Good afternoon. My name is Aaron Wudrick and I am the federal director of the Canadian Taxpayers Federation. I want to thank the committee for the invitation today. I will be limiting my remarks to the provisions of the bill that relate to the rescinding of certain sections of the Income Tax Act as they apply to unions.
For those who don't know, the Canadian Taxpayers Federation is a federally incorporated, not-for-profit citizens group, with over 89,000 supporters across the country. We have three key principles on which we focus all our advocacy. Those are lower taxes, less waste, and accountable government.
Very simply put, the CTF's view is that the sections of the Income Tax Act that will be rescinded by Bill C-4 represent a step backwards in terms of promoting transparency and accountability with respect to taxpayer dollars.
Obviously, there has been and will continue to be a very heated debate coming from both the union and non-union positions on the impact and desirability of these measures. We would merely say that it should not ever surprise the committee that any stakeholder—union or otherwise—who receives a hefty subsidy from taxpayers will inevitably resist attempts to have greater transparency imposed upon them.
In Canada, unions collect about $4 billion annually in member dues and can spend them as they see fit, with no mandatory public reporting. What makes this an issue for the broader taxpaying public is the fact that unions enjoy a range of tax benefits and special tax treatment that ultimately function as a public subsidy for their activities. Specifically, union dues are tax deductible, as is strike pay. These tax breaks have been estimated to have a net worth of about $400 million a year or more.
Charities receive somewhat similar but not as extensive special treatment, and they are accordingly required to file public disclosure in order to maintain their charitable status. This is the reasoning behind calls for public reporting of union finances. Where any entity receives the benefit of a public subsidy, the expectation of transparency is heightened as compared to those who do not receive a similar benefit.
To be absolutely clear, none of our comments here should be interpreted as opposing the political or social engagement of unions. Unions are legitimate stakeholders and should of course be able to engage in political activities. What we at the CTF object to is that unions are being subsidized by the taxpayer to do so. Indeed, we've even taken up the position that political parties themselves should not receive any, or at least, much less generous taxpayer subsidies. Given that they are subsidized, however, we believe that this special benefit should, as I said, attract a higher level of transparency than without the subsidy. This is analogous to our position on the transfer of public dollars to private businesses, also known as corporate welfare. We oppose it full stop, but if it is going to happen, surely the price for receiving a public subsidy should be transparency and accountability to the taxpayers who are footing the bill.
Finally, and with some regret, we would merely note that it is an unfortunate irony that this new government, which was elected on a platform that promised new and unprecedented levels of openness and transparency, has instead, of late, been making some troubling moves in the opposite direction.
While it's fair to say that the CTF does not support the overall fiscal direction of the new government, at least this is an honest disagreement. Contrast this with the transparency issue, where the CTF was very encouraged by and supportive of many of the Liberal Party's campaign promises. Indeed, our view is that the new government got off to a very good start on transparency by publishing ministerial mandate letters. Unfortunately, it's been pretty much been downhill from there.
In addition to the provisions in Bill C-4, the government has ceased enforcement of the First Nations Financial Transparency Act, which risks leaving many first nations in the dark as to the compensation and expenses of their elected officials. There are of course concerns about withholding information from the Office of the Parliamentary Budget Officer, which I won't belabour here, but in all it adds up to less transparency, not more. It flies in the face of the government's own commitments, and harms its credibility in presenting itself as the purveyors of real change, in contrast to their predecessors. We would certainly urge them to reconsider some of these positions, and looking at Bill C-4 would definitely be an excellent place to start.
Thank you.