An Act to amend the Income Tax Act (labour organizations)
Russ Hiebert Conservative
Introduced as a private member’s bill. (These don’t often become law.)
Introduction and First Reading
Subscribe to a feed of speeches and votes in the House related to Bill C-317.
Bill C-377—Income Tax Act
Points of Order
November 28th, 2012 / 4:20 p.m.
Rodger Cuzner Cape Breton—Canso, NS
Mr. Speaker, I am rising on a different point of order. I want to recognize and commend my colleague from Skeena—Bulkley Valley on a very well referenced and articulated point of order. I hope I can only match that. I assure the House I will surpass him on the aspect of brevity.
I rise on a point of order with respect to Bill C-377, an act to amend the income tax act (requirements for labour organizations). Although my colleagues from the NDP have also risen on this matter, I am not convinced the arguments they put forward have been complete in terms of substance. As such, I want to offer further points on this matter for your consideration, Mr. Speaker.
I submit that Bill C-377's provisions to provide for reporting and public disclosure of certain financial transactions and administrative practices of labour organizations envisages a new function and purpose within the Canada Revenue Agency, or CRA. As such, the terms and conditions of the royal recommendation that authorizes CRA's current spending are being altered so that a new and distinct authorization for spending is being permanently created, which will therefore require a royal recommendation.
Past Speakers have ruled that legislation imposing additional functions on bodies funded by public money, if the functions are substantially different from their existing functions, will require a royal recommendation.
I believe that Bill C-377 will require royal recommendation for two reasons. First, the bill creates a new purpose for CRA in terms of a public reporting function that has no obligatory ties to taxation under the Income Tax Act. The bill would follow up on this additional purpose by creating what the CRA characterizes as “a comprehensive system that includes electronic processing, validations, and automatic posting to the CRA Web site”.
The Income Tax Act is concerned with the taxation of individuals, organizations and businesses. Any reporting requirements imposed on individuals and organizations are directly tied to their tax obligation or the exemption of these obligations. For example, charities can only keep their tax exempt status and donors only receive a tax receipt if the charity meets reporting requirements.
The Canada Revenue Agency is responsible for applying and interpreting the Income Tax Act in this regard. The primary goal of the agency, as Canada's tax administrator, is to ensure that taxpayers comply with their tax obligations and that Canada's tax base is protected. I want to stress that again: tax obligation.
Bill C-377 is strictly a function of publicly reporting information on one specific group of individuals, in this case labour organizations and labour trusts, outside of any direct obligations that those organizations or their members must have under the Income Tax Act. Given that it would create an additional purpose and new program requirements that would amend the Income Tax Act and modify the purpose of the CRA, the result is a new expenditure. The bill should be accompanied by a royal recommendation.
Mr. Speaker, I want to draw your attention to a Speaker's ruling in the other place on February 27, 1991 on pages 2262 through 2264 of the Journals regarding Bill S-18, an act to further the aspirations of the aboriginal peoples of Canada. The Speaker found that provisions imposing additional functions on bodies funded by public money, if the functions are substantially different from their existing functions, require royal recommendation.
The member for South Surrey—White Rock—Cloverdale and the government will no doubt argue that because labour organizations receive a public benefit, as charities do, they should be required to report as charities do.
The simple rebuttal to this argument is the fact that the reporting requirement for charities is based on a tax obligation. A charity must publicly report information in order to keep the tax exempt status it receives and the preferential tax treatment its donors enjoy. This will simply not be the case with labour organizations under Bill C-377.
To further disprove this counter-argument, I think we need to look no further than the first incarnation of Bill C-377, which was Bill C-317. The bill tied the reporting function of labour organizations to the enjoyment of the tax exempt status offered to them in paragraph (k) of subsection 149(1) of the Income Tax Act. Labour organizations not in compliance with the financial disclosure requirements outlined in Bill C-317 would lose their tax exempt status. Bill C-317 also sought to effect the tax treatment of union members if their union did not comply with its requirements by not allowing union dues to be tax deductible.
In your ruling, Mr. Speaker, on Bill C-317, which was delivered on my birthday of November 4, 2011, and found on pages 2984 to 2986 of the Debates, you said that Bill C-317 had not respected the rules of the Standing Orders because to remove a tax exemption was in effect to raise taxes, which would require a ways and means motion, which the bill did not have.
Your ruling, Mr. Speaker, disallowed that and forced the member for South Surrey—White Rock—Cloverdale to remove the parts of the bill that tied the reporting requirements to the enjoyment of tax exempt status by labour organizations and tax deductibility of dues by their members. In doing so, there is no longer any direct tie or connection to taxation or benefits received by labour organizations or their members. Labour organizations or trusts who fail to comply with the requirements of Bill C-377 will not lose their tax exempt status and their members will not lose the tax deductibility of their dues.
Bill C-377 solely becomes a simple public reporting function, which is a new function of the Income Tax Act and a new purpose for the CRA in its capacity to administer the act. As such, it should require a royal recommendation.
The second issue I want to bring to your attention, Mr. Speaker, has to do with how Bill C-377 regulates the internal affairs of unions and their relationships with their members. In essence, this is a de facto labour relations function that is completely new for CRA and duplicates the function of the Canada Industrial Relations Board.
Bill C-377 is modelled on a United States reporting regulation for American unions that falls under the Labor-Management Reporting and Disclosure Act of 1959. This act legislates labour relations. It promotes labour union and labour management transparency through reporting and disclosure requirements for labour unions and their officials. This act is administered by the Office of Labor-Management Standards within the United States Department of Labor, not the Internal Revenue Service.
The reporting requirements in Bill C-377 were copied from the reporting requirements of the most detailed and onerous reporting form from the Office of Labor-Management Standards, Form LM-2. Specifically, the bill copies the revisions to the reporting regulations that were introduced on January 21, 2009, by the U.S. Department of Labor and later rescinded on October 13, 2009.
Mr. Speaker, I will provide you with a copy of the final rule for both actions, which was posted on the U.S. Federal Register, so you can see how this legislation is a copy of the U.S. labour relations regulations.
The Disclosure Act of 1959 requires the public disclosure of union financial reports. In fact, the public disclosure is through an online, searchable database known as the electronic labor organization reporting system, the same type of electronic system proposed by the bill.
Bill C-377 is, in effect, a replication of U.S. labor relations law and regulations, specifically the department of labor regulations for the labor-management reporting and disclosure act of 1959.
The Canada Labour Code currently includes a section that deals with union financial transparency and accountability. It requires unions to disclose financial statements to members on request, or to the Industrial Relations Board to enable members to view that information. Part of their function is to regulate labour organizations.
The finance committee received a number of submissions on this bill. One submission was from Le Syndicat de professionnelles et professionnels du gouvernement du Québec. It included a legal opinion that argued that the bill was concerning labour relations. Although the argument was for an entirely different matter, I believe the substance concerning labour relations was sound, and it would be of assistance to you, Mr. Speaker, in your decision.
The predominant purpose of this bill, as promoted by the member for South Surrey—White Rock—Cloverdale, is to increase the transparency and accountability of labour organizations. During second reading, the member stated:
With the passage of the bill, the public would be empowered to gauge the effectiveness, financial integrity and health of any labour union.
The bill's summary states:
This enactment amends the Income Tax Act to require that labour organizations provide financial information to the Minister for public disclosure.
The degree of detailed information this bill requires is far broader in scope than any other requirement on any other entity that is publicly disclosed by the government. This is clearly an attempt to monitor and regulate the activities of labour organizations. This is especially clear when the bill requires the detailed time and expenditures that labour organizations spend on non-labour relations activities, such as political activities and lobbying.
Mr. Speaker, I want to draw your attention to a previous Speaker's ruling on October 20, 2006, and found on page 4039 of the Debates regarding Bill C-286, An Act to amend the Witness Protection Program Act (protection of spouses whose life is in danger) The bill proposed to expand the witness protection program to include persons whose lives were in danger because of acts committed against them by their spouses. The Speaker explained that the bill proposed:
...a protection that does not currently exist under the witness protection program. In doing so, the bill proposes to carry out an entirely new function.
As a new function, such an activity is not covered by the terms of any existing appropriation. ... New functions or activities must be accompanied by a new royal recommendation.
The government and the member for South Surrey—White Rock—Cloverdale may argue that the function proposed by Bill C-377 is the same function the CRA performs with respect to Charities Directorate or other tax exempt organizations. Although it is true that the processes and infrastructure required may be similar, the function and purpose for those processes are very much different.
Mr. Speaker, I draw your attention to the Speaker's ruling on November 8, 2006, and found on pages 4905 and 4906 of the Debates regarding Bill C-279, An Act to amend the DNA Identification Act (establishment of indexes). I believe the particulars on this issue have a lot of similarities in the case at hand and would deny this counter-argument.
Bill C-279 would have created a new purpose for the DNA Identification Act and established new indices in the DNA data bank, similar in context to the new database that would be created under this bill for unions. The Speaker explained there was an addition of a new purpose to the DNA Identification Act which was to identify missing persons via their DNA profiles. Again, this is similar to Bill C-377 that wishes to impose reporting requirements on another tax exempt organization under section 114 of the Income Tax Act.
In that ruling, the Speaker stated, “Amending legislation that proposes a distinctly new purpose must be accompanied by a further royal recommendation”. The Speaker's ruling on Bill C-279 clearly shows that just because a process, in that case the collecting of the DNA, and the infrastructure needed, meaning a database, are the same as the current function of an act, it is still considered a new function and purpose that gives rise to the requirement of a royal recommendation.
Mr. Speaker, whether you look at the detailed requirements of the bill, its summary, the testimony of government witnesses who spoke about how this would regulate unions or just read the statements made by the member for South Surrey—White Rock—Cloverdale, clearly regulating labour relations is the dominant nature of this bill. No such labour relations function exists at the CRA currently. Therefore, this bill would create a new purpose, a new function and/or an activity at CRA that would require a royal recommendation.
Unlike its failed predecessor Bill C-317, the reporting requirements and the public disclosure imposed by Bill C-377 in no way is linked to the imposition or levitation of taxes, levies or tariffs. Instead, this bill seeks to use the powers of the Income Tax Act to solely provide public information that would constitute a new function or activity. In addition, the bill would clearly create a new labour relations function at the CRA that not only does not exist presently but duplicates this function that is already happening at the Canada Industrial Relations Board.
Because this bill would create a new function and purpose at the CRA, I respectfully submit that Bill C-377 should require a royal recommendation.
Income Tax Act
Private Members' Business
March 13th, 2012 / 5:50 p.m.
Chris Charlton Hamilton Mountain, ON
Mr. Speaker, I rise to speak to Bill C-377, an act to amend the Income Tax Act (requirements for labour organizations).
The bill before us seeks to require trade unions to publicly disclose their financial statements. The reporting requirements contemplated by the bill are completely unnecessary, but the government knows that.
In Canada's trade union movement, financial statements are audited and reported to elected boards of directors, to all union locals, and to delegates at conventions. Annual audited statements must be filed with both provincial and federal labour boards. The Canada Labour Code requires that financial statements be available to members. Where those statements are not routinely provided to all members, individual union members can request them from their locals and directly from labour boards. The process is open, fair, democratic and accountable.
What is really being advanced by this bill is a dangerous and unprecedented move to advance the government's agenda of undermining the balance of labour relations in Canada by tipping the scales overwhelmingly in favour of employers.
Trade unions are profoundly democratic institutions. The leadership is elected by the membership and serves at the pleasure of those members. The relationship between a union's leadership and its members is one of transparency and accountability. A union is accountable to its members, just as comparable not-for-profit and tax-exempt entities, like think tanks, professional associations and trade boards are accountable to their members.
With this legislation the government is once again breaching the bounds of fundamental fairness by demanding that trade unions release their financial information to the public. Importantly, it is only trade unions that would be required to do so. Entities such as the Canadian Federation of Independent Business, the law society, and the Fraser Institute, all of which enjoy the same kind of tax-exempt status as unions, are curiously not mentioned in the bill. When the member for South Surrey—White Rock—Cloverdale first introduced this legislation as Bill C-317 in the last Parliament, he was asked why it targeted unions alone, why the same provisions would not apply to other not-for-profit agencies or societies. He was unable to answer that very basic question.
Clearly the labour movement is being singled out for attack in this legislation. Equally clear, the decision to uniquely target labour is ideological, unbalanced and vindictive.
Why are we here today debating a bill which on the surface appears to remedy a wholly invented problem?
We are here to debate legislation that would have the effect of hog-tying unions as they conduct their daily business of representing and advocating for working women and men. With this bill the employer sitting across the negotiating table would have ready access to all the financial information it might need to wage a war of attrition designed to bankrupt a union.
With this legislation the employer would know exactly what resources the union has and how far those resources will stretch. The employer would be handed a report that tells it exactly how much the union can spend on a grievance, whether the union can afford an organizing drive, and precisely how much is in the strike fund. It is absolutely outrageous.
Would the government contemplate any other negotiation between two parties where one side was legislatively required to hand over financial information that provided the other side with a spectacular competitive advantage?
This is legislation that corrupts the very idea of fairness and balance in negotiations between parties and undermines the fundamental right of free collective bargaining.
In grasping this we can now see the real purpose of this legislation. It is not intended to improve transparency or accountability. It is intended to deliver to the government's corporate friends a cudgel with which to hobble Canadian unions as they seek to represent their members.
We have seen the government's determination to sabotage free collective bargaining before, and this bill represents one more breach of common sense and responsible management. Never mind that labour rights are ostensibly protected by international conventions. Never mind that the balance of labour relations in this country has been relatively stable for decades. Never mind that organized labour in Canada represents more than three million men and women from coast to coast to coast. In every major dispute since they came to power, the Conservatives have responded with heavy-handed tactics expressly designed to hand the employer a win: disingenuous referrals to the labour board; the imposition of wage settlements that are lower than the employer's offer; draconian back to work legislation announced before labour disruptions have even begun.
Employers in this country now know beyond a doubt that there is no need to engage in free and fair collective bargaining, because the moment workers contemplate exercising their rights, the government will side with the employer and legislate those rights away. To the simple-minded government this must seem terribly convenient. In fact, it is a dangerous undermining of an always fragile balance in labour relations that will further destabilize an already flagging economy.
We have seen that the government's obdurate evidence-free ideological determination to punish those it sees as its political enemies trumps good management and fairness every time. Like a spoiled child, the government's reactionary knee-jerk propensity to attack any individual or organization that has the temerity to disagree with its world view knows no limits. We have seem it lash out at civil servants, scientists, NGOs, even churches, and now Canada's labour movement is again in the crosshairs.
If the government were really interested in accountability and transparency, it would first take a long hard look inward. Its own record is abysmal, from withholding Afghan detainee documents to the member for Parry Sound—Muskoka's multi-million dollar pork-barrel extravaganza, from an inability to tell Canadians how much the omnibus crime legislation will cost taxpayers to ministers and senior officials jetting about on Challengers, from failed multi-billion dollar sole-sourced F-35 purchases to electoral fraud. The Conservative government's call for accountability is sanctimonious nonsense. Its house is made of glass.
If the government has any real interest in accountability and serving the voters who sent us here to represent their interests in sound fiscal management, in making the lives of hard-working Canadians just a little bit easier, there is a long list of initiatives for workers to which it could and should turn its attention and resources.
Unemployment and underemployment for example are growing problems which the government continues to ignore. The real unemployment rate is 11%. Almost two million Canadians are out of work. Student unemployment last summer was a staggering 17%.
Conservative Party talking points aside, the truth is that the government has no job creation plan. That is why the NDP has called on the government to take positive steps to kickstart job creation.
The government should abandon its disastrous corporate tax spending policy and instead use that $3 billion to $4 billion a year for job creation measures that work. We should be providing a new higher tax credit for every new employee who stays on the payroll for a year. We have called on the government to cut small business income tax by two percentage points to encourage local job creation and investment, and to invest in infrastructure projects to address the infrastructure deficit, create jobs and boost competitiveness and living standards.
New Democrats want to invest in green infrastructure and renewable energy to facilitate the transition to a low-carbon economy and to invest in skills training for workers in transition and leading-edge industries. Instead, the government, bereft of a job strategy, has given away billions in subsidies and tax breaks to corporations without any condition that they create or even protect jobs for Canadians. When the victims of these failed Conservative policies attempt to access the employment insurance system, one in three of them are turned away.
That is why a previous Parliament voted to support my motion to expand and enhance EI benefits. That motion called for the elimination of the two-week waiting period for benefits, a reduction in standardization of the hours of qualification, and an increase in weekly benefits. Our caucus has tabled specific proposals in this Parliament to promote job creation, and to make EI the effective and responsive safety net Canadian workers have paid for.
Canadian families want action on jobs. When they become the innocent victims of the economic downturn, they deserve the support of their government. What do they get from the government instead? A petulant and gratuitous shot at Canadian workers that further weakens their collective position.
This legislation is as unnecessary as it is irresponsible. It is nothing but a partisan assault on the men and women who go to work every day to provide for their families and the unions who represent them.
I call on all members in the House to stand up for working families and vote to defeat this ill-conceived bill.
Standing Orders and Procedure
Orders of the Day
February 17th, 2012 / 1:25 p.m.
Alexandrine Latendresse Louis-Saint-Laurent, QC
Madam Speaker, I am very honoured to be able to speak on this occasion, which will happen only once during this Parliament. Indeed, this is only the third time this has happened in the past 20 years. Although some have said that this can be boring at times, I personally find it very interesting.
As deputy critic for democratic reform, I am very concerned about the public's perception of politicians. In light of the cynicism and plunging voter turnout, the situation is becoming more and more urgent. The NDP has a few suggestions for changes to the Standing Orders.
One thing that the public sees the most is the privilege set out in Standing Order 31, which allows a member to make a one-minute statement on various subjects. These statements are a very good way to reach our constituents. Members should use this time to talk about an event in their riding or an organization that, in general, deserves the attention of the House. Unfortunately, recently, many of the members have been using the time reserved for these statements to play partisan games. In my opinion, this type of practice should not be encouraged. Personal attacks are absolutely unacceptable, and Standing Order 31 should be amended so that there is more decorum here in the House.
Another interesting thing to consider is Standing Order 53(1), which allows a minister of the crown to initiate a take note debate. I participated in the take note debate on the Ukraine, and I saw that such debates can be very interesting because they allow all the parties to speak about a particular subject. I wondered why the opposition could not also initiate take note debates. The Standing Orders could include a mechanism whereby the House leaders of all the opposition parties could initiate take note debates. Another option would be to have a set number of take note debates per year and divide them up among the parties in accordance with the number of seats they hold in the House of Commons.
I would now like to talk about Standing Order 86(2), which could be clarified or codified, as the committee decides. At present, senators may introduce bills on the same basis as any member of Parliament, but those bills take precedence over the bills introduced by MPs. They then push back the order of precedence for private members’ business. I find it difficult to understand how unelected parliamentarians take precedence over the elected representatives in this House.
One solution would be to place Senate bills on a separate list and plan a particular time every week to hold those debates. Another possible approach would be to attach a Senate bill to the final item on the timetable of private members’ business and create a double-header evening, as happens when we debate two private members’ bills. That is what happened yesterday, when we had two private members’ bills to debate, one after the other. Of course, we will leave it to the House Standing Committee on Procedure and House Affairs to examine those solutions in depth.
Another point that deserves the committee’s attention is found in paragraphs 94(1)(a) and 94(2)(a). Those two provisions present a problem because they do not allow sufficient lead time for the first member who is to introduce a private member’s bill. They do not allow the member to change positions or give notice to the House that they will be unable to be present to introduce their motion or bill.
This situation has caused other problems. Here, I am referring to what happened on October 19, when the member for South Surrey—White Rock—Cloverdale had his private member’s bill, Bill C-317, withdrawn from the order of private members’ business because it could not be introduced without a ways and means motion. The Speaker stated that the existing Standing Orders presented a problem when the timetable for private members’ business was reshuffled. This then allowed the member to be put back into the order of precedence and amend his bill to enable it to be introduced, citing Standing Order 92(1).
Standing Orders and Procedure
Orders of the Day
February 17th, 2012 / 12:50 p.m.
Alexandrine Latendresse Louis-Saint-Laurent, QC
Madam Speaker, I want to thank the hon. member for his speech. I have a few quick questions for him.
He spoke a great deal about ways and means motions. Recently, there were a few problems with Bill C-317, which was rejected because no ways and means motion had been moved beforehand. The Speaker of the House invoked Standing Order 92.1 to give the hon. member a chance to reintroduce his bill. Since he was at the top of the list of MPs with a private member's bill to introduce, Standing Orders 94(1)(a) et 94(2)(a) prevented him from switching his bill, as usually it takes 48 hours.
I think all these provisions should be reviewed by the Standing Committee on Procedure and House Affairs. This creates an imbroglio, and I think it is important for these provisions to be addressed.
I would like to know whether the hon. member for Kitchener Centre agrees with me.
Income Tax Act
Private Members' Business
February 6th, 2012 / 11:50 a.m.
Yvon Godin Acadie—Bathurst, NB
Mr. Speaker, I am pleased to speak to Bill C-377 sponsored by the hon. member for South Surrey—White Rock—Cloverdale. To begin, I have to say a few words about the Parliamentary Secretary to the Minister of Finance of the Conservative Party, who says she is a proud union member who wants there to be transparency. She must also be a proud Conservative. Why did she refuse last week to disclose the salaries of the employees of the Prime Minister's Office? The hon. member for Saint Boniface says she is transparent and likes her police association union. Police officers across Canada wanted to have a firearms registry, but that hon. member voted against it. What a joke. The hon. member, the Parliamentary Secretary to the Minister of Finance, needs to get serious.
We can tell this is not a bill from the hon. member from British Columbia. This is not a bill from the hon. member for South Surrey—White Rock—Cloverdale. This is a government bill. The same thing happened with the firearms registry bill that was introduced by a private member. These are not private members' bills. This the Conservative government's way of sneaking through the back door instead of taking the front door.
Let us look at justice. If the hon. member who sponsored Bill C-377 truly believes in transparency, if the hon. member for Saint Boniface who just spoke truly believes in transparency, why did she fail to mention in her speech that organizations such as the Fraser Institute would not be subject to this bill? Why has no one mentioned that the oil companies, which are receiving taxpayers' money, are not subject to this bill? Speaking of transparency and justice, let us talk about the banks that received tax cuts even though they earned $20 billion in profits last year and the CEOs of those banks were paid $11 billion in bonuses. The Conservative government continues to give them tax cuts. If they want to talk about transparency, why do they not ask those people to be transparent?
I will quote the bill: “a statement of disbursements on labour relations activities.” We are talking about a union that defends workers. Speaking of transparency, in seven provinces unions are required, under the labour code, to report to their members and not to the general public. All the minute details of union activities are not the concern of the general public, just as the day-to-day expenditures of banks or oil companies are not the concern of the general public.
Why are professional organizations and lawyers' associations in Canada not covered by the bill? It was because of the Canadian Union of Postal Workers that this House sat for 58 hours straight to force Canada Post workers to return to work. The member did not mention that unions are subject to fines under this bill. The Parliamentary Secretary to the Minister of Finance says that she is proud to be a union member. However, this bill will impose a $1,000 fine for each day that unions fail to provide their financial statements.
There is no law in Canada that imposes such stiff fines on an organization. The member for Saint Boniface has the audacity to tell the House that she is a proud union member, that she is close to police unions, that she respects them. However, she wants to impose a fine of $1,000 per day on the union and take away money needed by workers to conduct negotiations with companies.
She wants unions to disclose all of their financial statements. The companies that unions bargain with, such as Royal Bank, Bank of Montreal, Toronto Dominion and all of the other banks and oil companies, will take advantage of that information.
The government wants them to disclose their financial statements. For crying out loud.
The member could have taken the time to include other organizations in his bill. I have been in the House of Commons for 15 years, so I know how bills can be written. The member could have included labour organizations and big business. He could have included everyone, but that is not what the Conservatives chose to do. They chose to attack the people who represent workers.
If the member did not intend to attack workers, he would have said that he believes in transparency and that, since there are seven provinces in which unions already send their financial statements to members as per the Canada Labour Code, that would be rolled out across Canada. But that is not what he did. He wants unions to disclose their financial statements to everyone. What does that mean? That means unions will have to provide the information to their adversaries, to employers, to oil companies and to big companies such as Caterpillar.
How much taxpayer money did Caterpillar get from the Government of Canada? Does the member have any idea? Now Caterpillar is closing its doors, relocating its operations and firing its workers. What does the member have to say about that? What are the Conservatives going to do about that? The Prime Minister himself went to London, Ontario, and shook hands with Caterpillar management. I see him get off that engine every time I watch TV. What about the taxpayers' money? How transparent was Caterpillar after it got taxpayers' money? Now it has closed its doors and left its workers out in the cold. The same thing happened with White Birch Paper in Quebec. It has closed its doors because it does not want to give workers their pension fund.
Who is now crucifying the workers, the men and women of our country? It is large corporations that close their doors when things do not go their way and put the workers out on the street. Why has the government not addressed this major problem? The government should tell the large corporations that they are accountable because the government gave them tax cuts. If the government wants to be so transparent, why do the employees of the Prime Minister's Office not tell us how much they make? Why are we not allowed to know how much they are being paid? I do not believe that the Conservatives are being transparent. Give me a break. Give me a break. This is simply another attack on the labour movement, like the ones the government launched against postal workers and against Air Canada employees.
I am certain that workers and all Canadians will understand the game that the Conservatives are playing.
People worked hard to earn pensions, salaries, good working conditions and the right to workplace health and safety. That is not what the Conservative government wants. It wants to take away what little workers have obtained in Canada. That is what this member is doing with his bill. This is not transparency. If he wanted to talk about transparency, he would have told these organizations to be accountable to their members, but he knows that they are already.
What is this government looking for? It only wants to destroy these organizations. I am not ashamed to stand up and defend workers and the organizations that work to protect them from abuse and slavery in the workplace. New Brunswickers move out west and, three days later, the employer tells them to get back on the plane and go home. The employer leaves them hanging. Is this social justice? Is this justice for workers? No. It is shameful to have a bill such as this one. I will fight against it. I have reason to believe that the Conservative government is going to pass this bill, in the same way it destroyed the firearms registry, which was there to protect Canadians.
One day, Canadians will have the chance to vote, and I hope that they will throw the Conservatives out once and for all.
Bill C-317—Income Tax Act—Speaker's Ruling
Points of Order
November 14th, 2011 / 11:05 a.m.
The Speaker Andrew Scheer
I would like to return to the ruling I gave on Friday, November 4, 2011, in relation to ways and means proceedings and former Bill C-317, An Act to amend the Income Tax Act (labour organizations), which stood on the order paper in the name of the hon. member for South Surrey—White Rock—Cloverdale.
As members know, I directed that the order for second reading of the bill be discharged and that the bill be withdrawn from the order paper.
In light of the unique nature of this particular situation, I directed that the member for South Surrey—White Rock—Cloverdale be permitted to substitute another item onto the order of precedence. In doing so, I inadvertently linked the time allotted to the member to do so at 20 sitting days in the spirit of the guidelines found in Standing Order 92.1. This was an error as Standing Order 92.1 provides for 20 calendar days. Instead, the link was intended to be to a 2006 example when another member, faced with similar circumstances, was granted 20 sitting days to select another item.
Therefore, the hon. member for South Surrey—White Rock—Cloverdale will have until Friday, December 9, 2011, to do so.
I regret any inconvenience that this may have caused hon. members.
Bill C-317—Income Tax Act—Speaker's Ruling
Points of Order
November 4th, 2011 / 12:10 p.m.
The Speaker Andrew Scheer
I am now prepared to rule on the point of order raised by the hon. member for Windsor—Tecumseh concerning ways and means proceedings on Bill C-317, An Act to amend the Income Tax Act (labour organizations) standing in the name of the hon. member for South Surrey—White Rock—Cloverdale.
I would like to thank the hon. member for Windsor—Tecumseh for having raised this matter, as well as the bill's sponsor, the hon. member for South Surrey—White Rock—Cloverdale, for their interventions and the hon. member for Kitchener—Conestoga for his comments.
The hon. member for Windsor—Tecumseh pointed out in his remarks that the purpose of Bill C-317 is to require that labour organizations provide specific financial information to the minister for public disclosure. The member also pointed out that failure of a labour organization to comply with this new requirement could result in a labour organization losing its tax exempt status, noting, as well, the subsequent impact this would have on dues-paying members of that organization.
He characterized the effect of Bill C-317 in the Debates, on October 18, 2011, page 2171, as follows:
—the income tax exemptions that apply to labour organizations and the reduction of taxable income as a result of writing off the dues paid by their members would easily qualify as alleviations of taxation. Further, the provisions of Bill C-317 would repeal those alleviations by terminating the labour organization's Income Tax Act exempt status.
The member for Windsor—Tecumseh explained that any labour organization not in compliance with the financial disclosure requirements outlined in the bill would no longer enjoy the tax exempt status as provided for in section 149(1)(k) of the Income tax Act. He argued that this would have the effect of taxing a person, or in this case an organization, that was not already a taxpayer. He concluded therefore that Bill C-317 should have been preceded by the adoption of a ways and means motion.
In his submission, the hon. member for South Surrey—White Rock—Cloverdale in the Debates, on October 25, 2011, page 2438, contended that the purpose of Bill C-317 was limited simply to providing a mechanism for the public disclosure of union finances and only augmented the existing types of information that the Canada Revenue Agency was already empowered by its mandate to compel organizations or taxpayers to provide.
He also referred to a ruling from the 40th Parliament on Bill C-470, An Act to amend the Income Tax Act (revocation of registration). He found a parallel between Bill C-317 and Bill C-470. Where it had been argued that charitable donations were discretionary so that Bill C-470 did not affect any existing alleviation of tax, the hon. member argued that in the case of Bill C-317 payers of union dues could exercise their discretion by opting to join a union or labour organization that adhered to the financial disclosure provisions of Bill C-317 and, thus, maintain the tax exempt status of their dues.
Before analyzing the arguments presented, it is important to take into consideration the context of this discussion as it is worth noting that the financial procedures of the House are based on long-established and strictly observed rules of procedure, procedures that are based on the concept of the financial initiative of the Crown. This concept is clearly presented in Erskine May’s Parliamentary Practice, 23rd edition, at page 848:
—it is for the Commons, acting on the sole initiative of Ministers, first to authorize the relevant expenditure (or 'Supply') and, second, to provide through taxes and other sources of public revenue the 'Ways and Means' deemed necessary to meet the Supply so granted.
The role of the Speaker in the present situation is to determine if Bill C-317 is a legislative initiative which imposes a tax or other charge on the taxpayer and therefore would have required the prior adoption of a ways and means motion by the House.
In order to respond to that question, it may be useful to examine more closely the different precedents cited by the members who intervened on the present case.
During his initial point of order, the member for Windsor—Tecumseh referred the Chair to the ruling of November 28, 2007, on Bill C-418, An Act to amend the Income Tax Act (deductibility of remuneration). In that ruling, at pages 1463 and 1464 of the Debates, the Chair made reference to Erskine May's Parliamentary Practice, 23rd edition at page 896, where it explains, “the repeal or reduction of existing alleviations of taxation” must be preceded by a ways and means motion.
The Chair concluded that Bill C-418 removed an existing tax exemption which then resulted in an increase in the tax payable by certain corporations. In the Chair's view, this constituted a reduction of an alleviation of taxation and therefore required that it be preceded by a ways and means motion. I would ask hon. members to retain the phrase, “alleviation of taxation”, as I will return to that concept shortly.
First, let me address the differing interpretations of how an individual union member’s rights are affected by Bill C-317. The member for Windsor—Tecumseh argued that union members do not have the automatic individual right to stop paying dues to an organization that no longer enjoys a tax exempt status. The member for South Surrey—White Rock—Cloverdale countered that, in his estimation, union members would have the ability to select a labour organization that complies with the provisions of C-317 to ensure that they maintain their tax exemption. While this is more a question of labour law than procedure, the Chair is aware that members of a labour organization cannot easily change which union they belong to nor can they simply withhold paying their union dues except in extremely limited situations provided for in the law. As pointed out by the member for Windsor—Tecumseh, this is in stark contrast to donors to a charity who may choose whether they wish to contribute, the organization they wish to contribute to and the timing of any such contribution.
The Chair must agree with the hon. member for Windsor—Tecumseh that the non-compliance of the labour organization would also remove a current income tax deduction for the dues-paying members of the union. For the Chair, there can be no doubt that this also can be characterized as the removal of an existing alleviation. For this reason alone, Bill C-317 would need to be preceded by a ways and means motion.
Let us return to the larger context. The Chair appreciates the point made by the member for South Surrey—White Rock—Cloverdale that the Canada Revenue Agency already enjoys the authority to compel the financial disclosure of certain financial information. However, it is not the power of the CRA to require the disclosure of certain information that is at issue.
It is true, as the member for South Surrey—White Rock—Cloverdale claims, that Bill C-317 changes the reporting requirements for labour organizations. However, contrary to what the member asserted, that is not all it does. In stating that non-compliance with these new requirements makes a labour organization ineligible for tax deductions available to labour organizations, Bill C-317 potentially removes an alleviation of taxation and in so doing, the bill potentially creates a new statutory authority that removes what is currently an unqualified exemption.
Perhaps the distinction can be better understood by looking again at the example offered by Bill C-470 in the third session of the 40th Parliament. That bill changed the definition of a class of taxpayers, specifically registered charities, but the alleviation of tax for registered charities as a class of taxpayer remained unchanged. By contrast, Bill C-317 does not change the definition of a labour organization. It demands disclosure of certain types of information, failing which disclosure, the bill provides that the tax alleviation in place for labour organizations will no longer apply to non-complying labour organizations.
This is a subtle difference, but it is a crucial distinction for the Chair.
The ruling on Bill C-470 determined that the bill altered the conditions and requirements for an organization to be classified by the minister as a registered charity but did not alter the class of taxpayer. In more basic terms, Bill C-470 proposed to alter the definition of what constituted a registered charity but did not change the tax exemptions for registered charities. In the ruling on C-470, delivered on March 15, 2010, and found on pages 419 and 420 of the Debates, I stated:
It seems to me that the bill instead seeks to provide a new criterion that would allow the minister to determine into which existing class of taxpayer an organization falls. The existing tax regimes and the existing tax rates are not affected.
According to the provisions of Bill C-317, under the Income Tax Act, a labour organization would remain a labour organization, whether it complied with the proposed disclosure requirements or not. If enacted, Bill C-317 would thus create a situation whereby labour organizations can be differentiated into two distinct categories, those that comply with the financial reporting mechanism and those that do not.
In the Chair's opinion, this new category of labour organization would constitute a class of taxpayer that does not currently exist. Labour organizations in the newly created class, that is those that do not meet the financial reporting requirements outlined in the bill, would see the removal of their current tax-exempt status. Put simply, Bill C-470 did not alter the tax-exempt status of registered charities, whereas, in contrast, Bill C-317 proposes to alter the current tax-exempt status of labour organizations.
As a result of this determination, I find that Bill C-317, by distinguishing between certain labour organizations, creates a new class of taxpayer and that this new class of taxpayer would then be subject to a removal of an alleviation of taxation.
For the reasons stated, I must, therefore, rule that Bill C-317 should have been preceded by a ways and means motion. Consequently, I also rule that all proceedings on the bill to date, namely introduction and first reading, have not respected the provisions of our Standing Orders and are, therefore, null and void. Accordingly, the Chair directs that the order for second reading of the bill be discharged and the bill be withdrawn from the order paper.
However, I am reluctant to deny the member what is likely his only opportunity in this Parliament to have an item on the order of precedence.
As members are well aware, Standing Order 94(1) provides the Speaker with the authority to “make all arrangements necessary to ensure the orderly conduct of Private Members' Business”.
In light of the unique nature of this particular situation, the member for South Surrey—White Rock—Cloverdale will be permitted to substitute another item onto the order of precedence. The substitution shall be done pursuant to the spirit of Standing Order 92.1, which allows a member 20 sitting days to substitute another item of private members' business for the item that has been discharged and withdrawn. Should the member choose not to replace the item within the next 20 sitting days, his name will then be dropped from the order paper.
I thank the House for its attention.
Bill C-317--Income Tax Act
Points of Order
November 1st, 2011 / 3:25 p.m.
Russ Hiebert South Surrey—White Rock—Cloverdale, BC
Mr. Speaker, I appreciate the opportunity to respond to the member for Windsor—Tecumseh, who again has raised certain objections to my private member's bill, Bill C-317. I must note that the member did not raise a single objection or make a substantive argument in response to my rebuttal, nor can he.
To reiterate, it is simply the case that Bill C-317 does not give any additional taxation power to the Canada Revenue Agency that it does not already have. It merely enumerates two of the most relevant of those already existing powers. To be specific, the CRA already has the power to revoke a labour organization's tax exempt status and revoke dues deductibility. The CRA has the power to do this for several different types of violations of the Income Tax Act, including the one that is specifically identified in this bill, the failure of a labour organization to file a return.
As the bill does not grant the CRA any new powers to revoke tax exempt status or dues deductibility, there is no new ability created to collect extra revenue.
Only the requirements surrounding what must be included in a public information return are new. Let me emphasize that labour organizations must already file returns. They already face consequences for failure to file returns. The tax consequences for failure to file returns already exist. Those tax consequences are not increased or changed by the bill. The only thing that would change is what information is required in the public information return.
While the public information return I propose is not onerous, it is probably more detailed in some areas than what is currently required of labour organizations. However, requiring more detail than may be presently expected does not mean requiring more tax or a new tax. It is already the case that a labour organization could refuse to file its currently required tax return, and it could face losing its tax exempt status and dues deductibility as a result.
Under my bill, a labour organization could also refuse to file its tax return, including the new public information return that I propose, and it would face the identical consequences.
Let us use the member's own example of a dues-paying worker whose income was slightly below the second income tax bracket and was forced to pay taxes because of lost dues deductibility.
The member used an example to fit the definition of creating a new taxpayer, as it states in Beauchesne's, “an extension of the incidence of a tax so as to include persons not already payers”.
The example could be a realistic scenario; I do not debate that. However, it makes no difference. Using the same example, the same dues-paying worker could be forced into paying taxes right now if his or her union refused to file its tax return today.
Nothing would change for that dues-paying worker with the passage of my bill. The power to create a taxpayer out of the dues-paying worker in the member's example was granted to the Canada Revenue Agency a long time ago. My bill does nothing to change that.
Frankly, that is the long and the short of it. My bill's sole purpose is to ask for more detailed information and to make it public. It does not impose any additional or new tax consequences on a labour organization or its members.
A different point the member raised in his response concerned the requirement of unionized employees to pay dues. Of course, in my response I did not dispute the requirement to pay dues, nor did I suggest that it was discretionary under certain labour contracts. Instead, I pointed out that employees always have the option to choose which union they want to represent them.
Again, Mr. Speaker, if you read the transcript carefully, you will see that the member did not address the substance of the point that I raised. Instead, he was merely dismissive of the well-established fact that union members can decertify their existing union and certify another one. In Canada this happens all the time for a variety of reasons with which the member is undoubtedly familiar.
I greatly suspect at this very moment if a union local deliberately violated the Income Tax Act by refusing to file a return and put its tax exempt status and its member dues deductibility at risk, its members would take action. One of those possible actions would be, as I stated, to decertify the union and bring in another. As the member himself pointed out, unions are democratic institutions, so another action might be to democratically remove the board of the local and install one that would comply with the law and thus preserve the dues deductibility of members.
The bottom line is that while it may be mandatory to pay dues, dues-paying employees do have options, including whether or not to pay their dues to a labour organization that qualifies for dues deductibility under the Income Tax Act.
However, regardless of the choices that union members may make, Mr. Speaker, I would urge you to focus on my major point, that there is no difference in the potential tax consequences in the scenario of a labour organization failing to file a tax return under the present Income Tax Act versus a labour organization failing to file under the amendments proposed by my bill.
Finally, let me note that both in his point of order and in his later response, the member disappointingly used a considerable portion of his remarks to engage in actual debate over the substance of my bill. He raised issues clearly unrelated to his point of order over ways and means, such as what he falsely assumes my bill would cost unions and his favourite theory about the strategy behind my bill.
The proper place for the member to raise these issues would be the time allotted for private members' business, and I would be happy to correct the member on his faulty arguments during that time.
Bill C-317--Income Tax Act
Points of Order
October 26th, 2011 / 5:25 p.m.
Joe Comartin Windsor—Tecumseh, ON
My colleague from St. John's mentions that the government always talks about red tape reduction, when in fact in this case it is just piling it on for ideological reasons in its ongoing attack against the labour movement in this country.
Let me conclude with these few remarks. This precedent with Bill C-317, for all intents and purposes, allows private members' bills to increase taxes on entities that are covered by these income tax laws by putting a hair trigger on those requirements. That is exactly what is happening here.
It goes contrary to the spirit and the letter, I believe, of the Standing Orders of this place. I am confident that once you, Madam Speaker, have reviewed all the arguments you will agree.
I once again renew my request to the Chair that what has happened up to this point with regard to Bill C-317 be dismissed from the record of this House and that Bill C-317 be found to be out of order, and not allowed to proceed on to second reading.
Bill C-317 is currently scheduled for the first hour of debate as a private member's bill on November 4, so it will be necessary for the Chair to give us a ruling on this before that date.
Bill C-317--Income Tax Act
Points of Order
October 26th, 2011 / 5:15 p.m.
Joe Comartin Windsor—Tecumseh, ON
Madam Speaker, this is a continuation of an argument on a point of order that I raised last Tuesday and which was responded to by the member for South Surrey—White Rock—Cloverdale yesterday. The point of order I raised at that time was with regard to Bill C-317. It is an act to amend the Income Tax Act as it affects labour organizations in this country.
When I raised the point of order, I asked the Speaker at the time that he rule that the proceedings to date under Bill C-317, standing in the name of the member for South Surrey—White Rock—Cloverdale, that the introduction and first reading has not respected the provisions of our Standing Orders and is therefore null and void, and that he direct that the order for second reading of Bill C-317 be discharged and the bill be withdrawn from the order paper.
I will summarize that quickly. What I was asking for and continue to ask for is a ruling that the bill, in effect, is improperly before the House and should not even have made to this stage, so we should be taking it off the order paper and not allow it to proceed into the future.
My objections to the bill were laid out on the grounds that the bill would have the effect of creating taxpayers where ones did not exist before.
This, of course, is the sole prerogative of the ministers of the Crown and cannot be done through private members' business.
The attempt here, by doing it through a private member's bill, is clearly contrary to all sorts of precedents where governments, when they are doing this, do it through the form of a government bill, a ways and means motions and a budget bill.
In his remarks, the member for South Surrey—White Rock—Cloverdale attempted to discredit the arguments that I presented on October 18.
Over many years in the legal field and in the courts of this country, I came to recognize that type of argument, that type of case presented by an opponent counsel. It always represents the last gasp of a lost argument, which is what we saw yesterday. It was a bit disturbing. I felt that he had misrepresented and, in one case, actually misquoted my words, attributing words to me that I did not say. He also ignored my most substantial argument. Finally, he held on for dear life to the straws of a paraphrased reference while ignoring the actual precedent on which the reference was based.
Madam Speaker, if you go back and look at my original argument, you will see the distinguishment I was making in that regard.
In his brief remarks he said:
My colleague also raised the issue of my bill creating a “new class of taxpayer”. According to the Income Tax Act....
He said that was what I said. He went on from there and spent the next 276 words of his response critiquing my apparent reference to the creation of a new class of taxpayers, as though it were the crux of my argument, which it was not at all.
Unfortunately, the member opposite attributed to me that I used the word “class” only one time. He repeated it I do not know how many times in his argument. I used the word only once. When I used that word, he appeared to have completely lost that context that was coming forth or he ignored it. I used it to point out that the guideline for determining whether or not a ways and means motion was necessary, and I was quoting from the House of Commons Procedure and Practice, second edition at page 900 where it uses the words, “extension of a tax to a new class of taxpayer”.
The root of that reference is Beauchesne, not me, who does not use the words “class of taxpayer” at all. In quoting me in such a way would be a similar way of me saying that he agreed with my case where, in a fragment of one of his sentences he said, “It is accepted that the bill may have the effect claimed by my colleague”. That is the kind of argument he was making. It was completely out of context and it was quite erroneous of the argument I was placing before the Speaker on October 18.
Such a selective use of quotes would be irresponsible and misleading, as it was when my colleague opposite did so yesterday.
Madam Speaker, while clearly lost on the member opposite, I am confident that you will see the marked difference between the paraphrasing he used for my argument, “a class of taxpayer”, and the actual reference from Beauchesne's, which states, “an extension of the incidence of a tax so as to include persons not already payers”. The difference between them may seem negligible but, in this case, it means the difference between it being eligible for a private member's bill or being required to be brought forth by way of a ways and means motion by the government of the day and, therefore, ineligible for a private member's bill.
The member went on in his remarks to counter my assertion that a member of a labour organization's dues were actually discretionary. This one actually blew me away in the sense of the level of lack of knowledge on the part of the member. He was arguing that the fees that union members pay were akin to the contributions one makes to a charitable organization. They are not.
I know very well that union members are required by the laws of this country, if they are represented by a union,to pay union dues. This came out of the Rand Formula, which came out of the city of Windsor as a result of a Ford strike back in 1946. It was a long fight. It is very much a major part of the history of this country. Mr. Justice Rand at that time was appointed to deal with it. He created the Rand Formula, which makes it mandatory for members of unions to pay dues. It is not a choice.
This was what he said, and it blew me away. He said:
—union members whose union has lost its tax exempt status for refusing to disclose have the right to exercise certain options. Those options include the option to be represented by another union....
That is totally false. It is not how the labour relations system in this country functions at all. An individual union member cannot just go across the street and tell another union that he or she now wants to be a member of that union and ask that it represent him or her. It does not work that way. The argument is really at the level of being preposterous.
Labour unions or organizations are democratically elected by their members. It is very similar to a government in that respect. There is a formal election process. I wonder if the member would feel that the taxes citizens pay to the federal government are discretionary in this sense as well. The answer to that is obvious: it is not at all discretionary. It is not discretionary for people to pay their taxes and it is not discretionary for people to pay their union dues.
As I said, after his remarks yesterday, his efforts to discredit my remarks had virtually no substance and my argument today confirms that. There was one exception to that and that was his contention that his bill did not actually change the tax rules. This was basically a new point that he had raised. I will summarize what he said. He said that it made the provisions of financial disclosure that must be followed that much more stringent, so it was not changing things. I disagree strongly with that interpretation, but the argument got me thinking about what door we would be opening if in fact, Madam Speaker, you found that line of argument persuasive
I will now take this idea close to the limits of its application. There are provisions in the Income Tax Act that, if broken, revoke the tax benefits of businesses, charities or non-profits, just like the one dealt with in this bill. The member for South Surrey—White Rock—Cloverdale asserts that no ways and means motion is required for amending the rules which would trigger the loss of those benefits.
Just last month, in September, the government adjusted some of the tax benefit rules in its second budget implementation act, specifically the rules around the business partnerships that allow taxes to be deferred within the partnership arrangements. In fact, what happened with regard to that change in benefits was that the government tabled a ways and means motion ahead of the bill being presented. That is what is required in that circumstance. It is what is required in the circumstances that we are dealing with in Bill C-317.
I do not want to be extreme in my examples regarding the ability to allow this type of an amendment. However, we have to look at the door that we would potentially open here. I say that from this vantage point.
A few years ago, as part of the G8 preparatory meetings, I happened to be in Russia and in the course of the meetings we met with a number of human rights groups, set up by our embassy there. Human rights groups were showing the leadership of that country, at that time, taking extreme measures, and I equate that to some degree with what we are seeing here. We are certainly away ahead of where this bill would be, but it is along the same slippery slope.
What Russia was doing was imposing such onerous requirements on the human rights groups to report and report that even large organizations were having to spend anywhere from 25% to 50% of their human resources and budgets on this reporting function. It made it virtually impossible for them to continue to function. The law was just coming into effect at that point, but since then a number of the organizations have collapsed under the weight of that kind of rule.
We could see the same thing happening if we continue to go down this route, where we have private members' bills coming forward, in one of the examples I used, that require a human rights non-profit group or union to have a transcript of every phone call or communication made by an employee of the organization and that information had to be provided to the government.
That was the kind of thing being done in the Russian legal system to, in effect, thwart the good work that a number of those human rights agencies were doing. That is the kind of thing we could be seeing, in any number of sectors, where that kind of an approach would have the effect of either significantly encumbering the operation of the organization or, in fact, putting it out of business.
To some degree, that is a problem with this bill. The requirements of this bill are so onerous, especially to small local unions of, say, 100 or 150 members in the local community. They would be required to do so much to comply with this bill that they could be put out of business, leaving their membership with no representation.