Thank you.
Colleagues, thank you for the opportunity to speak before you on my private member's bill, Bill C-377, requiring public financial disclosure by labour organizations.
I was first motivated to introduce legislation in the area of transparency as I examined some of the actions our Conservative government has taken since taking office in 2006. Among the legislation we've introduced as a government, our bill requires greater transparency for public office holders, for crown corporations, and, most recently, for native reserves.
However, I was surprised to learn that despite the massive federal public benefits for labour organizations and their dues payers provided through the Income Tax Act, there was no requirement to be accountable to the public for the use of those benefits. As you know, labour organizations, which collect between $3 billion and $4 billion a year in dues, operate free from tax on such things as profits on investments, revenue from employers, and training centre profits. Their members receive full income tax deductibility for their dues payments, and they receive their strike pay tax-free. Dues deductibility alone costs the federal treasury in the range of about $500 million a year.
As I stated in the second reading debate, labour organizations play a valuable role in Canadian society, and that is why we provide those benefits. However, I believe that because the public is providing such a substantial benefit, it should know how that benefit is being used. After all, charities, which also receive substantial benefits from taxpayers, have been publicly reporting on their finances for the past 35 years, since 1977.
As I looked around at our largest trading partners—the United States, the United Kingdom, Australia, Germany, France—I found that public financial disclosure for labour organizations has long been a fact of life. Indeed, some of my colleagues may be surprised to learn that for Canadian labour organizations that were founded as branches of U.S. unions, my bill is not news at all. That's because under the U.S. legislation, which was written way back in 1959, any union headquartered in the United States must also report on its foreign subsidiaries, which means, for example, that if a Canadian wants to know details about the leader of the United Steelworkers in Canada, that person could easily search the U.S. labour department website and discover the salary and expenses of that individual, along with information about how he allocates his time. The U.S. report tells us that in 2011, for instance, that particular labour leader spent one-third of his time on representational activities, one-third on administration, and one-third on political activities.
Bill C-377 will ensure that the Canadian public, including union members and retired former union members, will have similar comprehensive information about the spending of Canadian unions regardless of where they are headquartered.
One of the predominant concerns or questions raised by union leaders has to do with the cost of complying with the legislation. Some have suggested the cost will be high. However, I can assure you that unions are going to find the cost of complying with this legislation very modest, and I can use some recent history to demonstrate that this is the case.
When the U.S. labour department started to enforce more detailed public filing requirements for U.S. labour organizations—requirements that are similar to mine—about a decade ago, they also required the unions to report the cost of compliance. Perhaps not surprisingly, U.S.-based unions initially made the same complaint—that it was going to cost them a lot to comply with the disclosure requirements—but once the filing started to come in, it turned out that the costs were in fact very minimal. That's really not surprising if you think about it. We live in an age of electronic bookkeeping, and much of the information my bill requires is information that any responsible organization is already tracking.
For many unions the only expense they might incur in complying with this bill is for a software upgrade. Some smaller locals have suggested that requiring many pages of filing is going to be burdensome for them. Again I say no. If a local has not engaged in spending in several of the categories listed in my bill, then what could be simpler than entering a zero on those pages of the filing? Remember, Canadian unions with U.S. headquarters are already collecting and publicly disclosing this information in the United States.
Further, I would remind the committee that the bill makes no requirement that the filing be audited. Therefore, a union does not need to incur an outside expense for an audit.
As for the cost to the Government of Canada, I believe there will be some work to do on CRA's part in making the filings available in an easily searchable database on its website. However, it's important to remember that the CRA has much experience with the publishing of filings already, as it has been doing so with charities for 35 years and, in recent years, using its website. This is really not new for the CRA at all.
I believe the cost to unions will not be significant and is a distraction from the more fundamental issue of transparency and accountability. Labour organizations need to be accountable for the substantial public benefits they and their members receive. My bill does not tell unions how to spend their money or restrict them in any way; it only requires transparency so that the public can see how that money was spent.
As you know, Bill C-377 received approval in principle from the House at second reading, despite almost hysterical opposition from some members of the NDP. It has become apparent why the NDP doesn't want transparency from labour organizations; they don't want Elections Canada and others to know when they've been taking illegal donations from unions to fund their party. Under my bill, full financial disclosure will make it an awful lot harder to hide hundreds of thousands of dollars in illegal union contributions to the NDP.
Regardless, the second reading vote does not mean that the bill as it's currently written cannot be improved. Over the last several months, I have listened carefully to the concerns raised by MPs from all parties, as well as interested groups and individuals, and it's clear to me that some modest amendments are necessary to improve the bill.
I believe it's possible to achieve these improvements without compromising the intent and purpose of my bill, which is to ensure that the public has a comprehensive picture of how labour organizations are spending their money. As such, I would encourage the committee to consider a number of amendments to the bill.
One amendment would be to ensure privacy for the identity of individuals receiving health care, pension, or other types of benefits under a registered benefit plan. A second would be to reiterate and reinforce the confidentiality of solicitor-client privilege. A third would be to avoid publishing home addresses of individuals, even when their names are required to be published. In the case of police officers, I believe these amendments will also meet their special needs to have their personal information protected from criminal elements.
Another amendment would change the requirement for—quote—“a record” of the amount of time that directors, employees, and others spend on lobbying and other political activities. It would be changed to “an estimate” of the time provided. To clarify, the term “record” may be interpreted as requiring keeping an hourly log, and I'm not interested in creating red tape for hard-working labour leaders. Instead, a reasonable estimate of the time spent on such activities would provide useful information.
Another concern that was brought to me is that the bill's definition may have had the unintended consequence of capturing certain benefit-paying institutions, such as pension or health care funds. I would encourage the committee to consider an amendment to the definition of “labour trust” that would clarify that pension, health care, and related benefit firms are not captured by the reporting requirements of my bill.
To reiterate, colleagues, it's not the purpose of my bill to impinge on the privacy of individual Canadians. The purpose of my bill is to disclose union spending. I appreciate your attention to improving this bill through amendments.
Finally, I want to respond to the suggestion from some that this bill is somehow anti-union. On the contrary, this bill is the most pro-union legislation to be tabled and moved forward in Parliament in many years. Union members and retired union members, like the general public, want to know how union money is being spent. Eighty-three per cent of Canadians say they want to see financial transparency, according to a recent Nanos survey. Many unions are already publicly disclosing, but because of a U.S. law, not a Canadian one.
While a handful of union leaders may be uncomfortable with the idea of public disclosure right now, in time the public will see that the large majority of Canadian unions are using their resources wisely and efficiently. As this fact becomes apparent, a positive image of labour organizations as fiscally responsible will be promoted, just as it happened when charities became more accountable 35 years ago.
This legislation will give unions a solid public image and give union members, retirees, and all Canadians the information and confidence in unions they want to have. That's why I say that Bill C-377 is pro-union.
Therefore, despite the opposition of a handful of union leaders and some of their friends in the opposition parties, I would encourage you, going forward, to see this bill as something that Canadians, including unionized workers and their families, support.
Thank you for your attention.
I'm pleased to answer your questions.
