Finance Committee on Nov. 7th, 2012

[Terrance Oakey]

Unfortunately not.

[Mark Adler, Conservative, York Centre, ON]

Okay. So they can still do this?

[Terrance Oakey]

Yes, they just have to be accountable. They have to be accountable for their political activities and all other activities, because of the generous tax treatment that they receive, and also because of their forced funding model.

Some have said that what's good for them is good for everybody. I say that what is good for them would be great for me. If the Government of Canada were to propose some sort of Rand formula so that every open shop construction company had to be a member of Merit Canada, my revenue would go from a few hundred thousand to potentially billions, just like the trade union movement, and I would happily submit to increased transparency. I actually think it would be my moral obligation to do so, and I wouldn't be here fighting it as they are.

[Mark Adler, Conservative, York Centre, ON]

So if the Public Service Alliance of Canada wanted to support and finance PQ candidates in the provincial election; give $340,000 to the NDP in violation of the law; pay for the NDP leader's trip out west to denounce the oil sands; take stands criticizing Israel; support the boycott, divestment, and sanctions movement; or call Israel an apartheid state, this legislation would not restrict them from doing that, correct?

[Terrance Oakey]

Unfortunately not.

[Mark Adler, Conservative, York Centre, ON]

Okay.

Why in heaven's name would they be against it? What have they got to hide?

[Terrance Oakey]

That's our question.

I've written on this extensively. Just as the head AFL-CIO recently said during the U.S. Senate hearings, this is actually good for unions. He was surprised that unions in France actually work with the government. If you look at what's happening in Australia right now after the horrendous scandal that happened with one of the labour MPs, who stole close to $500,000 in union dues off all kinds of activities, unions are working with the government to create disclosure regimes because of the immense tax treatment, and their funding formula needs to be protected. The only way to do that is to ensure that there's increased transparency so that the public trust remains.

[Mark Adler, Conservative, York Centre, ON]

You would think that common sense would tell you that unions should be in favour of something like this to dispel the myths that are out there. The NDP says that they are just myths and that there's no truth to them. You would think that they would want to dispel those myths, right?

[Terrance Oakey]

I would.

[Mark Adler, Conservative, York Centre, ON]

Yes.

Thank you.

[The Chair, Conservative, James Rajotte]

You have one minute.

[Mark Adler, Conservative, York Centre, ON]

Okay.

Trade unions were formed to counterbalance the power of the employers as a form of collectivity so that there would be more of a balanced approach to labour relations. Here in Canada, the law seems to be that labour relations regulates more the relations between employers and unions than the relations between unions and their members.

[Terrance Oakey]

I would agree with that.

[Mark Adler, Conservative, York Centre, ON]

Okay, thanks.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Adler.

Mr. Caron, you have the floor.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. Chair.

For the sake of transparency, I think it might have been interesting, Mr. Mortimer, to mention that you have 15 member associations. Of these 15, six are actually provincial Merit components, Le Conseil du patronat du Québec, and the Canadian Federation of Independent Business. Basically, we heard from you and over half of your membership on this bill, obviously all agreeing with each other. It would have been interesting if you had actually mentioned that at the beginning.

I would like to repeat something I said earlier. This bill is three pages long, plus definitions. Mr. Hiebert himself admitted that the number of amendments required to make this bill acceptable would mean not just changing the bill, but completely rewriting it.

So you are talking about a version of the bill that will most likely not be final, if there are amendments. In fact, it needs to be rewritten entirely.

Plus, based on Ms. Stoddart's testimony, it is seriously flawed in terms of privacy. This bill, as written, is a big huge mess even though this is its second incarnation after Bill C-377—the first version—was ruled out of order.

My first question is for Mr. Smith. You mentioned this briefly, but I would like you to give us some more details about the impact of this bill on the ability of unionized contractors to compete with non-unionized contractors, such as members of Merit.

[James E. Smith]

Thank you.

This bill, with the reporting that we will be required to do, would show various training programs that we put on for our contractors. We value our contractors, and when they need specialized training, they come to us. We will put it on.

I can assure you it will cost more than $5,000 to put on training programs for construction workers. That would be a competitive advantage that would be opened up to the Merit contractors, who would see what we're doing and see what our contractors are doing. It's a trade secret or something that's private between our contractors and the union, and that's where it should stay, not in the public domain.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Are you saying that some supporters of this bill, who are constantly raising the transparency argument, could gain specific strategic advantages?

[James E. Smith]

Oh, yes, some might call it a fishing expedition; I would.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you.

Some of your members are in the United States. During a previous meeting, John Logan, an expert on labour and employment relations in the United States, appeared before us. He said that the law in his country was quite costly for the U.S. government. Even though it covers fewer organizations—only those whose income exceeds $250,000—administration by the U.S. government costs over $6.5 million per year. Do you think that Canada will face similar costs if this bill is passed?

[James E. Smith]

Yes. I believe the cost would be huge to the Canadian taxpayers.

I have a report, 10 years old, from the Department of Labor in the U.S. It states the cost for the oversight of the reporting that was required in the U.S. I believe the reporting that will be required in Canada will be substantially more than that in the U.S., but 10 years ago it cost the U.S. government $28 million and took 300 full-time workers to oversee the compliance. That was just to oversee the compliance of the workers in the United States.

There were 13.4 million U.S. union workers for that $28 million. The Canadian Labour Congress represents 4.2 million Canadian unionized workers, which is about one-third of that. If you were to take one-third of the amount found in that 10-year-old report, which showed $28 million, and add inflation into it, that might be part of the cost. The other cost would be the set-up of the programs, the infrastructure to do it; that would be a huge cost.

I think Canadian taxpayers would like to know how much it would cost. I think it would cost more than the gun registry to set up.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Caron.

Mr. Hoback, we'll hear you for your round, please.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Mr. Chair. Thank you, witnesses, for being here.

One thing I pride myself on is working on good governance and making sure, being in government, that in any of the organizations I'm involved with, whether parliamentary associations or others, we have proper governance structures and good governance for proper transparency and proper reporting. That's not only beneficial for the people who belong to the organization, but also beneficial for the people who run the organization, so that they have good guidelines to act under and to follow in cases of crisis or in instances where things aren't normal and they have a process to follow through.

Coming from Saskatchewan, I know there's no question about the tie between the NDP and labour. I don't think anybody will question that. In fact, in Saskatchewan there was a convention at which one of the labour organizations was insisting that all of its members become members of the NDP. It's things like this that make me often wonder what organized labour is actually doing.

If it's actually sitting there to represent employees and look after the employees' interests, I understand that, but if they're going to go into social issues and issues that go beyond the scope of the workplace of those employees, I question the involvement. However, I suppose that's up to them.

When I talk to some of the union leaders and members from my riding, they say that they're already consulting with their members, that they're already going through that process, that the members know everything that's going on, that there are no surprises, that there's already a process in place for a member to raise his or her objection.

Mr. Mortimer, with LabourWatch, I'm curious. You're saying, and I'm hearing from some members, that there may be some consultation, but it's always hidden or it's always done in such a way that we never get all the facts, or there's intimidation involved when we raise questions on specific spending by different members.

Can you give us some examples of this? Am I right? Am I wrong?

[John Mortimer]

You're right. No one is saying that it happens all the time, but a major labourers' local of a construction sector union didn't hold an internal meeting for 15 years. What could those people do about that? When they do question it, they are challenged and intimidated; they can be threatened with being thrown out of the membership.

I disagree with Ms. Nash's assertion that there isn't forced membership in this country. There's only one set of workers in Canada who can't be forced to join a union as a condition of employment—federal government workers. Every other labour code in this country allows the union and employer to force a worker to become a member as a condition of employment.

Therefore, are you going to ask the tough question at the meeting if you could be thrown out of the membership and potentially lose your job? No, you're not. That's one of the fundamental problems, and that's what anonymity...that's what a website does: people can just look it up and know.

[Randy Hoback, Conservative, Prince Albert, SK]

One of the other questions I bring up with some of the smaller unions is that they're small, perhaps under 500 members. They barbecue together and they're like one big family. Again, they have transparency among themselves and they're all friends and buddies.

Do you think there needs to be an exemption for smaller groups like that?