Thank you.
My name is Norma Kozhaya and I am the Chief Economist at the Quebec Employers' Council. The Council wishes to thank the Standing Committee on Finance for the opportunity to comment on Bill C-377.
Let me say from the outset that the Council welcomes the bill, which, in the interests of transparency, requires unions to release their financial statements and disclose how they spend dues collected from their members.
As the representative of Quebec’s employers, the Employers Council has already spoken several times in favour of these kinds of changes. It believes it is completely appropriate that the amount of dues that workers are required to pay to their union under the Rand formula be made public, as well as the manner in which they are used. There are significant tax advantages associated with those dues.
A 2012 survey conducted for the Employers Council itself by Léger Marketing yielded similar results. What they show is that the general public, at 97%, believes that unions should be legally required to provide information on how the dues paid by unionized employees are spent.
The government, public agencies, listed companies and most organizations with large memberships are subject to strict standards requiring the disclosure of financial information. It would make sense for organizations as large as unions to be subject to similar requirements. The current situation generally features a lack of transparency not only for taxpayers and the general public, but also for the unionized workers themselves.
Furthermore, while we support the general approach, we have two specific comments. We are wondering, for instance, whether some simplifications can be made. As you may now, the Quebec Employers' Council has constantly been advocating for reducing the regulatory and administrative burden. In line with that, we are wondering, for example, whether some items could be grouped to make those simplifications possible.
However, the breakdown of expenses as to whether or not they are related to labour relations is particularly interesting and important; the Employers Council considers this to be a key aspect of the bill. That distinction should not be a real problem. Certain criteria could even be developed to make it easier to carry out. In a number of countries, this distinction is already being made.
Some union leaders and others claim that the new requirements greatly complicate matters. In the opinion of a number of experts consulted, appropriate coding and systematic expenditure accounting could make the task easier and would not generate additional costs, at least in the medium term. However, as I said earlier, there could be a way to simplify certain requirements.
In response to those who would argue that employer associations are not subject to the requirements introduced by the bill, the Employers Council states that, as an employer organization, unlike union organizations, it is funded mainly by voluntary contributions from its member associations and businesses.
The Employers Council’s financial statements are audited annually by an external auditing firm and presented to the board of directors. In addition, any member dissatisfied with how the contributions are used may withdraw from the association at any time and no longer contribute to the organization. Unfortunately, such a decision is unavailable to a worker in a unionized workplace.
While this bill does require the disclosure of several details regarding how union dues are used, it of course does not contain any requirement to justify these expenditures. According to the Employers Council, additional measures are needed to give more power to workers and greater legitimacy to union activity. While the Quebec Employers' Council understands the reasoning behind the Rand formula, it believes that labour associations should be legally required to use all funds collected on a mandatory basis solely for labour relations purposes.
To conclude, we believe that this bill corrects an existing anomaly and that it has the advantage of harmonizing and clarifying requirements.
Thank you.