Bill C-377 (Historical)

An Act to amend the Income Tax Act (requirements for labour organizations)

This enactment amends the Income Tax Act to require that labour organizations provide financial information to the Minister for public disclosure.

Income Tax Act

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Yes, as a friend was saying, all elected and repeatedly elected.

However, I had close to 20 years as a rank and file member previous to that. I attended monthly union meetings where I reviewed line by line and then voted on our monthly financial statements. The trade union taught me one important lesson, which may be why Bill C-377 is before us here today, and that was to question authority.

In the 1980s and 1990s there were two leaders fighting for justice and equality and questioning authority. Nelson Mandela was first supported by the Canadian labour movement when it was not acceptable in society. Then there was Lech Walesa, a trade union organizer, human rights activist and co-founder of Solidarity, the union. That was the union believed by many to have started the downfall of the Soviet Union. Both Mandela and Walesa were feted and honoured in Canada by our federal government.

To my Conservative colleagues, I want to share some information about union operations they may not know. Please take a moment and listen. In fact, I doubt if many members of the Conservative Party have ever set foot in a union hall, union meeting or a union convention. Therefore, I will try to inform them as to why Bill C-377, in my opinion, is not needed.

I spoke of my early years as a rank and file member, but later, around 1979, I became vice-president of my local union at Bell Canada for communications workers and then president. In those positions, I was responsible for ensuring that the treasurer's reports were complete and available to our members each month.

As an officer and a delegate, I attended union conventions, political Federation of Labour conventions and Canadian Labour Congress conventions, where we received and voted on audited financial statements, approved future workplace information campaigns, and also campaigns to inform the general public of the labour movement's views on municipal, provincial and federal governments. For 14 years as president of the Hamilton and District Labour Council, we also produced monthly financial statements and yearly audited statements for our delegates. Therefore, if this is the case, why is Bill C-377 before us?

Bill C-377 is intended as an attack weapon against unions that do not share the Conservative government's political view. In other words, unions question the authority of the government, which is one thing the Conservative government has a great deal of difficulty with.

Unions have stood up against the policies of all three major political parties at one time or another, including the NDP. Therefore, as Walesa and Mandela did, unions continue to stand up for their members and in doing so stand up for the broader community. The last I heard, this is how our democracy is supposed to work.

Bill C-377, in my opinion, from the very first has been a flawed piece of unnecessary discriminatory legislation designed solely to impede legitimate member-approved union activities that call into question the actions of the Conservative government. Any union member who says that they do not know the functions of their union has not been attending their monthly union meetings where they are debated and voted upon.

We are in favour of transparency, but it must be applied fairly to the organizations that should be targeted and must not cause harm. The bill violates the rights of association, privacy and freedom of expression. The privacy commissioner agrees with that statement, by the way.

The bill is an ideological attack on labour organizations, and it is interesting, because it uses the words “transparency” and “fiscal responsibility” to mask its real objectives.

It would be a costly bill. It would cost millions of dollars to put into place and to establish the databases, which will cost at least hundreds of thousands, if not millions of dollars a year, going forward. The estimates that came before the finance committee were based upon 1,000 organizations. More than 25,000 would be covered by this in the labour movement of Canada. This is a huge burden for both government and workers. The purpose would lessen the vitality of those organizations to defend the rights of workers. Imagine what would happen if there were an additional 17 million hours of paperwork foisted on to business, like it would be foisted on to labour?

Bill C-377 would also give confidential information to businesses and government, which would give them unfair, competitive advantages and political advantages over the labour movement.

Why does the bill target only labour organizations and not all organizations? There are other organizations in the country that receive the benefits of tax breaks and, further, they receive them from the government. In fact, the government promotes many of them. Is this not discriminatory? Are the Conservatives comfortable spending millions of dollars for the records of unions' financial transactions during this period of fiscal restraint? Are they comfortable disclosing so much private and personal information on Canadians?

I realize I am getting close to the end of my time, but we have a bill to deal with an issue that nobody was complaining about, except the government. The Conservatives decided that they lost an election in Ontario because of the labour movement, and this is the end result. This is the reality of what it is all about.

There is another minor point: double taxation, and it is double taxation exactly. It would cost the taxpayer to institute Bill C-377 in the government. However, it would also cost the same taxpayer who happens to be a union member because 4,300,000 would have their union dues raised by the Conservatives. Is that not a first. They would have to pay for it. How do we think it would get done?

Now there will be Conservative union dues for the union workers in the country, and I am sure they will send letters of thanks to the government.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Representatives for the Merit group and the Carpenters union were in the room. I asked the representative for the Carpenters union: “If Bill C-377 passes, would Merit Canada see a financial gain?” Of course, he said “yes” and went on to speak about it.

Clearly, the Merit group is a competitor to the building trades and, in particular, to carpenters and electricians. It would be competing for the same jobs, seeking to employ its workers as the union would be seeking to employ theirs. However, the Merit group would know the bid structure that the unions were working from. Where do we ever see that in the business community?

We hear talk about big labour bosses in this place. I am not quite that big, but I am getting there. I signed my first union card at 14 years of age in 1961. I was a member of the CBRT&GW and later with the communications workers. I was vice-president and president, both terms of six years. I was an executive member of the Hamilton and District Labour Council for 28 years and president for 14 years.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, I want to begin today with a couple of quotes.

The Canadian Bar Association said: “It is difficult to see what issues or problems this bill is trying to fix. It provides for a greater public disclosure of information on labour unions' financial operations and restricts their political and lobbying activities through mechanisms that could be problematic constitutionally and in terms of privacy”.

The member who sponsored this bill, who is in the House with us today, said that public disclosure, which will help the public better understand how the benefits are provided, is being utilized. He also said in an interview that he had not received a single call or complaint from any member of a union or the general public, saying that they wanted the information that they were unable to obtain.

During the finance committee hearings on Bill C-377, we heard from witnesses who spoke about Merit Canada. Merit has had dozens of meetings on this bill with the sponsor and with the Prime Minister's office officials. At committee, when they were before us, the carpenters were there talking at the same time as Merit. They were testifying.

Mr. Speaker, were you speaking to me?

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Mr. Speaker, as a former member of the BCTF in British Columbia, I can say that this legislation is most welcome to those of us who are both former and current members.

I am grateful for the opportunity to speak to Bill C-377, a private member's bill to amend the Income Tax Act to require labour organizations to publicly disclose their financial information. Before continuing, let me recognize the sponsor of this legislation, our Conservative colleague from British Columbia, the member for South Surrey—White Rock—Cloverdale. He has done a tremendous amount of work and research on the bill and is to be applauded for his work.

Since his election in 2004, the member for South Surrey—White Rock—Cloverdale has been very effective in his representation of his constituents and a well-respected parliamentarian. Indeed, that is why his constituents have re-elected him three times in a row and returned him to Ottawa to continue representing them so well. He has also continued the public debate on many issues, including the subject of today's private member's bill, which seeks to require public financial disclosure by organizations that receive substantial public benefits.

Unions play an important role in Canada, representing and defending the rights of workers. Each union represents health and safety in their jobs and ensures appropriate compensation for their members in accordance with negotiated collective agreements. Approximately 4.5 million Canadians currently pay union dues and many more millions have been unionized at one time or another. Labour organizations are influential institutions in Canadian society and the bill reflects the importance of each.

The bill, an act to amend the Income Tax Act (requirements for labour organizations), seeks to increase the transparency and accountability of all labour organizations as a result of the fact that they receive substantial public benefits through the tax system. The principle here is that, like charities, labour organizations receive public money and the public has a right to be informed about how foregone taxpayer dollars are being spent.

Since 1977, registered charities in Canada have been subjected to reporting requirements and public disclosure for over 30 years. This legislation would require every organized labour union in Canada to file a standard set of financial information with the Canada Revenue Agency each year, which would then be posted on its website for the Canadian public to see, just as is the case with charities. I will explain that in more detail in a moment for the benefit and education of the House and for Canadians watching at home. The public will be able to gauge the effectiveness, financial integrity and health of any union they wish. This legislation applies to all labour organizations that claim tax exempt status or whose dues payers receive a federal income tax deduction for their union dues, whether or not they are actual union members.

As promised, I would like to talk about the example of charities for a moment to more fully explain what is already required of them and how this private member's bill follows that example. As such, I will briefly provide the chamber with an overview of the measures currently in place to oversee financial disclosure by charities in relation to today's proposal.

The Canada Revenue Agency, also known as the CRA, has various tools at its disposal to monitor and disclose spending by Canadian charities. At the federal level, the CRA administers a system to registered charities under the Income Tax Act. As the regulator of charities, the CRA's responsibilities include processing applications for registration, offering technical advice on operating a charity, handling audit and compliance activities, and providing general information to the public.

The regulation of the charitable sector by the CRA is based on both common law and the provisions under the Income Tax Act. The common-law requirement that charities devote their resources to charitable activities is central to how the CRA provides guidance to the sector and enforces the rules. For instance, recent legislative and administrative reforms have given the CRA additional compliance tools for use in regulation of the charitable sector, such as intermediate sanctions in the form of taxes or penalties for charities that do not comply with the requirements of the Income Tax Act. Prior to this, the only sanction available to the CRA was the revocation of registered charity status.

At the same time, the concept of undue personal benefit was clarified in the Income Tax Act. As a result, in the case of excessive executive compensation, the CRA has the authority under the Income Tax Act to conduct an investigation to determine whether the charity is indeed fulfilling its charitable purposes. It also has the authority to determine whether there is undue personal benefit and to impose a range of penalties up to and including a suspension of receipting privileges.

There is also more public information available today on the activities of registered charities. This helps increase accountability in the sector by providing prospective donors with the information to determine for themselves whether or not they would like to donate to a particular charity. Under the Income Tax Act, all registered charities are required to complete a registered charity information return, which is published on the Canada Revenue Agency website and includes information about compensation.

What is more, our Conservative government recently made a key change to further improve accountability of charities. Up until 2008, charities were required to report on the compensation for the five highest-paid employees, and indicate their salary range, with the last threshold being $119,000 and over. We changed that. Starting in 2009, charities were required to report the 10 most highly compensated positions. Annual compensation categories were also expanded, with the last threshold being $350,000 and over.

The introduction of this new reporting on employee compensation has served as a key tool to help increase transparency to show how charitable resources are being used, providing Canadians who generously donate their hard-earned money with even more information to help guide their decisions about giving.

One wonders, if charities are required to submit all such information and have it disclosed, should not union members and the Canadian public have the same type of information about organized labour? Many people have asked that question and have suggested it is appropriate.

Gregory Thomas, the federal director of the Canadian Taxpayers Federation, had much to say about this issue in an article published in an October issue of The Chronicle Herald newspaper entitled, “Putting unions, charities on same playing field”.

Let me conclude by quoting an important passage from that article that I suggest everyone read.

The Income Tax Act gives tax breaks to Canadians for various purposes. However, there are two major groups in particular that benefit most directly from tax breaks within the act: registered charities and labour unions.

While both groups benefit from taxpayer-aided income tax laws, the way they disclose to the public what they do with the money is very different.....

Charities in Canada receive a pretty decent taxpayer-funded advantage. If you donate money to a registered charity, you get to claim a hefty tax credit when you file your annual return. In return for this favoured tax treatment, charities are required, by law, under the Income Tax Act, to make annual financial filings and disclose their salaries, revenues and expenses. In fact, you can look at every charity’s filing online on the Canada Revenue Agency (CRA) website.....

However, despite their tax-advantaged status, Canada’s unions are currently not required to submit any public financial disclosures to the CRA, let alone the public.....

Some unionized workers have spent thousands of dollars, and big chunks of their lives, battling to get a look at their union’s books. In B.C., the United Food and Commercial Workers Union fought these workers in multiple labour relations board and court hearings, in a bid to deny them five years of financial statements. The case raged on for years. When it was finally decided in the Supreme Court of B.C., it came to light that the financial statements for 2002 through to 2007 weren’t even compiled until the end of 2007 and early 2008.

Examples like this go to show that the legislation is long overdue. Canadian workers are entitled to greater fiscal transparency and accountability from their labour unions. It is for that reason that I urge all members to support this important bill, and especially coming from a former BCTF member, I encourage all people in this House to support the bill.

[Judy Sgro, Liberal, York West, ON]

Well, that is pretty fast. When were the first and second readings? It is here today because the government wants it on the table and it wants us to vote on it. It wants to turn around with its whole way of being very negative. The amendments that were tabled, that my colleague from Cape Breton put forward, were all voted down. All we were trying to do is to say that if this is good for gander, it is good for the goose as well. Therefore, let us see the PMO open up its books and let everyone see it in the same way the Conservatives are asking of the unions. However, they are not prepared to do that because that is not the their issue; their issue is how to destabilize and break the backs of the unions.

I am glad I had this opportunity. I realize I am talking in the wind, because they have the votes. They will pass the bill tomorrow night and will have to live with the consequences. However, they are not here for a hundred years. The day will come when there will be an election and I expect there will be different faces on that side of the table at that time.

It has been important to have an opportunity to try to get some comments down. I remind people that the Conservatives have been found in contempt and the Prime Minister has yet to disclose even the donors to his leadership campaign. Therefore, if they want to start talking about who has to disclose what, who donated to the Prime Minister's leadership campaign? We are still asking for those things. If they are going to be fair here, then the Prime Minister should let Canadians know who donated to his campaign.

It is all one-sided. It is all about our having to disclose everything, or labour unions or other people, but any of their buddies or companies they want to favour, they will protect, and because they have a majority they get away with it. I think it is grossly unfair.

Our critic has done a tremendous amount of work on this file, as have my other colleagues in government. However, clearly, this will pass tomorrow night, which I say with great sadness, because it will start to pull back all of those various supports that are in place that people have enjoyed. These will just start to turn around and disappear through a variety of ways. Through the collective agreements, there will be changes coming.

We will move forward. We cannot do anything about it. It is here and will be voted on tomorrow night. I wanted to be on the record that I am very sad and discouraged that it is here and I challenge the government to be as open with everything it does, as it expects of other people. Bill C-377 is just one more step trying to undermine and defeat unions who have negotiated collective agreements and who are being totally disrespected as this moves forward.

The Liberals will be voting against Bill C-377, as we have made very clear. We asked to move some amendments and tried to get them on the record and voted on, amendments that would have made some positive changes to the bill. However, they were all voted down.

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, the reality is that I am not pleased to be speaking to this bill because I do not think we should even have it on the table. We have a government that does not have the courage to do exactly what it wants to do, so it does what it always does, which is fly a trial balloon so that someone else does the leading and it can just play it and massage it as it wants. It is not being honest with the public about what its true agenda is. We we know for a fact, when we look at the ideology of the Conservative government, that respect for unions is not something it has.

We need to ask ourselves where Canada would be without the labour unions today. The pension systems, health care, a tremendous number of these things were brought to the table in a variety of different forms as a result of the work that unions did. For those who are anti-union and think it is not necessary to have one, I would ask people to think of what the country would be like without one. All progressive countries have a positive working relationship with the unions and have shown true leadership.

However, to bring a bill like this forward and to pretend that it is just a private member's bill, it is like the abortion issue. The Conservatives just keep flying a bunch of balloons on what they truly want to do just to keep putting wedges between people, the same way that we have had wedges on a variety of other important issues. This is just another way to split the labour movement against another whole bunch of people here in Canada. It is that continued opportunity to try to destabilize people and to pander to that 36% who elected the Conservatives.

To ask any other organization in this country to give all of this disclosure, one usually should show some leadership, right? However, that would mean that the government would be saying that everything is open. Instead, we have the exact opposite with the government. The Parliamentary Budget Officer, who was appointed by the Conservatives to help everyone understand the books better and to monitor the spending, cannot get any information and has to fight with the government every day just to get the basic spending and financial data he needs to do his job. Now he is at a point where he has to go to court to force the government to release the information. Now we have Bill C-377 that would tell everyone else that they need to disclose everything about what they do.

Government is supposed to be about leadership and the folks in the current government are going in the exact opposite direction. This is also the first government that has ever been found in contempt, which is an absolute disgrace for this country. The Conservatives do not care what the rules are. We know what they have done on the whole issue of the scandals and the election fraud. They do not believe in respect for the laws of this country and yet they are trying now to force unions to open up their books and divulge information that they would never do in a hundred years. This is all an attempt to break the back of the labour movement. This is just one more step they are using to try to get there.

When people have a decent pension, good health care and all the other kinds of things they want, they do not need to rely on the government for a hand-up when things get tough for them because they clearly have great programs in place. When we start to undo collective agreements, people start to lose all those safeguards they have, which, by the way, they pay for. No one has given anyone anything. All of the folks who work and contribute to the unions, they do not need to belong to any of them. They could be independent and do it on their own. No one forces anyone to belong to a union. People choose to belong to a union because there are a variety of safeguards, which means safer conditions than other job sites, but it also guarantees them support for their families. If someone gets killed on the job there is health and safety precautions, much more so than would be there if they did not have a labour union doing the leadership that it does.

I will get back to the Conservatives who continue to cut all kinds of programs. The second one is to go after the unions, destabilize them and try to break their backs. However, who will pay for all of the services that will be required? Someone will need to pay. I guess it will be downloaded to the provinces when it comes to the social services that are required. It should be a shame on the government and the hon. member who is bringing the bill forward. When he was on the agriculture committee he stood up and supported XL packers--

The House resumed from December 7 consideration of Bill C-377, An Act to amend the Income Tax Act (requirements for labour organizations), as reported (without amendment) from the committee, and of the motions in Group No. 1.

Labour

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Mr. Speaker, the Conservatives are taking a page from the Republicans in the U.S. by attacking the rights of workers. After their back-to-work legislation and attacks on pay equity, the Conservatives are now pushing Bill C-377 through, even though it is highly flawed and violates the Constitution.

The Canadian Bar Association told us in committee that it violated the Constitution, specifically the right of association.

Can the Conservatives soft-pedal their partisan actions for two minutes and refer the file to the Supreme Court before violating constitutional rights and provincial jurisdictions?

Unions

[Eve Adams, Conservative, Mississauga—Brampton South, ON]

Mr. Speaker, none of the occupiers live in the great riding of Mississauga—Brampton South. I will not be intimidated. I will be supporting Bill C-377 in order to open up the books of unions to see what they are spending money on.

On that side of the House the NDP is quite cozy with its friends, the big union bosses. On this side of the House, Conservatives will stand with those hard-working, union dues-paying members who are demanding greater accountability from their union bosses.

[Craig Scott, NDP, Toronto—Danforth, ON]

Almost.

I wanted to indicate, regarding NDP-5, that I would perhaps urge the clerk and the chair to reconsider in light of the Speaker's ruling on Bill C-377 last week. It was very clear that the Speaker ruled that the Canada Revenue Agency had the capacity, in the existing system, to take on added burden and added cost when it came to that bill.

The rationale is exactly the same here. We already have provision in the Criminal Code for exactly the kind of legal assistance we're talking about. Section 684 already has the Attorney General covering costs.

So it is a line item. It already exists in the estimates. All we're doing is adding a burden to something that already exists. That's the pure rationale of the Speaker.

I honestly don't believe this one would require royal recommendation if we took seriously the Speaker's ruling last week.

Motions in Amendment

[Malcolm Allen, NDP, Welland, ON]

Mr. Speaker, first of all, let me help my friends learn a little about how this actually works, as I am probably the only member of the House who was the financial officer for a large union. I spent eight years of my life doing that.

This whole idea that the government is suggesting, that there is this lack of transparency and that unions do not tell anyone anything and all of this information is hidden away from the membership somewhere in a secret vault, is absolute hokum. I will explain how this works, especially to my friend who lives nearby.

Any expenditure beyond $100 needs ratification not only from the executive board but from the membership. That is right, all of the membership gets to vote on any expenditure beyond $100. The limit of any local union, and any union pretty much across the country, to expense money on behalf of its members is only up to $100.

When is that information reported to union members? It is reported monthly. This information is related both verbally and in writing. In my case, that is exactly what I did.

There is that dreaded audit that all of us fear on our income tax, but unions audit themselves continuously. These audits are conducted by outside auditors. In my case, KPMG used to do the audit. At one time, KPMG did an audit every six months because the organization was so large, but it eventually became a yearly audit.

Who else comes to visit unions? The folks who collect provincial taxes come to visit. They want to find out if the union has a hall that it rents out because taxes have to be paid on those things. They come and check the taxes as well.

Therefore, this idea that somehow there are no checks and balances in the system, that somehow the membership does not understand where the money is spent, or somehow we just collect the money, give it away and never tell anybody who we give it to is just false. That is not true. The membership always knows exactly where its money is spent. Members have the absolute democratic right when they do not like a particular expenditure to say no to it. They also have the right not to vote for a person the next time.

I can tell my colleagues across the way that I guess we did this so well, at least in my union, that I was elected three times as the financial officer. The members had no fear about how their money was expensed because they were always told how their money was expensed. In fact, we were more open than this government when it comes to the budget. The government had an omnibus budget bill that had less amendments to it than Bill C-377. That bill was so poorly put together in the first place that the Conservatives almost had to rewrite it to make it conform and be palatable to someone, but I have no idea who.

Clearly, this is not a bill that is supposed to be informative for union members or the general public. This is simply a bill that attacks unions across this country. There is no need for it and it should not be passed. It should just die on the order paper—

[David Anderson, Conservative, Parliamentary Secretary to the Minister of Natural Resources and for the Canadian Wheat Board]

Mr. Speaker, I hope to put a little light on the subject. The member opposite seems to have been more interested in fear-mongering than in actually dealing with the content of the legislative proposal.

I want to thank you, Mr. Speaker, for the opportunity to speak about Bill C-377, which is sponsored by the MP for South Surrey—White Rock—Cloverdale.

Before I get into the details of the bill, I would like to begin today by taking a few moments to speak about the importance of labour organizations. All of us know that they play a crucial, multi-faceted role in our society.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Mr. Speaker, I would have liked to say how happy I am to rise in the House to speak to private member's Bill C-377. That is not entirely true, however. I will spend a few minutes talking about it today. Everyone knows I have much to say on the subject. It is worrisome to me, as it is to the NDP, the labour movement as a whole, labour organizations and other associated organizations.

I would remind all members that the labour movement is the greatest democratic movement in our country's civil society. More than four million workers strong, it ensures that Canada and Quebec are, generally speaking, great places to live. Our working conditions, wages and occupational health and safety standards are what keep this country's economy running. Whether in the city or in the country, people can patronize businesses. They can go to restaurants and purchase goods. This historic legacy of the labour movement deserves to be recognized in the House. The very existence of the middle class is due in no small part to the battles that unions have been fighting for decades now.

Bill C-377 is obviously an odd bill because it is not transparent in the least. Generally speaking, a piece of legislation or legislative proposals are introduced to right a wrong, improve a situation, remedy a flaw or bring in measures that will benefit our constituents. It is not very clear what problem this bill is attempting to solve.

First, what is the objective or the goal of this bill? Where is it headed? It is not at all obvious. We have been told that more transparency is needed. The Canada Labour Code already requires unions to provide financial reports to members who request them. That is the law in seven out of 10 provinces. Last year, there were 4.1 million unionized workers and six complaints were filed. Six people said that they did not have access to documents and information to which they were entitled. Few organizations have a complaint rate as low as six out of 4.1 million.

There really is no problem. The Conservatives are trying to solve a problem that does not exist. This bill will create red tape and a bureaucracy and be very costly, not just for the unions, but also for ordinary citizens. Canadians will have to pay for the Conservative Party's whims. That is what is truly unfortunate about Bill C-377.

I mentioned it a few times when speaking in English to journalists who were scratching their heads. They were wondering what the government was doing and why it introduced the bill. I told them that I could not figure it out myself.

It is a really costly solution for a problem that does not exist.

I very much like the expression “if it ain’t broke, don’t fix it”. Everything is fine, so I do not know why anyone would insist on imposing an additional administrative burden on labour organizations, which are the economic mainstay of our country and contribute to the vitality of our production. These are the people who produce our goods and services. They are also the ones who drive our economy, by living their lives and consuming goods.

So what are the mission and purpose of this bill? We do not really see its usefulness. Nor does the Canadian Bar Association, which, in its presentation, had a wonderful sentence about not really understanding what this bill was trying to accomplish.

I mentioned the costs, and that is definitely the first thing that needs to be discussed. This bill will be very costly for the organizations involved and for all taxpayers. The Canada Revenue Agency conducted two assessments. It did a cost analysis and estimated that it will cost $2 million for first two years, and then $800,000 a year indefinitely. That is the figure for 1,000 reports, since it assessed only about 1,000 organizations that would be affected.

According to the Parliamentary Budget Officer's review, some 18,000 organizations will be affected. So that means it will cost not $2 million, but $2 million times 18. And that is just the initial budget forecasts. We have already seen estimated costs increase over time, instances when the cost seemed rather low or reasonable at first. We have seen that here at the federal level, but the municipal and provincial levels have seen it, too.

I think this is a slippery slope of red tape, paperwork and extra bureaucracy that will serve no purpose and will only be a waste of money.

We have a federal government that is slashing public services to Canadians. We have a Conservative government that wants to eliminate nearly 20,000 jobs, even though those employees are there to serve Canadians. At the same time, the Conservatives want to create new administrative obligations, even though they are making cuts.

How can the Canada Revenue Agency possibly take care of these 18,000 reports—18,000 copies' worth of fastidious, useless work—with fewer employees? I cannot wait to see that. How can it be done? No one has been able to answer that simple question. Actually, I do not see how this can be accomplished.

This legislation is aimed directly at democratic and transparent labour organizations: they are required by law to provide their members with this information. The bill creates a pointless burden. Why are these organizations targeted while others are not?

The other side argues that, since union dues are tax deductible, labour organizations' accounting books and financial reports should be open to everyone. Please note, however, that the people who need to know how their money is spent are those who pay union dues, and they already have that information.

In the interest of fairness, and to avoid discriminating against union organizations, the same rules should apply to everyone. For example, professional associations that also collect union dues and benefit from tax deductions, are not targeted by this bill. Apparently, it is not important for them to be because the tax benefit they receive should not force them to disclose all of their financial reports, even though the unions have to do so.

Why such a double standard? Why such a direct attack against unions?

We received part of an answer in parliamentary committee, when a Conservative member clearly said that this was not a matter of transparency at all and that it was a matter of what kind of involvement unions and the labour movement had.

Such is the basis of the Conservatives' thought process. It is not a matter of transparency. What they want is to stick their noses into the business of the labour movement. They want to know how much a particular union has spent on an awareness or public information campaign, a safe workplace campaign or a campaign to improve the pension plans of all Canadians. They want to stick their noses into the business of labour organizations and snoop around.

A fair rule should be applied to all organizations in Canada: as soon as they receive a tax benefit of some sort, their books should be open. That would be just great: thousands of organizations, businesses and companies would be required to disclose everything. It does not make any sense. If this does not make sense for companies and other organizations, then why impose it on the labour movement?

In closing, I am going to point out a few things. There are still major problems in this bill relating to privacy.

We have a Conservative government whose ideology is that government should not interfere in people’s lives. We have colleagues who are really libertarians. They like small government, but suddenly, when it comes to the labour movement, it is time for big government. They want to know everything; they want to see everything. If someone receives a benefit of some sort, like pension or disability benefits, their name is going to end up on a website. People will be able to do a search and see it.

What is the public interest? How does it enhance the common good in our country and how are we a better society if personal information about people’s lives is disclosed?

From the standpoint of the Constitution, this is a serious invasion, and I do not understand why a Conservative government is getting involved in it. Quite aside from what it will cost, this is not a bill that deals with the Canada Revenue Agency as such.

This is not a bill that deals with tax policy. It is a bill that deals with the organization of our labour movement and unions, and ultimately with labour relations. Under section 92 of the Constitution, those areas are subject to provincial legislation. We are going to end up in court. That will cost taxpayers more money, because of mismanagement and bad decisions on the part of the Conservatives.

[Mark Adler, Conservative, York Centre, ON]

As I was saying, Mr. Speaker, I am in favour of today's important pro-worker legislation from the member for South Surrey—White Rock—Cloverdale. I also want to thank all my colleagues on the finance committee and the many witnesses who appeared before it who shared their thoughts and concerns during our study of today's bill.

I certainly applaud the member for South Surrey—White Rock—Cloverdale for listening to the feedback we heard and for making some important amendments to this landmark legislation to address some legitimate concerns and to make a good bill even better.

Before starting my speech, let me acknowledge and highlight the work of its sponsor, our Conservative colleague from British Columbia, the member for South Surrey—White Rock—Cloverdale. The member has truly done an incredible amount of homework and research on this legislation before Parliament today. He is to be applauded for his efforts in standing up for workers, not union bosses, as the NDP have.

Since his successful election in 2004, the member for South Surrey—White Rock—Cloverdale has been a strong voice in Ottawa for his constituents and is widely respected as a parliamentarian. Little wonder, then, that for the past three elections, when his constituents went to the ballot box, they asked him to keep standing up for their concerns in Parliament. Today he builds on his record of advancing ideas and proposals that make Canada better with this important and long overdue piece of legislation, especially for Canadian workers.

Before I continue, I urge all Canadians who are watching at home today to write down the following Internet address on a piece of paper: www.c377.ca. This Internet site provides lots of additional information about this proposal, including actions Canadians can take to help ensure its success, such as filling out a petition or writing to their member of Parliament.

Let us now take a moment to examine the background of the bill, which would require transparency and public disclosure for organized labour organizations that receive considerable tax benefits.

All parliamentarians recognize that labour organizations play an important role in Canadian society by advocating on behalf of workers to ensure their health and safety on the job and appropriate wages and benefits. However, parliamentarians also recognize that the federal government provides substantial benefits to unions to support them in their work. Notwithstanding the generous tax benefits, unions are not required to disclose their financial activities in any significant detail.

As the member for South Surrey—White Rock—Cloverdale has said, this bill is designed to provide for the financial disclosure of how those public benefits are used and how the dues of everyday workers are used. It would give workers and all Canadians simple openness and transparency to ensure that their dues and their taxpayer subsidies are not being abused by union bosses, as we have seen all too frequently. Indeed, only recently, the Canadian Union of Postal Workers sent a five-member delegation to attend a Free Palestine conference in Brazil and then demanded that taxpayers pay for it.

This kind of public disclosure will affirm and increase Canadians' trust in the work of these organizations, putting it in line with most other industrialized countries. For instance, it should be pointed out that disclosure requirements for labour organizations in Canada are in stark contrast to those in the United States, where detailed filings are publicly disclosed and are available on the website of the United States Department of Labor. Indeed, it even captures some Canadian unions affiliated with their larger American chapters.

Even France, a country with a strong left-leaning tradition, has ushered in rules that force unions to post their financial activities online, something unions themselves requested to improve trust and their reputations. It is time Canadian workers had the same rights as their American and European brothers and sisters, to use labour-speak.

I should note that registered Canadian charities have long been required, for over three decades, to disclose similar information. Indeed, this is, according to independent polling data, exactly what Canadians have been asking for. For the benefit of this House and all those Canadians watching at home on television or listening online, I would like to share some of this important independent polling data.

Specifically, the well-respected Nanos Research firm recently conducted a survey of Canadians and asked about their impressions of unions, particularly with respect to financial transparency and their use of union dues. This report entitled, “State of the Unions 2011”, is the second survey of its kind conducted by Nanos. One thousand and one employed Canadians were polled between July 20 and July 25 of 2011. I would like to share with Parliament this important finding taken directly from the Nanos survey. It stated:

Findings showed that working Canadians surveyed agreed with greater financial transparency on the part of unions...83% of Canadians agreed with mandatory public financial disclosure for both public and private sector unions on a regular basis.

Support for mandatory disclosure of financial information by unions was strong across Canada, with over 70% of Atlantic Canadians saying yes, over 90% of people in Quebec agreeing, nearly 80% in the Prairies and over 85% in British Columbia. Even more impressive, a whopping 85% of unionized workers agreed that it was time for mandatory union disclosure of financial information. That overwhelming support has been reflected in a lot of public commentary that we have heard on Bill C-377 in the past year. I would like to take a moment to share some of that feedback with the House.

The Canadian Federation of Independent Business stated:

—we feel that requiring unions to publically disclose how they spend those dollars will bring some measure of transparency to their operations, especially in light of on-going news that unions are using those funds to back certain political parties and candidates throughout Canada.

I should note that even some union leaders themselves have stood up and said they would support this push for more transparency and we applaud them. For instance, CAW Local 444 president Rick Laporte told The Windsor Star, “I don't have a problem with it...Our books are always open to our members and anybody can come to our meetings and see our financials”.

A noted think tank had this to say this on the matter, “members would like to see where their dues are spent, and if that money was used to better the lives of said rank and file members, not fund exotic trips to communist get-togethers for union officials”.

I agree and that is why I ask all members to stand up for workers and support the member for South Surrey—White Rock—Cloverdale.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

Mr. Speaker, it is a pleasure to rise today to address report stage of my private member's Bill C-377 and the amendments I tabled to improve the bill.

I want to thank you for allowing my amendments to stand. It was disappointing to see the shameful tactics of the NDP members at the finance committee attempting to shut down debate and prevent these amendments from coming forward. This bill reflects the transparency that 83% of Canadians say they want to see from labour organizations. Nevertheless, the parliamentary process is robust and despite the NDP's efforts to prevent improvements to Bill C-377 for the benefit of labour organizations and all Canadians, the amendments I proposed are moving forward again.

There are a number of benefits to my amendments, and before I mention each of the individual changes in the bill, I will highlight a few major areas of improvement in particular.

First, there are several amendments that address the issue of privacy. Over the course of the last year I heard from a number of groups and individuals concerned about how various aspects of the bill might affect them. In particular, my amendments eliminate any uncertainty about reporting requirements for pension plans, health benefit plans and other regulated plans. They will not be required to report under Bill C-377 and neither will benefit payments to individuals from such registered plans. Let me be clear that it was never my intent that registered pension plans or health insurance plans report, or that the pension or health benefit payments that workers or their families receive be published. Regardless, the amendments before the House offer greater clarity that the regulated plans listed in the amendment will not report, and neither will payments from those plans to individuals be reportable under Bill C-377.

I have also removed home addresses from the reporting requirements. This change was especially important to those who serve in labour organizations, particularly for the police. I appreciate the input I received from the Canadian Police Association on the importance of this change.

Additionally, union employees earning less than $100,000 annually will not be identified unless they are in a position of authority. The $100,000 reporting requirement reflects similar legislation that has long existed in Canada, such as Ontario's sunshine legislation for the public service.

The second major area of change is that of cost savings to government. The opposition has been making much of the Canada Revenue Agency's report to the finance committee estimating the costs of implementing Bill C-377. Of course, those cost estimates were based on an unamended Bill C-377.

I have determined that significant cost savings will be achieved by the removal of the requirement that searches of union disclosure data be subject to cross-referencing, and by the requirement that all filings be electronic, therefore eliminating paper filings. Apparently cross-referencing is a feature that can substantially increase the cost of developing databases. While some government websites certainly offer this feature and it might become standard on such sites in years to come, I am not interested in driving up costs for the CRA just to have this feature at this time. Of course, requiring paperless filings can easily be seen as a way of ensuring savings. There will be no need for clerical help to transcribe filings into a usable electronic format and the CRA can take the filing data and post it on its website easily.

These two changes will reduce the CRA's costs substantially. Indeed, the CRA has confirmed that the estimated start-up costs of implementing Bill C-377 with my amendments will be less than one-quarter of what they would have been, and the ongoing costs will be less than half of what it previously estimated.

A third area of change that my amendments would foster is in what will be reported. There are two significant changes here. The first is that less reporting will be required of unions' core labour relations activities. Instead of providing details of spending over $5,000 on such activities as organizing or collective bargaining, an aggregate figure will only need to be reported. This reduction in the level of reporting detail required should lower the cost to labour organizations of complying with Bill C-377.

Second, for transactions where there is a potential for a conflict of interest, a so-called related party transaction, there will be full reporting on the details of those transactions. An example of a related party transaction might be when a labour organization buys a parcel of land from one of its directors. Bill C-377 does not comment on the appropriateness of such a transaction. It merely requires that it be reported. I believe everyone will agree that full transparency is called for when it comes to related party transactions.

I would like to address a few issues that have been raised by critics of the bill during its committee consideration and elsewhere.

First, critics have asked why the general public should be able to see the financials of unions they are not members of or contributing dues to. As we know, labour organizations operate tax free and their members receive full income tax deductibility for their dues and payments and receive their strike pay tax free. The deductibility of dues alone costs the federal treasury in the range of a half a billion dollars a year. I believe there is a genuine public purpose served by requiring financial transparency in all institutions that receive a substantial public benefit. It exists in government, crown corporations, charities and most recently on native reserves. Now we are extending transparency to another set of institutions that enjoy public benefits, that being labour organizations.

Second, critics have said that a $1,000 a day fine seems designed to punish labour organizations. Compliance with Bill C-377 will not be an onerous burden, but there has to be a deterrent for non-compliance, as the official opposition already implicitly recognizes. In the present Parliament, Bill C-205, in the name of the NDP MP for Hamilton Mountain, seeks to impose a fine of $1,000 per day for non-compliance with the new section of the Canada Labour Code. This is the precise amount of the fine in my bill. The NDP cannot have it both ways.

Third, critics have suggested that other than tax-free status, labour organizations do not actually receive any special subsidies or public dollars. Rather it is their members who do. While it is correct that many of the benefits accorded to labour organizations under the Income Tax Act, such as the deductibility of dues, are indirect rather than direct benefits, the effect is still the same. The benefits were created to support and maintain labour organizations.

The same is true of charities. Charities also do not receive public dollars or special subsidies. Instead, a direct tax benefit is given to donors. That benefit was clearly created for the purpose of supporting and maintaining charities. Just as it is legitimate to ask charities to publicly disclose how they spend the money that is ultimately derived from this public benefit, it is just as legitimate to ask labour organizations to do the same.

Fourth, a few have suggested that Bill C-377 would place unions at a disadvantage in labour negotiations, given that management would know details about the union's finances and its ability to sustain a strike. However, it is obvious that the willingness of workers to withdraw their labour in a bargaining dispute is based on far more important considerations than simply the amount of cash in the strike pay fund. The fact is, American and British unions, and for that matter a good number of Canadian unions which are already required to report in the U.S., have lived with financial transparency for a long time and it does not appear to have affected their ability to bargain effectively.

Another criticism sometimes levelled against Bill C-377 is that the list of financial items would be larger than required of charities. It is true that the list of statements that they would file is longer, but it simply recognizes the fact that labour organizations are more complex and administer a wide range of funds for activities, such as training, education and so on.

Finally, some critics have said that it is unconstitutional. They say that the bill nominally amends the Income Tax Act, but its real purpose is to regulate labour organizations, which is sometimes a provincial matter. That is simply inaccurate. The bill does not regulate labour organizations and does not tell them how to spend their money. In requiring labour organizations to file a report, my bill does not even require an audit. The bill would amend a federal statute, namely the Income Tax Act. The bill is only concerned with matters that already fall under the Income Tax Act that have long been constitutional. I would refer critics to the existing sections of the Income Tax Act and to the fact that charities have done so for 35 years and no one doubts that it is constitutional.

I hope all members will consider how the amendments I have put forward will improve Bill C-377 and support these amendments when the bill comes up for a vote.