Quebec’s $10-billion labour investment fund has introduced fresh rules and a new chairman in a major overhaul designed to diminish union influence and turn the page on a corruption scandal.
Yvon Bolduc, the chief executive officer of the Quebec Federation of Labour (QFL) Solidarity Fund, will be replaced next month. The fund has also named respected administrator Robert Parizeau as the new chairman of the board. Mr. Parizeau, brother of former premier Jacques Parizeau, has sat on the boards of major companies including Power Corp. and the National Bank of Canada.
The reforms announced on Thursday come weeks before an anticipated provincial election campaign in which questions about the fund’s ties to the Parti Québécois are sure to loom large. Some of the changes will require legislation from Quebec City, where the plan was well received by all parties.
The fund committee that drew up the reforms warned the government against trying to diminish union influence even further. “We must reform without breaking the fund, which relies on union members for 60 per cent of new investment,” said Daniel Boyer, interim president of the fund. “We don’t just want a gang of accountants on the board. We want diversity.”
Under the changes, the majority of fund directors will be elected by shareholders rather than selected by unions, which will still pick seven of 19 directors. The chair of the fund’s board will no longer automatically be the QFL president.
The Charbonneau inquiry has spent two years hearing testimony about cozy and often improper links between construction businesses, unions and political organizations, and has spent several months on the QFL and its fund.
One theme was the appearance of conflict of interest created by the labour federation president also sitting on the board of the investment fund. Often, he would be acting as a bankroll for business while trying to represent the interests of workers and investors.
“It’s vital that the chair not be linked to the QFL, that the person be independent,” said Pierre-Maurice Vachon, the head of the fund’s special governance committee.
The inquiry heard wiretaps in which Mr. Bolduc, the outgoing CEO, revealed he knew the fund’s real-estate wing worked with Hells Angels associates. Mr. Bolduc will receive just over $1-million in severance. During his eight years in charge, the fund grew to $9.7-billion from $6.6-billion.
Recordings played at the inquiry included Solidarity Fund executives discussing how they choked off competitors of Tony Accurso, the former magnate who faces criminal charges related to allegations of corruption.
Michel Arsenault, the former QFL boss and fund chair, was recorded suggesting he could use his positions to influence Parti Québécois Leader Pauline Marois. Mr. Arsenault testified he was expressing a bad idea and never followed through.
Mr. Boyer said what happened “was unacceptable” and nothing similar has happened since 2009.