Human Resources Committee on May 2nd, 2016

[Dan Ruimy, Liberal, Pitt Meadows—Maple Ridge, BC]

Again, I'm stuck on this notion that you, the CBA, shared your concerns about the impact of the bill on pension and benefit plans. Is there anything you want to add, on the impact of benefit plans and pensions?

[Michael Mazzuca]

Registered pension plans were exempt through some amendments, but they were one of the very few instances of an exemption. Other items, such as retirement compensation arrangements, training benefits—all of those—were not exempt.

The definition of a labour trust under Bill C-377 was broad enough to include any fund that had union members in it. That's a pretty broad definition. Union members participate in many funds, many of which are not even connected to a trade union, and all of those would have potentially been caught by Bill C-377.

[Dan Ruimy, Liberal, Pitt Meadows—Maple Ridge, BC]

It's clear to me from your concerns that your association expressed concerns to the government at the time about the constitutionality of this bill. Do you feel that they heard you? Did they give you any reason why they weren't going to follow any of your opinions?

[Michael Mazzuca]

All I can say is that we made our submissions. We made our appearances. Nobody then spoke to us about why some suggestions were not being heeded. I don't know what actually transpired. All I know is what submissions we made.

[Dan Ruimy, Liberal, Pitt Meadows—Maple Ridge, BC]

Okay, thank you very much. I'm going to share my time with Ms. Tassi. She has one minute.

[The Chair, Liberal, Bryan May]

Yes, very briefly. We do have to move on to the next panel. So if you have one quick one that's great.

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

Mr. Yussuff, in regard to these bills, you were very adamant that any change in the Canada Labour Code should be done in a consultative, consensus driven, tripartite manner. Do you still believe that?

[Hassan Yussuff]

Yes, I do.

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

FETCO said that even though they believed in the spirit of Bill C-525, they knew it was flawed because it was done through private members' business. Do you think that the code should be changed to address replacement workers using private members' legislation, like the legislation the Conservatives moved with Bill C-525 and Bill C-377?

[Hassan Yussuff]

I can't comment on what private members can table. Obviously, private members are going to continue to table whatever legislation they think is appropriate. However, I think the Canada Labour Code should be a consultative process, and as such, ensure that both employers and unions have an integral part to play in that process. If we're not consulted, sometimes the law could have unintended consequences.

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

So the tripartite process is the preferred process with respect to major changes to the Labour Code.

[Hassan Yussuff]

Yes.

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

Mr. Mazzuca, I know you're here as a representative of the Canadian Bar Association, and we've heard about the extent of your membership. When you made your comments here, your comments were representative of the membership.

Could you comment with respect to the opinions that you have heard. I know judges vary on opinions, but could you represent the overall opinion on the question that was asked previously?

[Michael Mazzuca]

The positions that the Canadian Bar Association takes are consensus positions. They are all vetted by the different law sections, in this case the privacy law, constitutional law, and pension benefits law sections. They are then vetted by the branch chairs in each province, and then by the executive of the Canadian Bar Association, as well as the Legal and Law Reform Committee. We don't vote on every submission but we certainly try to build a consensus,. Where there's no consensus, we take no position.

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

And is there a consensus here?

[The Chair, Liberal, Bryan May]

Thank you very much.

That concludes this panel. I want to take the opportunity to thank all of our panellists for coming out and speaking to us today. Thank you very much.

Committee, we will be breaking for a very short recess while we get the next panel in, and then we'll be right back at it. Thank you.

[The Chair, Liberal, Bryan May]

Let's come to order, please.

Folks, thank you for coming back. We have from the Canadian LabourWatch Association John Mortimer, president, and from the Canadian Taxpayers Federation, the federal director, Aaron Wudrick.

Gentlemen, thank you both for joining us. We're going to give you an opportunity to present your opening statements. We have a full docket today, so if you could keep those to about seven minutes, that would be fantastic. Thank you very much.

Mr. Mortimer, if you would like to, please take the lead.

[John Mortimer, President, Canadian LabourWatch Association]

Honourable members, please look at appendix A of our submission. The current web page of the largest Canadian local of the Labourers' International Union says this about union cards:

Don't sign anything! You do not have to sign anything. Don't be tricked into signing something “to get more information”.... It's just a sneaky way to get a...[card signed].

The horse's mouth speaketh the truth. Union organizers lie.

Employees might be told the card is just to get more information or just to get a vote, but in card check jurisdictions, unionization is the goal and the result of this trickery.

The Minister of Labour, union leaders, academics, and labour boards point to the low number of rulings about such union tactics. The three most relevant reasons are as follows.

For decades, labour boards have ruled that card-signing tactics are not the employer's business. In 2005 the Canadian board stated: “Any disquiet about undue influence or coercion into signing... should be brought to the Board's attention by the employees themselves.” Unions have plenty of talented professionals and outside labour lawyers, funded by their $4 billion to $5 billion in revenue, to challenge employers and competing unions, but with labour boards telling employers to sit down and shut up, it's simply not credible that employees have any practical ability to file charges against unions and miss work to show up and litigate them, let alone to afford a lawyer instead.

Sadly, labour board rulings allow unions to lie to unsuspecting workers. One board ruled that a fraud against an employee is not a fraud against the board and did nothing about it.

Then there is outright card fraud. We got a small peak at the underbelly of a union's tactics in British Columbia via the Purdys case, in which the union was caught, but only years later, for forging employee signatures onto cards.

Is there a political party in this country that has not experienced real problems with card-based membership drives ahead of nomination meetings? Does any of your parties call a membership card a vote? All unions that I know of run their internal affairs with votes and not with cards.

In 1977, Nova Scotia's workers became the first Canadians to get legislated access to a bulwark of workplace democracy, a statutorily guaranteed secret ballot vote, which this bill steals back from federally regulated Canadians.

Appendix C includes a table summarizing the key provisions of Canada's 11 private sector labour codes. Every year in the seven vote jurisdictions, in government-run elections, workers still have been unionized. Even in Nova Scotia, after 37 years of workplace democracy—news flash!—unions have not disappeared. Labour relations have not been set back to the age of the Flintstones there in comparison with card check jurisdictions.

Voting is criticized for reducing the rate of new unionizations. Of course it does so, because votes reflect what informed employees making a government-protected private choice actually want. Getting unionized by trickery, as the labourers' union points out to its members, in a situation in which workers have no real means of litigating and proving the outcome—that is going to be the federal reality for Canadians, if Bill C-4 is not amended or pulled back by the Trudeau government. Stealing the vote from the weakest party, the party that is not at the table with FETCO and the Canadian Labour Congress, and giving the card check back to Canada's executive suite of union leaders is simply wrong and undemocratic. As the Labourers Union rightly implies, a card is not a vote.

Shifting gears. it is very troubling that Bill C-4 is a single bill that also amends the Income Tax Act to take away financial disclosure. MP Hiebert modelled his Income Tax Act of Canada amendments on the American system, which some Canadian unions already comply with. That U.S. law started as the Kennedy-Ervin bill. Yes, none other than Democratic Senator John F. Kennedy and his brother Bobby led the charge at a Senate committee and as President Kennedy implemented the legislation he had championed in the Senate.

Our submission has extensive and accurate content on financial disclosure to factually correct the complete misrepresentations by numerous labour leaders about the state of union disclosure and privacy law in Canada.

Our submission includes proof that workers have had to fight unions over years in the legal system to get even minimal disclosure—proof that there is nothing for taxpayers and watchdogs to hold government of the day accountable to enforce the existing union dues tax deductibility provisions of the Income Tax Act. That is what Bill C-377 was set to finally enable for Canada's now even more-indebted taxpayers.

If you look at appendix E, you will see that across Canada's 11 provinces and three territories and the federal jurisdiction, there are some 32 labour codes—32. Only 10, less than one-third, have any provisions at all dealing with financial disclosure. Nine of those 10 only mandate disclosure to actual union members. Under nine of these codes, unionized employees, who must pay dues as a condition of employment or be fired from their jobs, are not entitled to a shred of financial disclosure at law. Only one of 32 labour codes covers those types of dues payers. There is nothing required under those 32 codes for taxpayers.

In our submission we have the actual wording that will show you how little those provisions actually provide.

Union leaders, and those aiding and abetting their huge campaign to hide from taxpayers and dues payers, have led you to believe that they all disclose, that they must disclose. One union leader wrote that labour boards keep financial statements on file, for the asking. Plain and simple: not one labour board collects and keeps them. That was another lie.

The CRA can go back seven years in our tax returns, but labour boards have repeatedly denied access beyond the most recent fiscal year when a union refused to expose, took union dues, and fought the workers at the labour board and won to keep the prior years secret.

Let's make this even more real. Appendix B in our submission is the cover page from a 2014 petition to a local of the PSAC from workers of the federal government looking for detailed disclosure. As of last week, since 2014, Robyn Bensonhas been silent.

The labour code of these employees is the Public Service Labour Relations Act of Canada. It is one of the 22 labour codes out of 32 that has not a single disclosure requirement for those workers to get access to what's going on at PSAC.

Under the 10, the mere 31% that have limited provisions, I have never read a labour board ruling that ordered any detail. Labour boards just order an income statement, maybe a balance sheet—two pieces of paper—for a $90 million union. That's not disclosure.

The most important topic, finally, that we address relates to the range of assertions that these Income Tax Act provisions had no Income Tax Act purpose. We respectfully disagree. Appendix I contains our very detailed analysis of the act, CRA interpretation bulletins, and Tax Court case law.

Two provisions of the Income Tax Act, paragraph 8(5)(c) and subsection 8(5), read like this: Dues are not deductible to the extent levied for any purpose not directly related to the ordinary operating expenses of the union.

We simply do not know, as taxpayers in this country, if it's $100 million being inappropriately spent, or $1 billion inappropriately spent.

Finally, Bill C-4 should be split in two. Respectfully, for this committee, I do not understand it, as a Canadian, to be constituted to serve Canadians as an Income Tax Act expert. The truth is that Bill C-4 is a form of omnibus legislation moving forward in a rush that reverses achievements of the last Parliament for taxpayers and workers as a political strategy to pay back the union executives who helped this government win its last election.

[The Chair, Liberal, Bryan May]

Thank you, Mr. Mortimer.

I apologize, Mr. Mortimer, but a lot of folks around the table don't have in front of them the documents you referred to.

[John Mortimer]

I brought written copies previously, but I was told not to bring them this time because you were working electronically.

[The Chair, Liberal, Bryan May]

Yes, they were emailed. I'm just explaining some of the confusion. These were emailed. If, for whatever reason you do not have them, we'll make sure they are sent out again.

[John Mortimer]

I'm sorry. Otherwise, I would have brought written copies again but I was asked to save trees.

[The Chair, Liberal, Bryan May]

Thank you.

To Mr. Wudrick, for seven minutes, please.

[Aaron Wudrick, Federal Director, Canadian Taxpayers Federation]

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.

[The Chair, Liberal, Bryan May]

Thank you, sir.

Our first question goes to Mr. Deltell.