their respective region of operation.

The national CMG Staff assists branches and Location Units in handling local union-management matters. Within the PSAC, locals do much of the servicing of members until a grievance moves to final step within the component, at which time the component staff take over and all further costs are born by the component. The national PSAC office handles all arbitrations and appeals and all related servicing and legal costs. Dues are collected by the National Office of PSAC and then remitted to the components and Locals. Each PSAC component and local can set its own dues rate. As indicated above, the CEUDA collects 0.45% of base salary for dues, whereas the UPCE has a 1.44% dues rate. Locals within a component will charge a minimum of

UNION COMPARISON REPORT

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$1 per cap, with no upward limit, whereas larger locals will charge more. For example, the UPCE averages $11/mth/member, whereas the UTCE charges and average of $3/mth/member.

It was the consensus of the Committee that the CMG stands pretty much alone in respect to the geographical scope of its territory. Many of the organizations that were researched were found to be restricted to one province or in large cities along the Canada-U.S. border. CMG’s broadly dispersed membership means increased servicing costs.

It is estimated that the CMG ranks in the lower to middle third in respect to its dues rate compared to other

unions. We also found that staffing levels were comparable to these organizations. Where we did find a notable difference was in servicing and education. The CMG handles and pays for all

its education. CMG education is targeted to the specific needs of members and their work life in their Branch. In comparison, the Alliance handles and pays for education for all its components. It was reported, that although recognized as a very good education program, it was not always targeted to the specific needs and realities of the component. As for servicing, the CMG handles most of the servicing at the National level. Most of our branches have head offices in Toronto where decisions are made. The CMG budget, either at the National or branch level, covers all costs for this servicing which often includes travel for committees. These costs should all be factored into comparing the CMG to other similar size organizations, which appear to have very small travel expenses. In comparable organizations, the different levels of each respective organization also share costs.

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UNION COMPARISON CHART UNION MEMBERS TERRITORY STAFF DUES Comments

Canadian

Media Guild

5200

Full Time Equivalent

Pan Canada

Fulltime CMG Pres. Fulltime CBC Pres.

15 Fulltime Staff Total = 17

1.55% on all income with a cap of $1500 ($97000 and higher)

($50,000 = $775 annually)

Ed.: What a bang for your buck !!

CEUDA Customs Excise Union

Douanes Accise

PSAC Component

10,000

Pan Canada

Fulltime President 5 Part-time VPs

10 fulltime office staff including 3 labour reps

Total=16

0.89% to PSAC + $1 per cap/mth-deficit levy + 0.45% per cap/mth - CEUDA + $2-$5 per cap/mth to locals Rate set by each local

= @1.45%

($50,000 = $725/yr)

Locals handle all grievances until they reach the third level where the component takes over and passes off to the national (PSAC) for arbitrations appeals. No dues on OT. Education: standard courses are provided by PSAC Travel is minimal. A $2.75 per cap/mth/member is automatically applied when the strike fund falls below $10Million and is removed when the fund reaches $25Million.

Union of Canadian

Transportation Employees

PSAC Component

7500

Pan Canada

Fulltime President

Fulltime National VP 6 Fulltime Regional VPs

6 Fulltime Staff Total=14

0.89% to PSAC + $1 per cap/mth deficit levy + 0.75% to UCTE +$1-$5 per cap /mth to locals Rate set by each local

= @1.74% ($50,000 = $868 avrg/yr)

No dues on OT. Education: standard courses are provided by PSAC. Component puts on specific member seminars. Travel is minimal. A $2.75 per cap/mth/member is automatically applied when the strike fund falls below $10Million and is removed when the fund reaches $25Million.

Union of Postal Communications

Employees

PSAC Component

3800

Pan Canada

Fulltime President 4 Fulltime Regional Directors

3 Fulltime staff Total = 8

0.89% to PSAC + $1per cap/mth deficit levy + 01.44% to UPCE + $10-12 per cap /mth to locals Rate set by each local

= @ 2.61%

($50000 = $1309 avrg./yr)

No dues on OT. Education: Standard courses are provided by PSAC Travel is minimal. A $2.75 per cap/mth/member is automatically applied when the strike fund falls below $10Million and is removed when the fund reaches $25Million.

United Transportation

Union

2800

Pan Canada

6 fulltime elected Chairpersons

7 part-time regional staff Total = 13

Set $95.75 per cap/mth

$1,149 Annually = 2.29% of $50,000

Represents a range of 1.14% for higher salaried employees

to 1.9% for lower salaried employees.

The regional staff handles all grievances. Minimal Education Travel is minimal.

New

Brunswick Nurses Union

6200

Provincial

Fulltime President

6 Part-time elected officials 12 Staff includes 4 labour reps

Total = 19

Yearly adjusted per cap based

on top of RN2 pay scale. 2008 = $50 per month.

($600 Annually flat rate) = 1.20% of $50,000

Travel is minimal and provincial mostly. The NBNU is a member of the Eastern Labour School and has a very active funded education program.

Saskatchewan Union of Nurses

7700

Provincial

18 FT Officers 1 PT Payroll

3 FT Exec Assis 5 FT Office Assis 4 PT Office Assis

Total = 31

1.8% of Regular Wages

($50,000 = $900 Annually)

Full time Education Officer – lots of Education which leads to a lot of outreach travel - provincially

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Appendix iii

CMG FINANCIAL REVIEW

Survey Results

A total of sixteen surveys were received back from the two attempts made. Of these, fifteen had most if not all of the survey completed, while the other one indicated that the survey needed more background information before it could be accurately completed. This is a summary of the results.

1. In the recent past, was your location unit or branch prevented from doing something for its members because of a lack of funds? Yes: 2 No: 13 2. If yes, briefly explain what: Mobilization/social events To send an observer to the convention 3. Do you think your members would support an initiative to increase their dues under the following circumstances (yes or no):

a. to maintain services at the current level

Yes: 3 No: 9 Maybe: 3

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b. to offer enhanced services

Yes: 5 No: 6 Maybe: 4

c. to rebuild the Defence Fund prior to the new round of CBC negotiations (the fund currently has $500,000

less than it did prior to the lockout)

Yes: 7 No: 6 Maybe: 2

4. CMG dues are currently capped at $1,500 per year. That means anyone who earns more than $97,000 a year pays no dues on the money earned above that level. How do you think your members would respond if that limit were raised or eliminated?

Members would agree with raising or removing cap: 10 Members would disagree with removing cap: 1 No opinion or don’t care: 4

5. The Guild has the power to apply an emergency levy of up to $5 per member per month for a maximum of 12 months. Some members have suggested doing this to help rebuild the Defence Fund. In your view, this is:

a. Better than a straight dues increase: 7 b. Worse than a straight dues increase: 5 c. Acceptable if it’s prorated: 2 d. Not needed: 2

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6. Additional comments: There were a variety of comments. Many locations felt they needed more information to properly answer some of the questions. Several of the comments and questions make it clear that members need to be much better informed about the CMG’s finances. Pertaining to dues cap, most locations that responded felt their members would have no issue with raising or eliminating the cap, primarily because they felt it didn’t affect many (if any) of their members. A couple of locations went further, one saying they’d “be happy” if the cap was gone while another said that a dues increase or special levy would only be acceptable if the cap were gone. Only one spoke against increasing or eliminating the dues cap. A couple of locations felt that if there is an ongoing problem, the levy alone was not the best approach. Either a permanent dues increase, or a combination of dues increase and levy would be the only acceptable solution, if needed. Another suggestion was made that perhaps the levy should not be limited to 12 months, as 18 would be needed to get the Defence found to the desired level. There was a suggestion from one location to raise dues to 1.65% or 1.7%, in order to provide continued service with enhanced, not reduced, money for education in particular. The respondent saw education as an important mobilization tool. Several locations indicated that information and education about the CMG’s financial picture would be the key to acceptance of any dues increase or levy. Such an increase or levy would need to be openly justified to the membership.

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Appendix iv DUES BREAKDOWN BY EMPLOYER AND AMOUNT OF DUES PAID

Employer Permanent Capped 1.25k-.1.5K 1K-1.25k 500 - 1K under 500 Employer Temporary Capped1.25K-1.5K 1K-1.25k 500 - 1K

under 500

aptn 43 0 0 3 40 0 aptn 7 0 0 1 5 1 CBC 4476 264 462 1466 1543 741 CBC 2388 1 4 52 449 1882 CJRC 7 0 0 0 1 6 CJRC 7 0 0 0 0 7 CP 325 5 24 144 109 43 CP 51 0 1 0 13 37 CW 95 1 5 8 81 0 CW 6 1 0 0 4 1 Reuters 82 10 20 26 26 0 Reuters 4 0 0 0 2 2 S-Vox 47 0 2 3 42 0 S-Vox 4 0 0 0 0 4 TFO 35 1 1 5 28 0 TFO 2 0 0 0 0 2 TVO 51 2 2 20 24 3 TVO 3 0 0 0 0 3 Total 5161 283 516 1675 1894 793 Total 2472 2 5 53 473 1939 10322 5% 10% 32% 37% 15% 0% 0% 2% 19% 78%

NOTES Employer Freelance Capped 1.25K-1.5K 1K-1.25k 500 - 1K under 500

aptn 0 0 0 0 0 0

Source Data: CBC & CP: 2007 payroll reports (12 month period actuals.) Small branches: Jan-Mar 2008 payroll reports (12 month period forecasted) CMG pays per capitas to the International for about 5,200 employees and has a signed membership of about 4,700.

CBC 3500 26 6 11 74 3383 CJRC 0 0 0 0 0 0 Classification (perm/temp, etc) division based on last known status CP 0 0 0 0 0 0 CW 0 0 0 0 0 0 Reuters 0 0 0 0 0 0

35% of temporary employees contribute on average less than $4 per month (less than $50 annually)

S-Vox 0 0 0 0 0 0 TFO 0 0 0 0 0 0 TVO 0 0 0 0 0 0

77% of freelancers contribute on average less than $4 per month (less than $50 annually)

Total 3500 26 6 11 74 3383 1% 0% 0% 2% 97%

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Appendix v Location Unit Financing

Location Members

07 Remittance as per By-laws

08 Remittance as per by-Laws

Bank balance as at last Location

Unit report submitted

CBC BC Bureaus Under 50 $1000 $1000 $ 4,293 June 2007 CBC BC Transmitters Under 50 $1000 $1000 $ 4,497 September 2007 CBC Calgary 200-250 $6814 $6576 $17,792 December 2007 CBC Charlottetown 50-100 $2148 $1946 $ 3,509 December 2007 CBC Corner Brook Under 50 $1000 $1000 $ 1,036 April 2007 CBC Edmonton 150-200 $5941 $5905 $ 6,122 October 2007 CBC Foreign Corre Under 50 $1000 $1000 No balance Available CBC Fredericton Under 50 $1511 $1577 $ 4,954 June 2007 CBC Gander/Grand Falls Under 50 $1000 $1000 $ 2,577 December 2007 CBC Halifax 200-250 $7150 $6710 $11,349 December 2007 CBC HVGB/Labr. City Under 50 $1000 $1000 $ 2,235 April 2007 CBC Iqualuit Under 50 $1343 $1342 $ 1,655 December 2007 CBC N. New Brunswick Under 50 $1000 $1000 $ 1,396 April 2007 CBC Ottawa 500-550 $17489 $16574 $ 9,478 December 2007 CBC Regina 100-150 $4632 $4831 $16,425 September 2007 CBC Sackville/Moncton Under 50 $1000 $1000 $10,395 September 2007 CBC St. John Under 50 $1000 $1000 $ 8,392 December 2007 CBC Saskatoon Under 50 $1141 $1074 $ 3,151 December 2007 CBC St. John’s 100-150 $4532 $4462 $ 597 September 2007 CBC Sudbury 50-100 $1880 $1879 $ 3,342 July 2007 CBC Sydney Under 50 $1000 $1000 $ 767 December 2007 CBC Thunder Bay Under 50 $1000 $1000 $ 5,206 March 2007 CBC Toronto Over 2500 $85766 $84277 $47,842 December 2007 CBC Vancouver 400-450 $14669 $13489 $ 2,450 December 2006 CBC Victoria Under 50 $1000 $1000 $ 4,030 January 2008 CBC Whitehorse Under 50 $1242 $1074 $ 9,951 December 2007 CBC Windsor 50-100 $2148 $2181 $ 8,355 December 2007 CBC Winnipeg Over 100 $9567 $9025 $12,737 December 2007 CBC Yellowknife/Inuvik 50-100 $2618 $2550 $10,174 December 2007 CP/BN Halifax Under 50 $1000 $1000 $ 3,179 October 2006 CP/BN Edmonton Under 50 $1000 $1000 $ 3,372 March 2007 CP/BN Montreal/Quebec 50-100 $2331 $2466 $17,182 September 2007 CP/BN Ottawa Under 50 $1000 $1000 $ 1,874 January 2008 CP/BN Prairies Under 50 $1000 $1000 $ 2,996 July 2007 CP/BN Toronto 150-200 $5601 $5905 $ 2,691 December 2007 CP/BN Vancouver Under 50 $1000 $1000 $ 3,400 December 2007 Reuters Branch 50-100 $3129 $3553 $ 1,536 May 2007 TVO Branch 50-100 $2705 $2970 $ 1,514 January 2008 APTN Winnipeg Under 50 $1049 $1204 No Balance Available CW Television 50-100 $1000 No Balance Available CJRC Under 50 $1000 No balance Available SVOX Branch 50-100 $1000 No balance Available

*Quarterly payments calculated on previous years Dues income * All Bank Balances are rounded out