Finance Committee on Nov. 26th, 2012

[The Chair, Conservative, James Rajotte]

Again, I'm prepared to rule, but, Mr. Mai wants to speak on this.

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

Yes, definitely, on the second—

[The Chair, Conservative, James Rajotte]

Okay. We're getting into debate on a point of order, so it's just to the point of order very specifically, and then I'll make my ruling.

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

If Mr. Adler had been listening, my colleague started with a number that came out from CRA. I would recommend that either he withdraw his comments or apologize to my colleague.

[Pat Martin, NDP, Winnipeg Centre, MB]

Yes, that's right.

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

If he hasn't been listening and tells someone that the person has not mentioned one number, that's going too far, Mr. Chair. That's not respecting our colleague, when the first thing he did was mention the number that CRA gave us, so I do hope that Mr. Adler will apologize and that he will consider what my colleague has been saying and maybe now listen more carefully to his thoughts.

[The Chair, Conservative, James Rajotte]

With respect to your point of order, Mr. Adler, as you know and as I've mentioned before and as has been defined by many speakers, relevance is defined very broadly. Further to that, the motion itself is fairly broad:

That this Committee, pursuant to S. O. 97.1, recommends that the House of Commons do not proceed further with Bill C-377, An Act to amend the Income Tax Act (requirements for labour organizations), in order to protect the integrity of the government's budget framework.

That is a very broad motion. It's very difficult for me, as the chair. I would say that Mr. Boulerice may be testing the bounds of relevance, but I can't declare any of his comments not relevant.

We'll go back to Monsieur Boulerice, s'il vous plaît.

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

Thank you very much, Mr. Chair.

I will continue, and since we have colleagues here who want figures, I will take the liberty of repeating them.

According to the Canada Revenue Agency, it will only cost $10.6 million to implement Bill C-377. We received that information this morning.

It's $10.6 million for the first two years. I really want to be sure that you understand my numbers.

[The Chair, Conservative, James Rajotte]

Please go through the chair.

On a point of order, go ahead, Mr. Adler.

[Mark Adler, Conservative, York Centre, ON]

On a point of order, Mr. Chair, he said “you”.

[The Chair, Conservative, James Rajotte]

Yes, comments go through the chair. Let's keep this debate very respectful and make all of our comments through the chair.

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

Thank you, Mr. Chair.

I repeat, we have figures on this point.

[The Chair, Conservative, James Rajotte]

He always listens very carefully to everthing—

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

I am entirely convinced of that. I was at not all casting doubt on your listening ability, which has been put to the test in recent weeks.

Some questions about costs are indeed related to the administration of Bill C-377. The Canada Revenue Agency tells us it will cost $10.6 million to administer the bill in the first two years and $2.1 million ongoing for the following years. These figures are valid for approximately 1,000 union organizations or labour organizations. By comparison, the treatment of charities costs $33 million a year and requires 300 federal public servants to work full time on this matter to review the evaluations and reports of all charities in receipt of tax benefits.

I would like to introduce a new point in the discussion. This is not the only question the Canada Revenue Agency answered in the information it sent us today. On the contrary, a second question was asked, and it is very interesting and relevant: Have the costs of administering the requirements of this bill been included in the estimates presented to the House of Commons? The answer is no.

The Canada Revenue Agency tells us that the point of order I raised with the Speaker of the House of Commons last week does seem founded since the estimates include no budget item or vote for the administration of this new expenditure.

Sometimes, and this has happened in the past, the implementation of new ways of verifying things or recording certain information or certain items ultimately resulted in much higher costs than those initially forecasted. We therefore have a legitimate fear that this may be the case with Bill C-377, particularly when we consider that it is not 1,000 union organizations that will be affected by this bill, but rather 25,000.

When you examine all the answers the Canada Revenue Agency sent us today, there is absolutely no reason to be reassured by or comfortable with this bill. Instead we fear there will be an excessive and unnecessary increase in red tape and in the number of forms to complete for organizations that simply have better things to do, whether it be providing service to their members or increasing their members' assets. This burden will be imposed not only on the union organizations as such, but also trusts and pension funds, which will also be affected by this. They must make investments. They do not have the time or money to take in their members' pension contributions and then complete the paperwork that this bill would inevitably create.

I am going to cite an open letter that I wrote on this matter and that was published in the National Post. Please pardon my terrible accent in English. If we are going to talk about money, about costs and impacts, let's talk about the impact that will be felt on our economy. The title of my letter was:

“Targeting unions is hurting the financial markets”.

It continues:

Canada's economy is in a fragile state. Just last week, the IMF lowered its forecast for global growth due to ongoing instabilities in the United States and the Euro Zone, as well as the slowdown of the Chinese economy. Meanwhile, TD Bank lowered its estimates for economic growth here in Canada for 2012, and is projecting only modest growth for 2013 and 2014.

You would figure that in times like these, the federal government would be cautious in the legislation that it supports. But sadly, the Conservatives' partisan instincts have taken precedence.

Take bill C-377 for example. On its surface, it aims to bring transparency to union finances. Yet, to achieve this aim, the Conservatives could be imposing a massive clampdown on our financial markets and costing business—both big and small—millions in lost revenue.

Most private member's bills live and die in obscurity, as they have no chance of passing. C-377, however, appears to have the blessing of both the Prime Minister and the Finance Minister

—but these days they don't get along a lot—

and could become law by the end of the year.

Essentially, this Conservative bill would require any labour organization, including pension funds and health plans, to publicly disclose all aspects of any expenditure over $5,000. The bill does this by prying open business contracts and causing the confidential details to be posted on the Canadian Revenue Agency’s website. This includes everything from office rental and photocopier leases to consulting, legal and financial services. This would force businesses to either turn down valuable customers or have their entire business model disrupted.

The potential damage of this Conservative bill is even more dangerous when it comes to the financial markets. The reporting requirement applies to all market transactions by union pension funds and any firms managing their assets. These pension plans make up the second largest source of investment capital in Canada, after chartered banks, with assets of over $1-trillion dollars. Amongst these assets are significant amounts of Canadian stocks, bonds and real estate.

Beyond imposing obvious difficulties associated with reporting all transactions on billions of dollars in financial assets, the bill likely will lock pension funds out of engaging in private-equity deals. This will drastically reduce the flow of Canadian dollars into such deals, decrease Canadian ownership, and hurt the bottom line of Canadians’ pensions.

The reporting requirements also will create a massive bureaucracy for all involved. For a mid-sized pension fund covering several thousand workers, C-377 would mean over 11,000 financial transactions would need to be reported a year. For the largest pension funds, this could run into the millions.

Putting aside the economic impact, this bill would represent a massive invasion of privacy, as pension funds that come from union plans will be forced to report the name and address of hundreds of thousands of pensioners to the government every year. That, too, will also be made public.

[The Chair, Conservative, James Rajotte]

Mr. Boulerice, excuse me.

Go ahead on a point of order, Mr. Jean.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

I listened with interest, of course, and with bated breath to every single statement made by the member. I notice that he's dealing with the motion or the bill as unamended. Of course, he would have received a copy of the amendments that I will be moving today if we ever get to that point. One of those amendments would change some of that, and it clarifies that registered pension plans, health benefit plans, and other registered plans do not have to file the information that he's referring to.

In fact, what he's relying on for his motion is not actually covered in this and would be changed by the amendments.

[The Chair, Conservative, James Rajotte]

It may be a good point, but it's a point of debate, not a point of order.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

He's debating the wrong issue, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Whether he's debating the wrong issue is not.... It's not debate.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

He hasn't had an opportunity to look at the amendments. I'm not sure if he actually read them to recognize that there are compromises.

[The Chair, Conservative, James Rajotte]

He moved his motion before the amendments were presented, so....

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Maybe if he had an opportunity to hear the amendments, he would actually be able to support them.

[The Chair, Conservative, James Rajotte]

I assume he's had an opportunity to read the amendments.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

You never know.

[The Chair, Conservative, James Rajotte]

Okay.

I've ruled that it's not a point of order. I don't see any further need for discussion on a non-point of order.

Okay. Encore....