Finance Committee on Nov. 7th, 2012

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

Thank you, Mr. Chair.

I would like to thank our many witnesses and guests for being here today and delivering such interesting presentations.

This committee has begun to show that this bill contains too many flaws to be passed, that it would cause major collateral damage, and that it even threatens Canada's economic health during these fragile times. This bill is clearly useless, discriminatory, unconstitutional, costly and excessively bureaucratic.

It is useless because unions are accountable first and foremost to their members, and the requirement for transparency already exists. I would point out to everyone that that requirement is in section 110 of the Canada Labour Code.

It is discriminatory because it targets only unions and pension funds and trusts associated with unionized workers, but it does not cover other organizations in our society that benefit from tax advantages granted by the federal government.

It is unconstitutional. Here, I am referring to statements by the Canadian Bar Association, which raised this significant concern last week.

It is costly. Last week, Professor Logan explained to us that, in the United States, dealing with less onerous reporting requirements than those in Mr. Hiebert's bill cost the federal government $6.5 million.

It is excessively bureaucratic because of the enormous amount of paperwork and the administrative burden that the organizations, trusts and pension funds affected by this bill would have to deal with. This is an example of big government.

That's not all. This bill is also intrusive. It is a threat to privacy and personal information. For example, if a retired union member is collecting pension benefits, his name and address, along with transaction amounts could be disclosed to the public on a website. Information about a firefighter who is disabled due to a work-related accident, including his name, health information, address and income, could be disclosed to the public.

My question is for the Privacy Commissioner.

What impact do you think this bill will have on the private lives of the individuals it is likely to affect? Does it raise serious issues with respect to the Privacy Act?

[Jennifer Stoddart]

Thank you for the question, sir.

I will answer in light of the fact that amendments were proposed that I believe would diminish privacy infringements.

With respect to other parts of the bill, I think that requiring the names of all individuals earning or receiving more than $5,000, as well as the amounts they receive, to be published on a website, is a serious breach of privacy. I have pointed out that some countries that are culturally similar to ours have found ways to ensure union transparency while infringing less on privacy.

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

Thank you.

Under this bill, if a union signs a contract for occasional services provided by a private company, that information will have to be disclosed. That raises a number of issues. I do not imagine that members of the Quebec Employers' Council would like their competitive or strategic information to be in the public domain and available to their competitors.

Do we have any legislation in Canada that protects the interests of private companies that do not want the cost of the work they do for or the services they offer to unions under contract to end up in the public domain?

[The Chair, Conservative, James Rajotte]

You have one minute left.

[Jennifer Stoddart]

Not to my knowledge, but I will get back to you in writing.

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

This situation could cause some serious problems.

I have a question for Mr. Hunter.

How much do you think it would cost your organization to comply with the requirements in Mr. Hiebert's bill? What kind of workload and resources would that involve for you?

[The Chair, Conservative, James Rajotte]

Okay, is this for Mr. Watson?

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

It's for Mr. Watson or Mr. Hunter.

[The Chair, Conservative, James Rajotte]

Okay. Would one or the other please give a brief response?

[Neil Watson]

It would be fairly substantial. From our perspective, a lot of these costs would be put at the feet of the various pension plans and benefit plans we manage manifold. I'm sure they would turn around and ask us to provide a lot of that information. In a portfolio, in a year we could do well over 1,000 transactions, and we have maybe 150-odd portfolios we're producing information for that would be over $5,000. Our best guess is that we would probably have to add some people to our organization and probably look at some capital expenditures, but that's just one of the costs.

I think the other cost that is significant is on the portfolio side. Portfolio information is basically our proprietary information within our business. Putting it onto a public website could impact our ability to buy or sell stocks and could affect the investment returns.

[The Chair, Conservative, James Rajotte]

Thank you. Merci.

We'll go now to Ms. McLeod, please.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you, Mr. Chair.

Thank you to all the witnesses.

I want to start by noting that the proponent of the bill, Mr. Hiebert, has indicated he intends to put forward amendments regarding some of the issues that were raised today, especially in terms of the pension and health care funds, etc. I think those amendments, hopefully, will deal with a number of the concerns and issues that were raised.

I have a number of what I hope will be fairly quick questions.

Ms. Stoddart, I was involved in health care before. I certainly recall that everyone who earned over a certain level of wages went on a list that was published on the Internet. There were nurses on it. There were X-ray technicians. It was just part of the routine disclosure of compensation. I believe the school boards and a number of different organizations did that. Certainly there don't seem to be the same concerns provincially that you have federally.

[Jennifer Stoddart]

Thank you for that example, honourable member. That is the custom in some provinces, or it's the law in some provinces. One way, I think, to further amend this bill would be to raise the threshold. I don't think anybody really has a salary of $5,000 these days, but it could be raised to include just the top earners. That seems to happen in other countries.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you.

Mr. Chassin, I noted your one point with interest, because I know at the last meeting there were some fairly articulate arguments about why it wouldn't apply to professional associations if it applied to unions. I thought your point about having to do that because it's part of the criteria, in terms of public protection, was certainly a different argument that has come forward.

I think it's line 141 in the Income Tax Act. Are there any other groups that have the benefit, that don't fit into one of those two categories, that you are aware of, such as nurses' associations, for which of course it is mandatory, in terms of protecting the public?

[Youri Chassin]

The unions' advantage is that they have a virtual power to tax. To my knowledge, no other private organization has such a power. Professional associations are a good example of public organizations that serve the public interest. They collect compulsory dues from their members.

Unions, however, are private organizations funded by member contributions that exist to defend their members. That is the difference.

To my knowledge, no other private organization of that nature has access to compulsory financing.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

As a former nurse, I know that my BC Nurses' Union dues were tax deductible, but so were my association dues. You articulate that they're for very different roles and purposes. Is that right?

[Youri Chassin]

That's right.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you.

For my next question I will go to Mr. Mortimer.

For starters, of course, the Income Tax Act is a massive document. You made some comments that there was a section of the Income Tax Act that you thought should apply in a different kind of way. Can you talk a little bit more about that section of the act and how you interpreted it?

[John Mortimer]

Yes, it's paragraph 8(5)(c). The key words, if you read through the various clauses, are that dues are not deductible to the extent levied “for any purpose not directly related to the ordinary operating expenses” of the union. In that section of our submission we refer to the different CRA policies and interpretation bulletins. We quote directly from them. In some instances, CRA has held that dues that were deducted by unions and spent on certain things were not lawfully deducted. They said they could not levy dues and set them up to be deducted by the taxpayer.

My question is whether union dues deducted for funding student protests in Quebec are an ordinary operating expense of a union. What you see in the limited rulings that are there, I think, is that would fail that test. I think there is a lot of money right now that would fail that test, but neither CRA nor the public have the information to change the situation.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. McLeod.

Mr. Cuzner, go ahead, please, for your round.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Thank you very much, Mr. Chair.

Thank you all for being here today.

There are a couple of take-your-child-to-school guys here today. We want to give them a shout here. I'm sure they were wishing they were back at school right now.

[Some voices]

Oh, oh!

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

The proponents of the bill like to say that we ask this of charities, so why can't we ask it of unions? I want to hold this up. It's a filing from one of the largest charities in the country. It's Alberta Health Services. They have the highest revenue of all charities in the country, one of the highest number of employees, and their filing is 11 pages thick. CRA has over 300 employees, and it costs $33 million a year to administer the charities program, so that would give you an indication as to where we are.

This bad boy here is two-sided print, and in one language, English. This is from the United Steelworkers of America. It files 715 pages for its filing, which is very close to what we're asking organized unions in Canada to file. That's what we're asking them to file. In the U.S., at the Office of Labor-Management Standards, it costs them $41.3 million a year to administer. They have 249 people on staff.

I'm going to put forward two motions at the end of the meeting here, one with regard to calling CRA in to give us its estimates for what it's going to cost taxpayers. We're also going to ask the Parliamentary Budget Officer to give his.

Do you see the merit in having those people in to tell us what it's going to cost?

Mr. Chassin, your organization is big on education. Do you think that's a wise move?

[Youri Chassin]

That's a good question, but I am not sure I can answer. I cannot speak to the technical details of the law, nor to what it might represent in terms of a regulatory burden, except maybe—