Canada’s largest provincial labour federation has issued layoff notices to around a third of its paid employees, after the Ontario branch of the powerful United Steelworkers union appears to have withdrawn support for the organization.

The Ontario Federation of Labour may be forced to shed ten of its 30-member team as a result of financial uncertainty caused by the ruptured relationship with its affiliate.

Steven Staples, a spokesperson for the OFL — which represents around one million Ontario workers — said: “The OFL has received a notification from one of its affiliates, United Steelworkers, that they may be withdrawing from the OFL — or at least withholding dues.

“There’s a financial impact to that, which puts the financial future of the organization a little bit in question. The management thought it was prudent to give advance warning to staff through these pre-emptive notices.”

Earlier this month, Sun News Network reported that it had obtained a letter signed by OFL president Sid Ryan citing the “misbelief that the finances of the OFL are in a deficit position” as the reason for United Steelworkers’ withdrawal.

Staples said the loss of dues paid by the Steelworkers was at the heart of the decision to issue layoff notices. He added that the redundancies would not take effect for at least four months, and that he was hopeful that the layoffs would be reversed if an agreement with the affiliate is reached.

“We’ve got four months to deal with this issue, so hopefully there will be no layoffs.

“A number of our staff members are close to retirement or have young families, and people are working very hard to make sure these layoffs don’t have to occur” he said.

Staples was unable to specify which jobs were at stake at the organization, but said the number of notices issued was “significant” and would be “felt throughout the organization.”

Financial difficulty is not new at the Federation. Last year, an independent auditor raised concerns about the organization’s operational deficit of $651,203, caused by the OFL’s pension and benefits obligations.

Staples said he did not have the latest figures on the OFL’s deficit, but told the Star that the most recent audit by BDO Canada showed the OFL’S finances to be in “good shape.”

The projections, published in June of this year, said the Federation had a positive cash balance of $79,000. However, Staples admitted the figures had not taken into account the latest spat with United Steelworkers, which prompted the layoff notices.

“If United Steelworkers leaves, the whole picture will have to be re-examined,” he said.

Responding to an email regarding the dispute with the Federation, the Director of United Steelworkers for Ontario Marty Warren said:

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“I prefer to keep the OFL issue(s) within the labour movement and will not be making a statement or commenting at this time.”

Other union affiliates who have moved to withhold dues from the OFL in recent years include the Ontario Nurses Union and the Ontario Public Service Employees Union, which has expressed concerns in the past about accountability and structural reform at the labour federation.