House of Commons Hansard #194 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was information.


Speaker's RulingIncome Tax ActPrivate Members' Business

1:30 p.m.


The Acting Speaker Conservative Barry Devolin

There are five motions standing on the notice paper for the report stage of the member for South Surrey—White Rock—Cloverdale's Bill C-377, An Act to amend the Income Tax Act (requirements for labour organizations).

While it is not usual for the Chair to provide reasons for the selection of report stage motions, in this case it has been decided to do so given that the Speaker has received written submissions from the hon. members for South Surrey—White Rock—Cloverdale and Cape Breton—Canso, outlining exceptional circumstances surrounding the committee consideration of the bill.

As members know, consistent with the note to Standing Order 76.1(5), the Chair would not normally select motions that could have been presented in committee.

In the present case, however, there appears to be extenuating circumstances. The hon. members who have submitted motions at report stage were in attendance at the meeting scheduled for the clause-by-clause consideration of the bill by the Standing Committee on Finance. In addition, they had both submitted motions in advance of this meeting and these had been circulated to all members of the committee. At first glance, it would therefore appear that the amendments submitted by these members could have been proposed during the committee consideration of the bill.

In his submission, the member for South Surrey—White Rock—Cloverdale explained the efforts that were made to ensure that the committee would actually begin the clause-by-clause study of the bill as scheduled in order to complete consideration of the bill within the prescribed deadlines attached to it. He reported that these efforts were unsuccessful and, as a result, there was no opportunity to propose amendments in committee.

The Chair has been met with this kind of circumstance before. On September 20, 2010, in the Debates on page 4,069, Speaker Milliken ruled on a case where the member for Scarborough—Guildwood faced a similar situation in relation to his Bill C-300, an act respecting corporate accountability for the activities of mining, oil or gas in developing countries. In that case, the Speaker selected report stage motions for debate because it had been established that the member had made clear attempts to have the clause-by-clause study take place so that amendments could be considered by the committee.

Similarly, in the case before us today, the Chair has carefully reviewed the sequence of events as well as the written submissions from the members for South Surrey—White Rock—Cloverdale and Cape Breton—Canso and is satisfied that these motions could not be presented during the committee consideration of the bill.

Accordingly, Motions Nos. 1 to 5 have been selected for debate at report stage. They will be grouped for debate and voted upon according to the voting patterns available at the table.

I shall now propose Motions Nos. 1 to 5 to the House.

Motions in AmendmentIncome Tax ActPrivate Members' Business

December 7th, 2012 / 1:35 p.m.


Rodger Cuzner Liberal Cape Breton—Canso, NS


Motion No. 1

That Bill C-377, in Clause 1, be amended by replacing line 20 on page 1 with the following:

“labour organization is a signatory and also includes activities associated with advice, commentary or advocacy provided by an employer organization in respect of labour relations activities, collective bargaining, employment standards, occupational health and safety, the regulation of trades, apprenticeship, the organization of work or any other workplace matter.”

Motion No. 2

That Bill C-377, in Clause 1, be amended

(a) by replacing line 8 on page 1 with the following:

““labour organization”

includes (a) a labour society

(b) by replacing line 14 on page 1 with the following:

“committee or joint board of such organizations; and

(b) an employer organization, whether or not it has responsibilities related to collective bargaining, such as a federation of employers, a contractors’ organization, a group that provides benefits to the employees of a member employer, a research agency involved in any type of research related to labour relations activities and, without limiting the generality of the foregoing, a corporate vehicle such as a society, corporation, foundation, joint council or board.”

Motions in AmendmentIncome Tax ActPrivate Members' Business

1:35 p.m.


Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC


Motion No. 3

That Bill C-377, in Clause 1, be amended by:

(a) replacing lines 1 to 7 on page 2 with the following:

“(2) Every labour organization and every labour trust shall, by way of electronic filing (as defined in subsection 150.1(1)) and within six months from the end of each fiscal period, file with the Minister an information return for the year, in prescribed form and containing prescribed information.

(3) The information return referred to”

(b) replacing lines 26 to 31 on page 2 with the following:

“assets—with all transactions and all disbursements, the cumulative value of which in respect of a particular payer or payee for the period is greater than $5,000, shown as separate entries along with the name of the payer and payee and setting out for each of those transactions and disbursements its purpose and description and the specific amount that has been paid or received, or that is to be paid or received, and including”

(c) replacing lines 33 to 35 on page 2 with the following:

“(ii) a statement of loans exceeding $250 receivable from officers, employees, members or businesses,”

(d) replacing line 4 on page 3 with the following:

“to officers, directors and trustees, to employees with compensation over $100,000 and to persons in positions of authority who would reasonably be expected to have, in the ordinary course, access to material information about the business, operations, assets or revenue of the labour organization or labour trust, including”

(e) replacing lines 11 to 14 on page 3 with the following:

“consideration provided,

(vii.1) a statement with a reasonable estimate of the percentage of time dedicated by persons referred to in subparagraph (vii) to each of political activities, lobbying activities and other non-labour relations activities,

(viii) a statement with the aggregate amount of disbursements to”

(f) replacing lines 22 to 25 on page 3 with the following:


“(viii.1) a statement with a reasonable estimate of the percentage of time dedicated by persons referred to in subparagraph (viii) to each of political activities, lobbying activities and other non-labour relations activities,

(ix) a statement with the aggregate amount of disbursements on”

(g) replacing lines 33 to 40 on page 3 with the following:

“(xiii) a statement with the aggregate amount of disbursements on administration,

(xiv) a statement with the aggregate amount of disbursements on general overhead,

(xv) a statement with the aggregate amount of disbursements on organizing activities,

(xvi) statement with the aggregate amount of disbursements on collective bargaining activities,”

(h) replacing lines 1 and 2 on page 4 with the following:

“(xix) a statement with the aggregate amount of disbursements on legal activities, excluding information protected by solicitor-client privilege,

(xix.1) a statement of disbursements (other than disbursements included in a statement referred to in any of subparagraphs (iv), (vii), (viii) and (ix) to (xix)) on all activities other than those that are primarily carried on for members of the labour organization or labour trust, excluding information protected by solicitor-client privilege, and”

(i) replacing lines 4 to 13 on page 4 with the following:

“(c) a statement for the fiscal period listing the sales of investments and fixed assets to, and the purchases of investments and fixed assets from, non-arm’s length parties, including for each property a description of the property and its cost, book value and sale price;

(d) a statement for the fiscal period listing all other transactions with non-arm’s length parties; and

(e) in the case of a labour organization or”

(j) replacing line 29 on page 4 with the following:

“contained in the information return”

(k) replacing lines 33 to 35 on page 4 with the following:

“Internet site in a searchable format.

(5) For greater certainty, a disbursement referred to in any of subparagraphs (3)(b)(viii) to (xx) includes a disbursement made through a third party or contractor.

(6) Subsection (2) does not apply to

(a) a labour-sponsored venture capital corporation; and

(b) a labour trust the activities and operations of which are limited exclusively to the administration, management or investments of a deferred profit sharing plan, an employee life and health trust, a group sickness or accident insurance plan, a group term life insurance policy, a private health services plan, a registered pension plan or a supplementary unemployment benefit plan.

(7) Subsection (3) does not require the reporting of

(a) information, regarding disbursements and transactions of, or the value of investments held by, a labour trust (other than a trust described in paragraph (6)(b)), that is limited exclusively to the direct expenditures or transactions by the labour trust in respect of a plan, trust or policy described in paragraph (6)(b);

(b) the address of a person in respect of whom paragraph (3)(b) applies; or

(c) the name of a payer or payee in respect of a statement referred to in any of subparagraphs (3)(b)(i), (v), (ix), (xiii) to (xvi) and (xix).”

Motion No. 4

That Bill C-377, in Clause 2, be amended by replacing line 5 on page 5 with the following:

“comply with that section, to a maximum of $25,000.”

Motion No. 5

That Bill C-377, in Clause 3, be amended by replacing lines 6 to 8 on page 5 with the following:

“3. This Act applies in respect of fiscal periods that begin after the day that is six months after the day on which this Act is assented to.”

Motions in AmendmentIncome Tax ActPrivate Members' Business

1:40 p.m.


Irwin Cotler Liberal Mount Royal, QC

Mr. Speaker, I rise on a point of order. I seek the consent of the House for the following motion, which is particularly timely: That, in the opinion of the House, the government should designate the December 10 each year as national speak no evil day, where parliamentarians and citizens are called upon to partake in a day for the promotion of mutual respect and public civility, deploring (a) the increasing incidents and intensity of assault of an abusive speech in parliamentary discourse and debate and (b) the decline in civility and the corruption of public discourse.

Motions in AmendmentIncome Tax ActPrivate Members' Business

1:40 p.m.


The Acting Speaker Conservative Barry Devolin

Does the hon. member for Mount Royal have the unanimous consent of the House to move the motion?

Motions in AmendmentIncome Tax ActPrivate Members' Business

1:40 p.m.

Some hon. members



Motions in AmendmentIncome Tax ActPrivate Members' Business

1:45 p.m.


Paul Calandra Conservative Oak Ridges—Markham, ON

Mr. Speaker, I rise on a point of order. I understand the bells had started ringing earlier and we did not actually proceed to a vote. Could you explain why we did not proceed to a vote after the bells?

Motions in AmendmentIncome Tax ActPrivate Members' Business

1:45 p.m.


The Acting Speaker Conservative Barry Devolin

The hon. parliamentary secretary asked why the vote was suspended at 1:30 p.m. It was because the time for government orders had expired and moving to adjourn the debate had become redundant at that point.

Motions in AmendmentIncome Tax ActPrivate Members' Business

1:45 p.m.


Pierre Poilievre Conservative Nepean—Carleton, ON

Mr. Speaker, I am not sure I heard you clearly. Did government orders terminate at the regular time?

Motions in AmendmentIncome Tax ActPrivate Members' Business

1:45 p.m.


The Acting Speaker Conservative Barry Devolin

Government orders expired at 1:30 p.m., which is the regular time on a Friday.

Motions in AmendmentIncome Tax ActPrivate Members' Business

1:45 p.m.


Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC

Mr. Speaker, it is a pleasure to rise today to address report stage of my private member's Bill C-377 and the amendments I tabled to improve the bill.

I want to thank you for allowing my amendments to stand. It was disappointing to see the shameful tactics of the NDP members at the finance committee attempting to shut down debate and prevent these amendments from coming forward. This bill reflects the transparency that 83% of Canadians say they want to see from labour organizations. Nevertheless, the parliamentary process is robust and despite the NDP's efforts to prevent improvements to Bill C-377 for the benefit of labour organizations and all Canadians, the amendments I proposed are moving forward again.

There are a number of benefits to my amendments, and before I mention each of the individual changes in the bill, I will highlight a few major areas of improvement in particular.

First, there are several amendments that address the issue of privacy. Over the course of the last year I heard from a number of groups and individuals concerned about how various aspects of the bill might affect them. In particular, my amendments eliminate any uncertainty about reporting requirements for pension plans, health benefit plans and other regulated plans. They will not be required to report under Bill C-377 and neither will benefit payments to individuals from such registered plans. Let me be clear that it was never my intent that registered pension plans or health insurance plans report, or that the pension or health benefit payments that workers or their families receive be published. Regardless, the amendments before the House offer greater clarity that the regulated plans listed in the amendment will not report, and neither will payments from those plans to individuals be reportable under Bill C-377.

I have also removed home addresses from the reporting requirements. This change was especially important to those who serve in labour organizations, particularly for the police. I appreciate the input I received from the Canadian Police Association on the importance of this change.

Additionally, union employees earning less than $100,000 annually will not be identified unless they are in a position of authority. The $100,000 reporting requirement reflects similar legislation that has long existed in Canada, such as Ontario's sunshine legislation for the public service.

The second major area of change is that of cost savings to government. The opposition has been making much of the Canada Revenue Agency's report to the finance committee estimating the costs of implementing Bill C-377. Of course, those cost estimates were based on an unamended Bill C-377.

I have determined that significant cost savings will be achieved by the removal of the requirement that searches of union disclosure data be subject to cross-referencing, and by the requirement that all filings be electronic, therefore eliminating paper filings. Apparently cross-referencing is a feature that can substantially increase the cost of developing databases. While some government websites certainly offer this feature and it might become standard on such sites in years to come, I am not interested in driving up costs for the CRA just to have this feature at this time. Of course, requiring paperless filings can easily be seen as a way of ensuring savings. There will be no need for clerical help to transcribe filings into a usable electronic format and the CRA can take the filing data and post it on its website easily.

These two changes will reduce the CRA's costs substantially. Indeed, the CRA has confirmed that the estimated start-up costs of implementing Bill C-377 with my amendments will be less than one-quarter of what they would have been, and the ongoing costs will be less than half of what it previously estimated.

A third area of change that my amendments would foster is in what will be reported. There are two significant changes here. The first is that less reporting will be required of unions' core labour relations activities. Instead of providing details of spending over $5,000 on such activities as organizing or collective bargaining, an aggregate figure will only need to be reported. This reduction in the level of reporting detail required should lower the cost to labour organizations of complying with Bill C-377.

Second, for transactions where there is a potential for a conflict of interest, a so-called related party transaction, there will be full reporting on the details of those transactions. An example of a related party transaction might be when a labour organization buys a parcel of land from one of its directors. Bill C-377 does not comment on the appropriateness of such a transaction. It merely requires that it be reported. I believe everyone will agree that full transparency is called for when it comes to related party transactions.

I would like to address a few issues that have been raised by critics of the bill during its committee consideration and elsewhere.

First, critics have asked why the general public should be able to see the financials of unions they are not members of or contributing dues to. As we know, labour organizations operate tax free and their members receive full income tax deductibility for their dues and payments and receive their strike pay tax free. The deductibility of dues alone costs the federal treasury in the range of a half a billion dollars a year. I believe there is a genuine public purpose served by requiring financial transparency in all institutions that receive a substantial public benefit. It exists in government, crown corporations, charities and most recently on native reserves. Now we are extending transparency to another set of institutions that enjoy public benefits, that being labour organizations.

Second, critics have said that a $1,000 a day fine seems designed to punish labour organizations. Compliance with Bill C-377 will not be an onerous burden, but there has to be a deterrent for non-compliance, as the official opposition already implicitly recognizes. In the present Parliament, Bill C-205, in the name of the NDP MP for Hamilton Mountain, seeks to impose a fine of $1,000 per day for non-compliance with the new section of the Canada Labour Code. This is the precise amount of the fine in my bill. The NDP cannot have it both ways.

Third, critics have suggested that other than tax-free status, labour organizations do not actually receive any special subsidies or public dollars. Rather it is their members who do. While it is correct that many of the benefits accorded to labour organizations under the Income Tax Act, such as the deductibility of dues, are indirect rather than direct benefits, the effect is still the same. The benefits were created to support and maintain labour organizations.

The same is true of charities. Charities also do not receive public dollars or special subsidies. Instead, a direct tax benefit is given to donors. That benefit was clearly created for the purpose of supporting and maintaining charities. Just as it is legitimate to ask charities to publicly disclose how they spend the money that is ultimately derived from this public benefit, it is just as legitimate to ask labour organizations to do the same.

Fourth, a few have suggested that Bill C-377 would place unions at a disadvantage in labour negotiations, given that management would know details about the union's finances and its ability to sustain a strike. However, it is obvious that the willingness of workers to withdraw their labour in a bargaining dispute is based on far more important considerations than simply the amount of cash in the strike pay fund. The fact is, American and British unions, and for that matter a good number of Canadian unions which are already required to report in the U.S., have lived with financial transparency for a long time and it does not appear to have affected their ability to bargain effectively.

Another criticism sometimes levelled against Bill C-377 is that the list of financial items would be larger than required of charities. It is true that the list of statements that they would file is longer, but it simply recognizes the fact that labour organizations are more complex and administer a wide range of funds for activities, such as training, education and so on.

Finally, some critics have said that it is unconstitutional. They say that the bill nominally amends the Income Tax Act, but its real purpose is to regulate labour organizations, which is sometimes a provincial matter. That is simply inaccurate. The bill does not regulate labour organizations and does not tell them how to spend their money. In requiring labour organizations to file a report, my bill does not even require an audit. The bill would amend a federal statute, namely the Income Tax Act. The bill is only concerned with matters that already fall under the Income Tax Act that have long been constitutional. I would refer critics to the existing sections of the Income Tax Act and to the fact that charities have done so for 35 years and no one doubts that it is constitutional.

I hope all members will consider how the amendments I have put forward will improve Bill C-377 and support these amendments when the bill comes up for a vote.

Motions in AmendmentIncome Tax ActPrivate Members' Business

1:55 p.m.


The Acting Speaker Conservative Barry Devolin

Resuming debate.

In order to participate, members must be sitting in their own seats. Is the hon. member for York Centre rising on debate?

The hon. member for York Centre.

Motions in AmendmentIncome Tax ActPrivate Members' Business

1:55 p.m.


Mark Adler Conservative York Centre, ON

Mr. Speaker, I appreciate the opportunity to speak in favour of today's important pro-worker legislation.

Motions in AmendmentIncome Tax ActPrivate Members' Business

1:55 p.m.


The Acting Speaker Conservative Barry Devolin

There is a point of order.

The hon. member for Ottawa Centre.

Motions in AmendmentIncome Tax ActPrivate Members' Business

1:55 p.m.


Paul Dewar NDP Ottawa Centre, ON

Mr. Speaker, you have heard numerous times from us that we actually call the question. You looked and asked three or four times. The member was not in his place and was not ready. You heard us. I am wondering why you did not call the question.

Motions in AmendmentIncome Tax ActPrivate Members' Business

1:55 p.m.


The Acting Speaker Conservative Barry Devolin

The hon. member for Ottawa Centre has asked why the Chair went back two or three times. As this hon. member and other members know, it is the practice in this place that speaking order sequences are provided to the Chair. In this case, all caucuses provided the Chair with speakers. There appears to be some disagreement between the lists provided to the Chair and those who wish to participate in the debate.

In the first case, a member who was on the list chose not to participate. In another case, a member who was next on the list was not sitting in his own seat. It is prudent that the Chair ensure that members in this place who would like to take part in a debate have an opportunity to do so. There appeared to be confusion in this place. The hon. member for York Centre was next on the list and was sitting in his place. He did rise from his place and on that basis is recognized.

Resuming debate. The hon. member for York Centre.

Motions in AmendmentIncome Tax ActPrivate Members' Business

1:55 p.m.


Mark Adler Conservative York Centre, ON

As I was saying, Mr. Speaker, I am in favour of today's important pro-worker legislation from the member for South Surrey—White Rock—Cloverdale. I also want to thank all my colleagues on the finance committee and the many witnesses who appeared before it who shared their thoughts and concerns during our study of today's bill.

I certainly applaud the member for South Surrey—White Rock—Cloverdale for listening to the feedback we heard and for making some important amendments to this landmark legislation to address some legitimate concerns and to make a good bill even better.

Before starting my speech, let me acknowledge and highlight the work of its sponsor, our Conservative colleague from British Columbia, the member for South Surrey—White Rock—Cloverdale. The member has truly done an incredible amount of homework and research on this legislation before Parliament today. He is to be applauded for his efforts in standing up for workers, not union bosses, as the NDP have.

Since his successful election in 2004, the member for South Surrey—White Rock—Cloverdale has been a strong voice in Ottawa for his constituents and is widely respected as a parliamentarian. Little wonder, then, that for the past three elections, when his constituents went to the ballot box, they asked him to keep standing up for their concerns in Parliament. Today he builds on his record of advancing ideas and proposals that make Canada better with this important and long overdue piece of legislation, especially for Canadian workers.

Before I continue, I urge all Canadians who are watching at home today to write down the following Internet address on a piece of paper: This Internet site provides lots of additional information about this proposal, including actions Canadians can take to help ensure its success, such as filling out a petition or writing to their member of Parliament.

Let us now take a moment to examine the background of the bill, which would require transparency and public disclosure for organized labour organizations that receive considerable tax benefits.

All parliamentarians recognize that labour organizations play an important role in Canadian society by advocating on behalf of workers to ensure their health and safety on the job and appropriate wages and benefits. However, parliamentarians also recognize that the federal government provides substantial benefits to unions to support them in their work. Notwithstanding the generous tax benefits, unions are not required to disclose their financial activities in any significant detail.

As the member for South Surrey—White Rock—Cloverdale has said, this bill is designed to provide for the financial disclosure of how those public benefits are used and how the dues of everyday workers are used. It would give workers and all Canadians simple openness and transparency to ensure that their dues and their taxpayer subsidies are not being abused by union bosses, as we have seen all too frequently. Indeed, only recently, the Canadian Union of Postal Workers sent a five-member delegation to attend a Free Palestine conference in Brazil and then demanded that taxpayers pay for it.

This kind of public disclosure will affirm and increase Canadians' trust in the work of these organizations, putting it in line with most other industrialized countries. For instance, it should be pointed out that disclosure requirements for labour organizations in Canada are in stark contrast to those in the United States, where detailed filings are publicly disclosed and are available on the website of the United States Department of Labor. Indeed, it even captures some Canadian unions affiliated with their larger American chapters.

Even France, a country with a strong left-leaning tradition, has ushered in rules that force unions to post their financial activities online, something unions themselves requested to improve trust and their reputations. It is time Canadian workers had the same rights as their American and European brothers and sisters, to use labour-speak.

I should note that registered Canadian charities have long been required, for over three decades, to disclose similar information. Indeed, this is, according to independent polling data, exactly what Canadians have been asking for. For the benefit of this House and all those Canadians watching at home on television or listening online, I would like to share some of this important independent polling data.

Specifically, the well-respected Nanos Research firm recently conducted a survey of Canadians and asked about their impressions of unions, particularly with respect to financial transparency and their use of union dues. This report entitled, “State of the Unions 2011”, is the second survey of its kind conducted by Nanos. One thousand and one employed Canadians were polled between July 20 and July 25 of 2011. I would like to share with Parliament this important finding taken directly from the Nanos survey. It stated:

Findings showed that working Canadians surveyed agreed with greater financial transparency on the part of unions...83% of Canadians agreed with mandatory public financial disclosure for both public and private sector unions on a regular basis.

Support for mandatory disclosure of financial information by unions was strong across Canada, with over 70% of Atlantic Canadians saying yes, over 90% of people in Quebec agreeing, nearly 80% in the Prairies and over 85% in British Columbia. Even more impressive, a whopping 85% of unionized workers agreed that it was time for mandatory union disclosure of financial information. That overwhelming support has been reflected in a lot of public commentary that we have heard on Bill C-377 in the past year. I would like to take a moment to share some of that feedback with the House.

The Canadian Federation of Independent Business stated:

—we feel that requiring unions to publically disclose how they spend those dollars will bring some measure of transparency to their operations, especially in light of on-going news that unions are using those funds to back certain political parties and candidates throughout Canada.

I should note that even some union leaders themselves have stood up and said they would support this push for more transparency and we applaud them. For instance, CAW Local 444 president Rick Laporte told The Windsor Star, “I don't have a problem with it...Our books are always open to our members and anybody can come to our meetings and see our financials”.

A noted think tank had this to say this on the matter, “members would like to see where their dues are spent, and if that money was used to better the lives of said rank and file members, not fund exotic trips to communist get-togethers for union officials”.

I agree and that is why I ask all members to stand up for workers and support the member for South Surrey—White Rock—Cloverdale.

Motions in AmendmentIncome Tax ActPrivate Members' Business

2:05 p.m.


Pierre Poilievre Conservative Nepean—Carleton, ON

Mr. Speaker, on a point of order, the member suggested that it was a communist gathering.

Motions in AmendmentIncome Tax ActPrivate Members' Business

2:05 p.m.

An hon. member

This is not a point of order.

Motions in AmendmentIncome Tax ActPrivate Members' Business

2:05 p.m.


The Acting Speaker Conservative Barry Devolin

Resuming debate, the hon. member for Rosemont—La Petite-Patrie.

Motions in AmendmentIncome Tax ActPrivate Members' Business

2:05 p.m.


Alexandre Boulerice NDP Rosemont—La Petite-Patrie, QC

Mr. Speaker, I would have liked to say how happy I am to rise in the House to speak to private member's Bill C-377. That is not entirely true, however. I will spend a few minutes talking about it today. Everyone knows I have much to say on the subject. It is worrisome to me, as it is to the NDP, the labour movement as a whole, labour organizations and other associated organizations.

I would remind all members that the labour movement is the greatest democratic movement in our country's civil society. More than four million workers strong, it ensures that Canada and Quebec are, generally speaking, great places to live. Our working conditions, wages and occupational health and safety standards are what keep this country's economy running. Whether in the city or in the country, people can patronize businesses. They can go to restaurants and purchase goods. This historic legacy of the labour movement deserves to be recognized in the House. The very existence of the middle class is due in no small part to the battles that unions have been fighting for decades now.

Bill C-377 is obviously an odd bill because it is not transparent in the least. Generally speaking, a piece of legislation or legislative proposals are introduced to right a wrong, improve a situation, remedy a flaw or bring in measures that will benefit our constituents. It is not very clear what problem this bill is attempting to solve.

First, what is the objective or the goal of this bill? Where is it headed? It is not at all obvious. We have been told that more transparency is needed. The Canada Labour Code already requires unions to provide financial reports to members who request them. That is the law in seven out of 10 provinces. Last year, there were 4.1 million unionized workers and six complaints were filed. Six people said that they did not have access to documents and information to which they were entitled. Few organizations have a complaint rate as low as six out of 4.1 million.

There really is no problem. The Conservatives are trying to solve a problem that does not exist. This bill will create red tape and a bureaucracy and be very costly, not just for the unions, but also for ordinary citizens. Canadians will have to pay for the Conservative Party's whims. That is what is truly unfortunate about Bill C-377.

I mentioned it a few times when speaking in English to journalists who were scratching their heads. They were wondering what the government was doing and why it introduced the bill. I told them that I could not figure it out myself.

It is a really costly solution for a problem that does not exist.

I very much like the expression “if it ain’t broke, don’t fix it”. Everything is fine, so I do not know why anyone would insist on imposing an additional administrative burden on labour organizations, which are the economic mainstay of our country and contribute to the vitality of our production. These are the people who produce our goods and services. They are also the ones who drive our economy, by living their lives and consuming goods.

So what are the mission and purpose of this bill? We do not really see its usefulness. Nor does the Canadian Bar Association, which, in its presentation, had a wonderful sentence about not really understanding what this bill was trying to accomplish.

I mentioned the costs, and that is definitely the first thing that needs to be discussed. This bill will be very costly for the organizations involved and for all taxpayers. The Canada Revenue Agency conducted two assessments. It did a cost analysis and estimated that it will cost $2 million for first two years, and then $800,000 a year indefinitely. That is the figure for 1,000 reports, since it assessed only about 1,000 organizations that would be affected.

According to the Parliamentary Budget Officer's review, some 18,000 organizations will be affected. So that means it will cost not $2 million, but $2 million times 18. And that is just the initial budget forecasts. We have already seen estimated costs increase over time, instances when the cost seemed rather low or reasonable at first. We have seen that here at the federal level, but the municipal and provincial levels have seen it, too.

I think this is a slippery slope of red tape, paperwork and extra bureaucracy that will serve no purpose and will only be a waste of money.

We have a federal government that is slashing public services to Canadians. We have a Conservative government that wants to eliminate nearly 20,000 jobs, even though those employees are there to serve Canadians. At the same time, the Conservatives want to create new administrative obligations, even though they are making cuts.

How can the Canada Revenue Agency possibly take care of these 18,000 reports—18,000 copies' worth of fastidious, useless work—with fewer employees? I cannot wait to see that. How can it be done? No one has been able to answer that simple question. Actually, I do not see how this can be accomplished.

This legislation is aimed directly at democratic and transparent labour organizations: they are required by law to provide their members with this information. The bill creates a pointless burden. Why are these organizations targeted while others are not?

The other side argues that, since union dues are tax deductible, labour organizations' accounting books and financial reports should be open to everyone. Please note, however, that the people who need to know how their money is spent are those who pay union dues, and they already have that information.

In the interest of fairness, and to avoid discriminating against union organizations, the same rules should apply to everyone. For example, professional associations that also collect union dues and benefit from tax deductions, are not targeted by this bill. Apparently, it is not important for them to be because the tax benefit they receive should not force them to disclose all of their financial reports, even though the unions have to do so.

Why such a double standard? Why such a direct attack against unions?

We received part of an answer in parliamentary committee, when a Conservative member clearly said that this was not a matter of transparency at all and that it was a matter of what kind of involvement unions and the labour movement had.

Such is the basis of the Conservatives' thought process. It is not a matter of transparency. What they want is to stick their noses into the business of the labour movement. They want to know how much a particular union has spent on an awareness or public information campaign, a safe workplace campaign or a campaign to improve the pension plans of all Canadians. They want to stick their noses into the business of labour organizations and snoop around.

A fair rule should be applied to all organizations in Canada: as soon as they receive a tax benefit of some sort, their books should be open. That would be just great: thousands of organizations, businesses and companies would be required to disclose everything. It does not make any sense. If this does not make sense for companies and other organizations, then why impose it on the labour movement?

In closing, I am going to point out a few things. There are still major problems in this bill relating to privacy.

We have a Conservative government whose ideology is that government should not interfere in people’s lives. We have colleagues who are really libertarians. They like small government, but suddenly, when it comes to the labour movement, it is time for big government. They want to know everything; they want to see everything. If someone receives a benefit of some sort, like pension or disability benefits, their name is going to end up on a website. People will be able to do a search and see it.

What is the public interest? How does it enhance the common good in our country and how are we a better society if personal information about people’s lives is disclosed?

From the standpoint of the Constitution, this is a serious invasion, and I do not understand why a Conservative government is getting involved in it. Quite aside from what it will cost, this is not a bill that deals with the Canada Revenue Agency as such.

This is not a bill that deals with tax policy. It is a bill that deals with the organization of our labour movement and unions, and ultimately with labour relations. Under section 92 of the Constitution, those areas are subject to provincial legislation. We are going to end up in court. That will cost taxpayers more money, because of mismanagement and bad decisions on the part of the Conservatives.

Motions in AmendmentIncome Tax ActPrivate Members' Business

2:15 p.m.

Cypress Hills—Grasslands Saskatchewan


David Anderson ConservativeParliamentary Secretary to the Minister of Natural Resources and for the Canadian Wheat Board

Mr. Speaker, I hope to put a little light on the subject. The member opposite seems to have been more interested in fear-mongering than in actually dealing with the content of the legislative proposal.

I want to thank you, Mr. Speaker, for the opportunity to speak about Bill C-377, which is sponsored by the MP for South Surrey—White Rock—Cloverdale.

Before I get into the details of the bill, I would like to begin today by taking a few moments to speak about the importance of labour organizations. All of us know that they play a crucial, multi-faceted role in our society.

Motions in AmendmentIncome Tax ActPrivate Members' Business

2:15 p.m.

Some hon. members

Oh, oh!

Motions in AmendmentIncome Tax ActPrivate Members' Business

2:15 p.m.


David Anderson Conservative Cypress Hills—Grasslands, SK

I do not understand why the opposition would be opposed to labour organizations. It seems that we are getting some heckling from members on the other side who do not agree with us when we say that they play a crucial, multi-faceted role in our society. They contribute to the Canadian workplace in many ways. Currently there are over four and a half million workers who are union members, representing over 25% of Canada's civilian labour force.

Strong labour management relations contribute to our country's economic prosperity and the economic security of all Canadians. Labour organizations play a direct role as advocates for organized labour. They are also important in the negotiation and enforcement of collective agreements and labour standards. Further, these organizations have played a pivotal role in the past in advancing some of the most fundamental improvements in the workplace. Issues they have contributed to include advocating for fair wages, reasonable working times, providing training and learning for employees, protecting vulnerable workers, improving working environments for women and promoting compliance with and enforcement of labour laws across Canada.

As a part of that, these organizations are given generous benefits through the tax system. Labour organizations are exempted from tax on their income, and members are entitled to deduct any dues paid to such organizations. Notwithstanding these generous tax benefits, labour organizations are not required to disclose their financial activities in any significant detail. This is despite the fact that they are democratic organizations supported by dues-paying members and are subsidized by the Canadian tax system.

We believe that democratic values go hand in hand with openness and transparency. Today's bill proposes to amend the Income Tax Act by requiring labour organizations to file a standardized public information return with the Canada Revenue Agency each year. Currently, there is no separate information return for labour organizations. By requiring such a return, the bill promotes better accountability to Canadians.

The bill will also improve the quality of information provided by labour organizations to their members and to the public at large. This would be done by requiring such organizations to submit not only their financial statements but also separate schedules that provide specific details on the activities in which a labour organization engaged in any given year and the amounts devoted to those activities. Examples of the information a labour organization would be required to report include details on any loans it made, its investment activities, the amounts spent on labour relations activities, as well as amounts paid to executives and on general administration.

Information submitted by labour organizations would be made available on the website of the CRA in a searchable format. In this regard, today's bill would enable members of labour organizations to satisfy themselves that their organization is operating in an appropriate manner. Canadian taxpayers would also have access to this information, making labour organizations more accountable for the generous tax benefits they are provided.

Finally, the bill proposes that any labour organization that did not file an annual information return within six months from the end of its fiscal period would be subject to a monetary fine for non-compliance. Quite simply, we believe that since labour organizations are provided the privilege of a tax exemption, they should be accountable to Canadians on how they operate and spend their funds.

In addition, there is concern about the quality of the information being provided by labour organizations. Even where disclosure requirements exist, these are often limited in scope. While some jurisdictions require that audited financial statements be disclosed to members, this, again, is not uniform across Canada. Further, financial statements present only limited financial information and may not provide information about the amount spent by labour organizations on particular activities important to their members, such as salaries paid to the executives or details of their political activities.

The level of detail disclosed in financial statements is generally left to the discretion of the organization. While members not satisfied with the disclosure may be able to approach their labour relations board to require their union to provide additional more-detailed information, this may be a cumbersome and expensive process and may deter many workers from accessing the information.

I will also highlight that registered charities are required to provide information to the CRA that is subject to public disclosure. Registered charities are also given generous tax advantages by the tax system.

First, as are labour organizations, registered charities are exempted from paying income tax. Second, in recognition of the valuable services provided by charities, the Income Tax Act provides special incentives to encourage Canadians to donate. Registered charities are given the privilege of being able to issue official donation receipts for any gifts that they receive. Donors then use these receipts to reduce their taxes payable. To ensure that registered charities are accountable to Canadians for these tax privileges, all registered charities are required to file a registered charity information return, which is published on the CRA's website. This information enables the CRA to ensure that registered charities are operating in compliance with the rules and that they devote their resources exclusively to charitable activities. Transparency around this information also enables donors to verify their donations are being used appropriately and to determine which organizations they want to support. Through enhanced disclosure, Canadians can give with confidence, knowing that donations of their hard-earned dollars are used to support legitimate charities.

The registered charity information return contains information similar to that which has been proposed by the hon. member for South Surrey—White Rock—Cloverdale. In addition to filing financial statements, which are available to the public, registered charities must file detailed information as to how they carry on their activities each year. While I am not proposing to provide an exhaustive list of these requirements, I will take a minute to highlight a few.

All registered charities are required to provide information regarding the charitable programs they carried on throughout the year, including details on any new programs. Charities must also provide detailed financial information regarding their financial activities during the year. The information generally includes: the charity's assets and liabilities; the charity's sources of revenues, including the total amount for which it issued donation receipts; income earned from business activities and the amount of government grants received; and the charity's expenditures, including the aggregate amount spent on charitable activities, administration, fundraising and political activities.

Further, to ensure that charitable resources remain within the charitable sector, when a charity makes a gift of its funds to other charities or other qualified donors it must attach a detailed statement that lists the organization to which it gifted the funds as well as the amount given. Charities are also required to provide specific details around other issues of importance to Canadians, such as the amounts they devote to foreign charitable activities, the salary levels paid to their highest-compensated employees as well as the amounts they pay to professional fundraising companies. The transparency regime for registered charities is an important tool in helping to ensure that Canadians can give with confidence to registered charities and that those charities are accountable for the tax privileges granted to them under the Income Tax Act.

In summary, I believe the proposals contained in the bill are consistent with those principles of transparency and accountability. These organizations are provided generous tax benefits in the form of exemption from income tax and the deductibility of dues paid by members. These organizations should be accountable to the public as well as to their members as to how they carry out their activities and how they are spending their resources. I therefore encourage all members to support the principles of the bill.

Motions in AmendmentIncome Tax ActPrivate Members' Business

2:25 p.m.


Malcolm Allen NDP Welland, ON

Mr. Speaker, first of all, let me help my friends learn a little about how this actually works, as I am probably the only member of the House who was the financial officer for a large union. I spent eight years of my life doing that.

This whole idea that the government is suggesting, that there is this lack of transparency and that unions do not tell anyone anything and all of this information is hidden away from the membership somewhere in a secret vault, is absolute hokum. I will explain how this works, especially to my friend who lives nearby.

Any expenditure beyond $100 needs ratification not only from the executive board but from the membership. That is right, all of the membership gets to vote on any expenditure beyond $100. The limit of any local union, and any union pretty much across the country, to expense money on behalf of its members is only up to $100.

When is that information reported to union members? It is reported monthly. This information is related both verbally and in writing. In my case, that is exactly what I did.

There is that dreaded audit that all of us fear on our income tax, but unions audit themselves continuously. These audits are conducted by outside auditors. In my case, KPMG used to do the audit. At one time, KPMG did an audit every six months because the organization was so large, but it eventually became a yearly audit.

Who else comes to visit unions? The folks who collect provincial taxes come to visit. They want to find out if the union has a hall that it rents out because taxes have to be paid on those things. They come and check the taxes as well.

Therefore, this idea that somehow there are no checks and balances in the system, that somehow the membership does not understand where the money is spent, or somehow we just collect the money, give it away and never tell anybody who we give it to is just false. That is not true. The membership always knows exactly where its money is spent. Members have the absolute democratic right when they do not like a particular expenditure to say no to it. They also have the right not to vote for a person the next time.

I can tell my colleagues across the way that I guess we did this so well, at least in my union, that I was elected three times as the financial officer. The members had no fear about how their money was expensed because they were always told how their money was expensed. In fact, we were more open than this government when it comes to the budget. The government had an omnibus budget bill that had less amendments to it than Bill C-377. That bill was so poorly put together in the first place that the Conservatives almost had to rewrite it to make it conform and be palatable to someone, but I have no idea who.

Clearly, this is not a bill that is supposed to be informative for union members or the general public. This is simply a bill that attacks unions across this country. There is no need for it and it should not be passed. It should just die on the order paper—