Russ Hiebert

[Interparliamentary Delegations, December 12th, 2012]

Mr. Speaker, pursuant to Standing Order 34(1) I have the honour to present to the House, in both official languages, the report of the Canadian delegation of the Commonwealth Parliamentary Association respecting its participation in the bilateral visit to India, February 17 to 26, 2012.

[Income Tax Act, December 11th, 2012]

It's been a year and a half.

[Income Tax Act, December 11th, 2012]

Mr. Speaker, just to clarify that, if the member opposite is referring to me, I have never sat on the agriculture committee. I am not sure to whom she is referring.

[Income Tax Act, December 11th, 2012]

I was never on the agriculture committee.

[Income Tax Act, December 7th, 2012]

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.

[Income Tax Act, December 7th, 2012]

moved:

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:

“provided,

“(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.”

[Points of Order, November 29th, 2012]

Mr. Speaker, last week the member for Rosemont—La Petite-Patrie suggested in his point of order that my private member's bill, Bill C-377, requires a royal recommendation before it can proceed to a third reading vote. The basis for his point of order is that the bill would impose additional spending obligations on the Canada Revenue Agency in order for it to implement my bill's requirements that labour organizations disclose financial information to the agency.

O'Brien and Bosc, at page 833, note that there are two types of bills that require a royal recommendation. The first is an appropriation act, or supply bill, which involves the expenditure of funds from the consolidated revenue fund. The second is a bill that imposes new charges for purposes not anticipated in the estimates. Under this category of bill the charges imposed by legislation are “new and distinct” and are not covered elsewhere.

It is clear from an examination of my bill that Bill C-377 does not seek funds from the public purse, nor is the bill a taxation measure. Bill C-377 can be properly characterized as a bill that would require the Canada Revenue Agency to establish some administrative procedures for the receiving of financial disclosures from labour organizations and to make these materials available to the public.

The costs that the member for Rosemont—La Petite-Patrie quoted as an estimate from the Canada Revenue Agency will not be accurate, should the amendments that I will table today in the House be adopted. In particular, my amendments would remove the requirement for cross-referencing, which is apparently a significant cost when managing databases, and it will require that all filings be electronic. Electronic reporting means no paper and therefore no need to transcribe data manually, which should ensure minimum costs in collecting and posting data. It may be argued that at most, Bill C-337 imposes an administrative obligation of the kind that many non-spending or non-taxation bills would impose on government departments when Parliament wishes to regulate some aspect of economic or social activity.

Clearly, the Canada Revenue Agency already has the administrative apparatus to receive documents and make them available on the CRA website. The argument that there would be an additional cost burden on the department may be met by referring to Speaker Milliken's ruling of October, 2003 where he held:

It is important to remember, however, that the requirement for a royal recommendation relates to the expenditure of public funds and not simply to the fact that someone, somehow or other, may be required to make an expenditure as a result of a provision in the bill.

In this ruling, Speaker Milliken held that Bill S-7, the heritage lighthouse protection act, could conceivably require the expenditure of public funds to maintain a lighthouse, but only once it had been given a heritage designation. He ruled that no royal recommendation was required.

In commenting on Speaker Milliken's ruling of October 29, 2003, O'Brien and Bosc note, on page 834, that any additional expenditures that may be incurred by a department in ensuring that a bill's objects are carried out, fall within the department's operating costs, for which an appropriation would have been obtained in the usual course.

In another ruling on February 10, 1998, Speaker Parent considered a point of order as to whether Bill S-3, an act to amend the Pension Benefit Standards Act 1985 and the Office of the Superintendent of Financial Institutions Act, required a royal recommendation because it gave the Superintendent of Financial Institutions additional supervisory powers. While conceding that the enhanced supervisory powers of the superintendent would require additional expenditures by that office, Speaker Parent noted that there was no provision for spending in the bill. The Speaker went on to rule that should an allocation of money be required an appropriations bill would be brought. He said:

Should an increase in resources be necessary as a result of these new powers, the necessary allocation of money would have to be sought by means of an appropriation bill because I was unable to find any provision for money in Bill S-3.

The factual context of Speaker Parent's February 10, 1998 ruling is analogous to the factual context with respect to Bill C-377.

Through Bill C-377, the agency would be given new responsibilities to oversee financial disclosure from labour organizations, much like the Superintendent of Financial Institutions was given new supervisory powers. The bill that extended those powers was held not to require a royal recommendation, since the allocation of money to facilitate the increased responsibilities would be achieved through an appropriation bill should that be required.

The precedents are clear and they could not be any other way. If we consider for just a moment the consequences of ignoring these decisions by past Speakers, any private member's bill that could potentially lead to the need for the allocation of resources, which would be a long list of bills, would henceforth be challengeable as needing a royal recommendation. That would mean that much private members business could not go forward without the consent of the government. Such a scenario would dramatically impact the rights of members of Parliament to introduce and to have considered a wide range of legislation.

I am confident that upon reflection even the member opposite who raised this point of order does not want to see a situation whereby the government has a virtual veto over much of what happens in private members business.

Mr. Speaker, I look forward to your ruling.

[Labour, November 27th, 2012]

Mr. Speaker, will the Government of Canada please state its position on my bill, the amendments and the NDP's scheme to avoid financial transparency?

[Labour, November 27th, 2012]

Mr. Speaker, something happened yesterday that may be unprecedented in the House. The NDP filibustered to try to stop a private member's bill. At the finance committee, for two hours the New Democrats spoke non-stop to avoid a vote on amendments to my bill on labour organization transparency.

Will the Government of Canada—

[Interparliamentary Delegations, November 23rd, 2012]

Mr. Speaker, pursuant to Standing Order 34(1) I have the honour to present to the House, in both official languages, two reports relating to the Canadian delegation of the Commonwealth Parliamentary Association respecting its participation in two meetings, the first held in London, United Kingdom, from December 8 to 9, 2011, and the second held in Tonga, from April 16 to 21, 2012.