Finance Committee on Nov. 26th, 2012

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

Further, Mr. Chair, I believe that Mr. Hiebert was here at the beginning of the meeting when you ruled on Standing Order 116. I won't read it. I won't take the time to read the whole thing out, but a member may speak as often as he or she likes, providing, of course, the member is recognized by the chair. The member was duly recognized, and he moved the following motion:

That...pursuant to S. O. 97.1, recommends that the House of Commons do not proceed with Bill.C-377, An Act to amend the Income Tax Act (requirements for labour organizations)...

and so on and so forth.

That's a duly moved motion before this committee. There's nothing else. There are no amendments at this point, Mr. Hiebert; there is this motion before the committee.

Sorry, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Go ahead, Mr. Cuzner.

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

Thank you very much, Mr. Chair. You and the interpreters are doing an exceptionally good job today, I must admit.

On this specific point of order, the government has had an extension on this bill already. The government has had an extension on this bill for 90 days. It has only decided to deal with this in the last number of meetings.

My motions in bringing the Parliamentary Budget Officer forward to support it.... We would like to make the actual costs public before we vote on a bill like this.

My letter from the Parliamentary Budget Officer states that they received official notice on November 16, that they don't have the information from the CRA, and that they don't feel they can actually prepare the information.

If Mr. Hiebert wants to read his amendments into the record and allow Canadians to believe that these problems are addressed through his amendments, it's totally inappropriate. The information is not there. At least we're getting more enlightenment from my colleague Mr. Boulerice than from the government on this particular bill.

[The Chair, Conservative, James Rajotte]

I want to thank all of you for your input.

My understanding of what Mr. Hiebert was doing was that he was recommending, similar to Ms. McLeod, that we proceed to clause-by-clause consideration, that we proceed to the amendments, because that is where the members of the committee can argue over whether the amendments address the concerns raised by Monsieur Boulerice.

Again, it's a recommendation. Mr. Marston is correct that procedurally we can't move there unless all the members who are on the speaking list consent to move there. Mr. Boulerice has the right to the floor under the motion and under the standing order that Mr. Marston raised.

It was my hope to deal with the clauses in the bill today, but it looks as though we are quickly running out of time. That's my ruling on the point of order.

Mr. Hiebert, Monsieur Boulerice has the floor, and other members are on the list. Unless they consent to do so, we will not proceed to clause-by-clause consideration of the bill.

Monsieur Mai, do you want to raise the issue of the CRA? You indicated in your previous comments that you did.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Yes. What we said regarding the CRA was that according to the motion put forth by Mr. Cuzner and then debated in the committee,

…due to the full agenda facing the Committee, and due to difficulties in scheduling additional meetings, the Committee provide a list of questions to officials from the Canada Revenue Agency regarding the cost of implementation and administration of Bill C-377, by Tuesday, November 13, 2012 at 9 a.m., and that the answers be provided in writing to the Chair of the committee prior to the Committee's clause-by-clause consideration of this Bill.

Between the last studies and today, that is before conducting the clause-by-clause consideration, we received the answer from the Canada Revenue Agency breaking down a number of costs, in particular. However, as we did not have that information until now, today we wanted to talk about the costs outlined to us by the Canada Revenue Agency. A number of witnesses have discussed costs as well. That is why my colleague, Mr. Boulerice, introduced a motion requesting that we discuss these amounts first.

[The Chair, Conservative, James Rajotte]

I just want to clarify that this motion is the motion by Ms. McLeod. The one by Mr. Cuzner is with respect to the Parliamentary Budget Officer. The motion by Ms. McLeod was complied with by CRA officials. Your argument is that you want to consider the responses to them before clause-by-clause examination.

I just want to make sure that we are agreed on that.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Yes, and I want to say that I really appreciate the work that CRA has been doing; it is great. We had a lot of questions, and they answered them.

This has nothing to do with the CRA; on the contrary. I think they are doing an amazing job in giving us information on such short notice. It's not related to CRA; it's more with respect to how this bill was ill-prepared.

[The Chair, Conservative, James Rajotte]

I will make the request again. Again, it's a request, not a point of order. The request is that we proceed to clause-by-clause consideration of this bill, to the clauses and the amendments that deal with this bill.

Mr. Boulerice, it's up to you. You can continue using your time, or we can proceed to examine the bill clause by clause.

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

I insist on my right as a parliamentarian to continue my presentation on the motion submitted to you earlier. This presentation includes important information on the consequences of the bill, particularly the issue of costs related to its administration and the fact that the government will now have to process tens of thousands, even millions of pieces of information. However, the purpose of all that, the objective of the bill and the problem it is intended to solve is not very clear to us. Furthermore, it could well have disastrous consequences for workers and for insurance and pension plan beneficiaries.

Now I will return to the opinion of the Canadian Football League Players' Association, which I had not finished presenting. Before we vote on this motion, I also want to provide you with some other relevant information. I would be remiss if I did not point out the red tape involved and the creation of a new bureaucracy and, in passing, quote someone who I think was right at the time:

“Cutting red tape is a most effective way to show that we are making government work for people, not the other way around.”

[Pat Martin, NDP, Winnipeg Centre, MB]

Who would have said that?

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

That is what Stephen Harper said in January 2011. So I find it hard to understand how a Conservative member can run completely counter to the vision and perspective stated by his own Prime Minister.

With regard to unnecessary costs, the players' association wrote as follows:

As members of the Committee are likely aware, today's low interest rates and fragile world economy have made managing a pension fund and ensuring that adequate benefits are delivered to members more difficult than ever before. Bill C-377 represents additional and unnecessary costs to these plans, and will make the provision of benefits all the more difficult to deliver. Furthermore, it will make the cost of setting up and managing a pension plan more onerous, and this will lead to less plans being instituted by private employers.

The amount of disclosure that is mandated by the Bill is very significant. The Fund has assets of approximately $53 million, and each year, the fund's investment managers enter into thousands of transactions in excess of $5,000. Requiring that each of these transactions be disclosed, along with the name and address of the payer and payee, the purpose of and description of the transaction and the amount that has been paid or received is completely inappropriate and will lead to significant cost. We can see no justification for providing this information to the Canadian public, and we certainly do not see how it relates to increasing the transparency and accountability of unions.

Pension plans require professionals such as investment managers, actuaries, accountants and lawyers in order to function. The nature of the disclosure that is required by Bill C-377 will make it more difficult for pension plans to attract and retain top professional advisors.

This is also a cost and it also has an impact on the pension plans of millions of workers. It will become more difficult to attract qualified people as a result of the obstacles and unnecessary and irritating forms that they are trying to put in place on the other side. I continue:

These individuals may be reticent to accept the position with a pension plan if they know that their fees will be disclosed, along with their name and address, to the entire population of Canada.

Furthermore, investment managers closely guard their investment choices, and will not want those choices to be made publicly available.

I have some very important evidence on this point that committee members should hear. I am going to share it with you soon.

The confidentiality of these choices is part of their competitive advantage. If the investment choices made by the fund's investment managers are not kept confidential and investments in excess of $5,000 must be published, it could negatively impact the performance of the Fund, as these decisions would be public and open to imitation by competitors and could be taken advantage of by counterparties to the transaction. No pension fund in Canada, including those for public servants, is subject to having its investment decisions published on a public website.

As regards the impact on pension fund managers, there is some very interesting information here from Mr. Anderson, who is President of the Multi-Employer Benefit Plan Council of Canada. He wrote a letter to the Hon. Jim Flaherty (Minister of Finance) about the bill before us today. That letter is in English, and I apologize in advance once again if I hurt anyone's ears. I am quoting Bill Anderson:

We are writing in regards to Bill C-377, a private member's bill concerning amendments to the Income Tax Act in regards to labour organizations.

Our organization, the Multi-Employer Benefit Plan Council of Canada (MEBCO), was established in 1992 as a not-for-profit, federal non-share capital corporation. MEBCO's mandate is to represent the interests of Canadian multi-employer pension and benefit plans with provincial and federal governments regarding proposed or existing legislation and other policies affecting such plans.

This is the heart of the matter.

MEBCO’s volunteer Board of Directors is responsible for identifying issues that impact upon multi-employer plans and developing strategies to address those issues. They are elected from all professions and disciplines involved in multi-employer plans, including union and employer trustees, professional third-party administrators, non-profit and in house administrators, actuaries, benefit consultants, lawyers and chartered accountants.

On October 3, 2011, Bill C-317, an earlier version of Bill C-377, was put before the House of Commons...

It changed to C-377, and, Mr. Anderson said,

Unfortunately, despite Mr. Hiebert having this opportunity to amend the bill

after C-317

aspects remain which we believe will have a detrimental and unjustified impact on pension and benefit plans. We have previously written to you about our concerns, and we are doing so again in order to reiterate the importance of rejecting Bill C-377. MEBCO believes that the Bill goes far beyond the intended objective and would impose enormous costs and other implications for many private and—

[Pat Martin, NDP, Winnipeg Centre, MB]

Costs again.

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

Costs again, exactly.

[Pat Martin, NDP, Winnipeg Centre, MB]

The word keeps coming up again.

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

Yes, in every letter. It's a cost for everybody.

The Bill proposes to require disclosure of personal information (including personal health and medical information) which conflicts with legislation already in place. Further, the Bill proposes to duplicate existing financial disclosure requirements applicable to pension and benefit trusts.

On the website for Bill C-377, Mr. Hiebert states that through the operation of the Bill, the Canadian public “will be empowered to gauge the effectiveness, financial integrity and health of Canada’s unions”, and that the purpose of the bill is “to increase transparency and accountability” of labour unions. Just as we noted in our previous letter about Bill C-317, we believe that Bill C-377 goes well beyond Mr. Hiebert’s stated intentions. We are writing to again urge all members of the House of Commons to consider the consequences the Bill will have for multi-employer pension and benefit plans.

In its present form, Bill C-377 would mandate certain disclosure from “labour organizations” and “labour trusts”, as defined. The definition provided for “labour trust” includes “a trust or fund...that is established or maintained in whole or in part for the benefit of a labour organization, its members, or the persons it represents.” ...

We believe that there are several reasons why it would not be appropriate for this Bill to become law due to serious flaws, exemplified by its treatment of pension and benefit plans under the proposals in Bill C-377.

Pension and benefit plans are already subject to extensive disclosure requirements under other provincial and federal legislation. For example, s. 93 of Ontario’s Labour Relations Act, 1995, requires the administrator of a plan that benefits union members to file an annual statement with Minister of Labour setting out various aspects of plan finances. The legislation also requires that a copy of that statement be provided, at no cost, to any union member that makes such a request. Similar disclosure requirements are created by Ontario’s Pension Benefits Act and under sections 12 and 13 of the Federal Pension Benefits Standards Act. A variety of other statutes in Canada impose similar requirements, and moreover, pension and benefit plans are already required to file annual statements with the Canada Revenue Agency. In addition, trustees of pension and benefit plans are subject to stringent fiduciary duties at common law that obligate them to act solely in the best interests of the plan and its beneficiaries. Similar duties arise under pension benefits legislation. Bill C-377 will create additional and unnecessary red tape for a sector that is already in a difficult state.

[A voice]

The Prime Minister doesn't like red tape.

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

Mr. Alexandre Boulerice:

This extra administrative layer does not further the goals of the proposed legislation. Since the transparency and disclosure provided for under existing pension and benefits legislation already ensure plan members and other stakeholders receive sufficient information and disclosure concerning these plans, all that this additional red tape will serve to accomplish is the unnecessary depletion of plan assets reducing the amount available to pay intended benefits to plan members and beneficiaries. These funds have fixed contribution rates and fixed resources, and therefore the cost of compliance will necessarily result in smaller benefits for workers.

If you want to talk about costs, here once again we have some highly relevant evidence on the subject regarding the consequences of Bill C-377. This evidence concerns not only the organization of work at the federal level, but also the benefits that workers could receive and the costs this may represent for these thousands of organizations. They will have to complete mountains of paper on the pretext that Canadians can then be told that such and such a contract over $5,000 was awarded to a supplier or subcontractor and that a particular benefit was given to a member because he or she was entitled to receive it.

Can you imagine if the FTQ's Fonds de solidarité, CSN's Fondaction or the Ontario Teachers Pension Plan were required to disclose all contracts or transactions greater than $5,000? That would be a serious situation.

I do not want to give anyone preferential treatment. Concerns have been expressed by the Football League Players' Association, but also by the National Hockey League Players, who are currently locked out. If we had a labour relations bill before us, we could do something else.

The National Hockey League Players' Association has sent us a letter, signed by Alexandra Dagg, the association's director of operations, that gives us a good idea of the impact this legislation will have on labour associations. This letter raises some interesting questions. It is written in English and reads as follows:

The NHLPA is a democratic, membership-based organization, governed by a Constitution. The players democratically elect representatives from every team, who then make up the Executive Board. The NHLPA financial statements are presented and approved by the Executive Board. Players also elect an audit committee who work closely with the financial staff of the NHLPA and review, discuss and approve the financial statements for presentation to the larger Executive Board. Further, consistent with the requirements of labour relations legislation, any member of the NHLPA can view our financial statement at any time. Decisions are made by the players for the players as to where NHLPA funds are spent.

Bill C-377 mandates detailed public disclosure of the financial operations of labour organizations and labour trusts. Although the Bill is framed as a taxation statute, it seems aimed at placing significant limitations on the political activities of unions. There are serious doubts as to the Bill's legality.

A little earlier, I cited Professor Barré at length on this subject. He said the following:

First, the substance of the Bill relates to labour relations, a matter which falls under provincial jurisdiction under the Constitution. Second, the bill's disclosure and reporting requirements likely would violate the constitutionally-protected freedoms of expression and the association of the union, its members and officers. These disclosure and reporting requirements are much more intrusive than the requirements placed on charities and non-profit organizations.

It's like this bill would create a Big Brother. I don't get it.

[Pat Martin, NDP, Winnipeg Centre, MB]

It's the heavy hand of the state.

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

Yes, the state is in every part of our life, in workers' organizations, pension plans, and trusts.

Going back to the letter,

Finally, the disclosure and reporting requirements contained in the Bill represent a significant incursion into the privacy of unions and their members. Not only is the Bill's legality in doubt but it will impose an additional significant burden on unions while at the same time providing no value to the citizens of Canada.

I believe this letter is extremely interesting. It is very clear on the issues as a whole, which once again bring us back to the motion that we introduced at the start of this meeting, but also to the puerile nature—if I may use that term—of this bill, which, once again, represents,

a costly solution for an absence of a problem.

This will have—

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Boulerice.

As it is 5:30 p.m., meeting number 95 is adjourned.