There are three types of boards for making Canadian labour relations policy effective: conciliation boards; arbitration boards; and labour relations boards. The conciliation and arbitration boards are ad hoc bodies appointed to deal with particular disputes. The labour relations boards (or LRB's) are permanent bodies, some of which sit continuously and deal with hundreds of disputes a year. Of the three types the LRB's are the most important. It is surprising that so little has been written about them.

This paper deals with one part of our experience with LRB's—the fate of their decisions when these are challenged in the law courts. Towards the end of the paper I comment briefly on the general problem of government policy and judicial review—a topic of importance to anyone concerned about the effectiveness of government policy, the containment of power, and the question of justice for the individual. In this larger perspective the LRB experience may be viewed as something of an illustrative case study.

Since 1944 a corner-stone of Canadian labour relations policy has been the certification of unions as exclusive bargaining agents for a defined unit of employees. An employer cannot legally refuse to bargain with a properly certified union; thus the policy is properly called compulsory collective bargaining. To receive certification a union usually has to have as members a majority of the employees in the appropriate bargaining unit; alternatively, a majority of the employees in the unit must have indicated by secret ballot that they wish the union to be their bargaining agent. For this policy to be applied two primary questions must be answered: (a) What unit of employees is appropriate for collective bargaining? (b) What union, if any, do a majority of the employees in that unit wish to have as their bargaining representative? The principal task of a labour relations board is to provide answers to these questions.

Gross national product is estimated in the Canadian National Accounts in two substantially independent ways: by adding the various components of production (mainly incomes); and by adding the various components of final expenditure. As both aggregates measure the value of goods and services produced by Canadians in a given period they should be equal. However, all measurements are subject to some error so that there is a statistical discrepancy between the two totals. In this way the residual error item arises.

The procedure adopted in the tables in the National Accounts is to present one half the difference between the independently calculated aggregates as an addition to the smaller aggregate or as a deduction from the larger aggregate. This averaging procedure is regarded as preferable to showing the entire amount of the discrepancy on one side of the Accounts (as is the practice in most countries) for two reasons. First, rough appraisals of the relative accuracy of the product and expenditure sides of the Accounts suggest that they have approximately equal reliability and so should be given equal weight on the average. Secondly, the aggregate which generates the residual error is considerably larger than gross national product itself. This is so because the error-generating aggregate is obtained by summing the components of gross national product and gross national expenditure without regard to sign and then deducting certain items common to both totals (such as the imputed items) and this is considerably larger than gross national product or expenditure as both gross national product and expenditure contain very large negative quantities (such as imports and farm operating expenses). Consequently, comparing one half the basic discrepancy with gross national product gives roughly the same result as comparing the whole discrepancy with the larger aggregate.

Clearly there will be some tendency for errors to cancel out so that a small residual error does not mean that components are free of error.

Modern societies apply certain concepts of the “social minimum” in sustaining domestic groups whose incomes are either cyclically or chronically depressed. Presumably, postwar programs of international foreign aid reflect an extension of this attitude. The first major effort in that direction, the European Recovery Program, was brilliantly successful in providing the base upon which Europe built its impressive economic performance of the past dozen years. The very success of the Marshall Plan, however, leads to a certain impatience with the comparatively unsatisfactory results of the more recent aid efforts—those directed towards accelerating economic growth in the less developed countries (LDC's). At the very time when the United States Congress is becoming increasingly disenchanted with foreign aid, the rising political power of the LDC's in the various agencies of the United Nations has been adding to the external pressures for an enlarged aid effort, as evidenced by the United Nations Conference on Trade and Development held in Geneva from March to June this year.

The newer focus of foreign aid raises particularly difficult problems both of diagnosis and of prescription. On the one hand, disturbances arising from cyclical instability within individual LDC's are often compounded by those associated with structural maladjustment, and it is by no means an easy task to distinguish between these separate sources of trouble. On the other hand, because primary commodities loom so large in the export trade of the LDC's, the industrial countries can be led (by a combination of good intentions and political blackmail) to accept, in the name of foreign aid, commodity policies that are ill-conceived and self-defeating. It is just as important to resist the implementation of unwise policies as it is to develop new institutional devices appropriate to current circumstances.