The whole idea of a retroactive wage decrease is completely and utterly disgusting.
But unions should not be used as tools whereby people are able to achieve above-market wages, and anyone in a unionized position, in any industry, whether that be in the private or public sector, should have good reason to fear.
If unions were to stick to their knitting, ie: strictly Collective Bargaining and resolution of grievances per the terms of Collective Agreements, then I believe they would be, and continue to remain as successful and respected institutions in Canadian society.
The problems with unions arise when their leadership decides to do things of a political nature (such as political lobbying, union-wide membership in the NDP, supporting anti-globalization efforts, taking positions in the pro-life/pro-choice debate, and supporting various other bullsh*t causes), or when their leadership decides that they need not be accountable and transparent to the membership.
I think union membership in Canada should be voluntary, much like a membership in the YMCA is completely voluntary. Union members, like YMCA members, would be able to hold their unions accountable for their actions, and the penalty for abuses of the nature I described above (for example -- the union taking out membership in a regressive political party) would be loss of members.