Human Resources Committee on May 2nd, 2016

[Wayne Long, Liberal, Saint John—Rothesay, NB]

I just think—for the record—that you misrepresented that earlier.

Thank you.

Mr. Wudrick, welcome.

[The Chair, Liberal, Bryan May]

You have about a minute, sir.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

You suggested that the transparency brought by Bill C-377 would act as a deterrent to unlawful activities. What do you base that assumption on?

[Aaron Wudrick]

It's not an assumption anymore than it is when I say that we call on MPs and senators to scan and post their receipts online. It doesn't mean that everything that MPs and senators spend money on is illegal or wrong, but it makes it more likely that it will be detected sooner, because the public can see it.

[The Chair, Liberal, Bryan May]

You have about 30 seconds. You're good...?

[Wayne Long, Liberal, Saint John—Rothesay, NB]

I can keep going.

Can you give me a situation where unlawful activities of the type you mentioned arose because of the lack of oversight?

[Aaron Wudrick]

I'm not sure if I meant unlawful so much as that the purpose of the dues be known to the person paying. That's my concern.

It's that if you're paying union dues and your understanding is that they're going towards the management of the union, but in fact they're going towards political advocacy or activism, for example, as the person paying those dues, I would want to be aware of that. Having transparency would let me know.

[The Chair, Liberal, Bryan May]

Mr. Zimmer, please.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

I wanted to ask you to explain a fundamental difference. We've heard a lot of comparisons between charities and unions. Can you explain the fundamental difference between a union and a charity in terms of tax reasons and mandatory dues?

Let's start with Mr. Wudrick.

[Aaron Wudrick]

I think the difference is quite obvious. Much like taxes, dues are mandatory. You cannot opt out of them.

In fact, unions are unique in that sense, in that they have essentially the power to tax in the way that governments do. That is also the reason why we draw a similar analogy when we talk about why transparency requirements incumbent upon governments should also be imposed on unions: because they have a special power that no businesses—which obviously must get customers in order to generate revenue—or charities, or non-profits have.

A group like ours receives no mandatory money. If we do not keep our donors happy, we go out of business. That is not the case for governments, and it's not the case for unions.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

I'll hopefully not take too much time, but as a former union member I still remember my first union meeting as a member of the BCTF. In that meeting, as a newly minted teacher, I sat there just wanting to listen to what was going to go on. In that meeting, I was told how to vote in the next provincial election.

In that particular meeting, they were chastising anybody who wouldn't vote for the NDP. That offended me because, for me, the union should be non-partisan in nature because they've received my dues, and they shouldn't be instructing me on how to vote in a particular election, regardless of whether it's federal, provincial, etc. That was my thought.

What are your thoughts on that, Mr. Mortimer?

[John Mortimer]

These are the kinds of stories we hear all the time, the one that you experienced. I think paragraph 8(5)(c) of the Income Tax Act talks about ordinary operating expenses of the union. Tax court case law, in a CRA interpretation bulletin, says a union that gives money to the Vancouver International Film Festival isn't spending it on normal operating expenses and, therefore, that those dues aren't tax deductible.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

I'll go into the next phase of this particular teachers' meeting I was at.

After that particular discussion, I challenged the then president by saying that shouldn't be going on. It was the next conversation I had that was troubling, as well. I saw my union dues being used to campaign for the NDP provincially and also advertise for the local NDP candidate in our union paper. That to me was problematic.

Your thoughts on that, Mr. Mortimer?

[John Mortimer]

Bill 377 was going to bring that all out into the open. If you look at the SR and ED interpretation bulletins and the case law of the CRA, what you see is that the time that people spent was assessed by the CRA in terms of whether or not it complied with that part of the tax act.

When people leave their day job where they should be pursuing grievances and bargaining, and they go out and they work on a campaign, or they go out and do something that is unrelated to that employee's workplace, that would not qualify under the Income Tax Act of Canada as a tax deductible due for the paying of the salary of that person.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

I'll bring this all together. If unions supported us, I would be happy. I don't think unions should support political parties, period. To say another thing, I thought it was interesting that the provincial premier of Ontario has a seven-point plan come out where she says that union dues will not be allowed as part of a political contribution. To me, it shows that even Kathleen Wynne is moving in the correct direction with regard to union donations. The key difference is that it's a captive audience. As a dues paying member, I don't have a choice as to where those dues are being paid. They're not meant for that in the first place. They're meant for other union issues, and bargaining, and other mandates they're given.

As a last question, and it's a big one, you've alluded to the fact that you would rather fix both acts than get rid of them. Mr. Wudrick and Mr. Mortimer, how would you fix both acts? I think you probably have 30 seconds each to respond.

[John Mortimer]

There was nothing wrong with the secret ballot vote bill. We have votes for decertification, but we don't have card check decertification. This government is going back to a dishonest, non-level playing field for workers by putting it back to the old way where they have to get 50% plus one and endure a vote, and the unions are going to get the card check system back.

[Aaron Wudrick]

I would say on Bill 377, and the issue which seems to centre around the granularity and detail of disclosure, could we not simply move toward a level that would put people at ease in terms of the information not being so commercially sensitive?

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

I think the key is accountability, and that is why we enacted the legislation to begin with.

[The Chair, Liberal, Bryan May]

Moving on to Ms. Tassi, you have maybe three minutes.

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

My question is for Mr. Mortimer. The LabourWatch website says, “Members must be committed to the purposes of LabourWatch, be nominated by another Member, and be approved by the Board of Directors”.

LabourWatch is a closed member organization, but it receives tax benefits for itself and its members by virtue of being tax exempt and funded through members' dues that are tax deductible. That is correct, isn't it?

[John Mortimer]

The fundamental difference remains that nobody has to fund us, and nobody has to join the Retail Council, or the CFIB, in order to operate a retail business or to operate a small business in Canada.

Once again it's apples and oranges to compare the power unions have in statute law. There is no statute that guarantees the CFIB any money whatsoever and none for the Canadian Taxpayers Federation. The same is not true of unions. You're sitting here trying to play trap-me games by comparing apples and oranges, and I will not go there.

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

I'm speaking specifically of the tax benefit. Would you agree that you get the same tax benefit?

[John Mortimer]

No, we don't.

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

What is different in the tax benefit? I'm not talking about dues, or membership fees, or—

[John Mortimer]

It's the totality of the system.