Russ Hiebert

[Foreign Affairs, February 29th, 2012]

Mr. Speaker, it was 20 years ago this week that a most brutal incident in a tragic war took place.

Canada remembers the Khojaly massacre where hundreds of civilians were gunned down by Armenian forces as they fled their hometown in Azerbaijan. According to the Government of Azerbaijan, the death toll was 613 civilians, including 106 women and 83 children. The massacre was one of many atrocities each side was alleged to have committed during the Nagorno-Karabakh war. The war killed over 30,000 soldiers and civilians and displaced more than one million people.

While the displaced have been resettled, 20 years later the Nagorno-Karabakh region is still occupied by Armenia. The border region remains a place of scattered but deadly clashes.

However, there is hope for a peaceful settlement in this long-running conflict. Armenia and Azerbaijan are talking to each other and we encourage them to resolve this dispute at the negotiating table.

[Income Tax Act, February 6th, 2012]

Mr. Speaker, this came up early on when I introduced the bill. The reality is that this is a private member's bill and not a government bill. I started working on this bill more than a year ago. I started drafting it in June of last year. Therefore, any suggestion that this is anything other than my own initiative is simply false.

[Income Tax Act, February 6th, 2012]

Mr. Speaker, again, as I put it in my remarks, I do believe in public disclosure and I do in fact believe that perhaps other institutions that receive substantial public benefits should be evaluated in terms of the amount of disclosure required of them.

However, with a private member's bill, I am limited in what I can cover, and that is why I have chosen this particular topic. I am open to the question as to whether or not other organizations that receive public benefits, like charities, should also be required to make disclosures.

[Income Tax Act, February 6th, 2012]

Mr. Speaker, I am baffled at the opposition of the NDP to this bill.

Not only do unions already have the means to collect this information, but they already submit it to the CRA. That is why there is no additional cost to the unions to do this.

More to the point, the member is suggesting that my party or I am somehow against union members or union organizations. That is simply not the case at all.

It is my belief that this bill will actually increase the confidence that Canadians have in labour organizations, because they will see the value produced by these institutions and that the money is well spent. As I said to the member earlier in my speech, 83% of Canadians want this information and 86% of union members polled want this information. The number is even higher in Quebec, where I have done much media and the latter are very supportive of this initiative.

[Income Tax Act, February 6th, 2012]

moved that Bill C-377, An Act to amend the Income Tax Act (requirements for labour organizations), be read the second time and referred to a committee.

Mr. Speaker, it gives me great pleasure to speak to my Bill C-377.

Labour organizations play a valuable role in Canadian society, representing and defending the rights of workers.

Four million, three hundred thousand Canadians are currently union members, and millions more have been during their working lives.

There are thousands of Canadians in my riding of South Surrey—White Rock—Cloverdale, British Columbia, who pay dues to labour organizations. Because of the valuable role unions play in the lives of many Canadians, our federal tax system has provided benefits to support the work of unions. Key among those benefits are a 100% tax deductibility for the union dues that workers pay and tax exempt status for the labour organizations themselves.

I would like to put the value of the dues deductibility into perspective. The federal government forgoes $795 million in tax revenue each year for union and professional dues. The majority of this amount is claimed by union members, probably in the range of $400 million to $500 million. This is a substantial public benefit. I believe it is only right for the public to know how that money is being spent. Therefore, my bill would require the public disclosure of the finances of labour organizations.

This measure is in line with the greater transparency that we are demanding from government departments, public agencies and native reserves. It is in line with the public disclosure required of other Canadian institutions that benefit from significant public funding.

For instance, public disclosure has been required for Canadian charities since 1977. The filings of charities are easy to find on the Canada Revenue Agency website.

I have based my requirements for public disclosure for labour organizations on the long existing provisions for charities in the Income Tax Act. With the passage of the bill, the public would be empowered to gauge the effectiveness, financial integrity and health of any labour union. This is something that Canadians want. According to a Nanos poll taken on Labour Day of last year, 83% of Canadians and 86% of union members want public financial disclosure for unions.

I would like to take a couple of minutes to run through the various provisions in the bill.

Clause 1 is the heart of the bill and can be considered in three parts.

First, there are three new definitions that would give greater clarity to terms already used or proposed in the bill. They are “labour organizations”, “labour relations activities” and “labour trust”.

Second, comes the lengthiest part of the bill: the statements of income and expenditures that must be submitted annually to the Minister of Revenue by labour organizations.

I have received plenty of input concerning the statements that would best illustrate how unions use their public benefits to help their members. The list is a long one, reflecting the often complex financial character of unions and the broad range of activities they undertake as they represent and serve their members.

Among these activities may be organizing, collective bargaining, education and training, conferences, political activities and lobbying. The required statements would also include disbursements to directors and to staff. As Jim Stanford, economist for the Canadian Auto Workers, recently pointed out, these figures are already published by the CAW. I believe that this level of detailed public disclosure would increase the confidence of Canadians that the public subsidy for labour organizations is warranted.

Third, subclause 1(4) would require that the information submitted be made available to the public by the minister, including posting on the Canada Revenue Agency website.

Clause 3 would have this act come into force six months following royal assent.

Since this bill was announced last fall, it has been interesting to receive feedback from various sources including union leaders themselves. First is a comment from Lerona Lewis, president of the Association of Graduate Students Employed at McGill, representing over 3,000 employees. She said her union already publicly discloses. She said, “You can go online to look to see what was spent, when it was spent, and so on”. And she says transparency is “something we believe in anyway”.

Ken Georgetti, president of the Canadian Labour Congress, sees things a little differently. He agrees with public disclosure generally, saying, “We're not opposed to transparency. We're more than happy to supply [the member for South Surrey—White Rock—Cloverdale] or anyone else with our financial statements and our balance sheets as corporations file”. However, he goes on to say that, because my bill would ask for more detail than is currently requested from other institutions, “it's not fair and it's not equal”.

Mr. Georgetti may be correct that it is time to review the public disclosure requirements for other types of institutions receiving public benefits to determine if they also need improving. The finance committee is looking at the question of increasing the level of transparency for charities. However, this private member's bill deals specifically with labour organizations which have never been subject to public disclosure, unlike charities, that have been subject to public disclosure for over 35 years.

Mr. Georgetti also raises a concern that compliance with this bill may be costly for unions. I disagree for three reasons. First, unions already file detailed financial returns with the CRA, providing much of the information that would be required by this bill. This is a point Mr. Georgetti has acknowledged. Second, this bill would not require audited statements. Therefore, filing would not impose any additional outside expense on labour organizations. Filing could generally be prepared by their own bookkeeping or financial personnel. Finally, because of bookkeeping software and electronic filing, the cost of compliance with these sorts of requirements has dropped considerably from where it might have been in generations past.

The government's document production cost will be minimal once the electronic production system, the database and the website are in place.

Members do not have to take it on faith, though. We have an independent and qualified watchdog in the form of the parliamentary budget officer, who examines private members' bills and gives feedback on their estimated costs. I believe that the PBO's analysis will confirm that this bill would not create significant costs to the government.

The comments from other Canadians are also interesting. A columnist for The Windsor Star, a strong union town, is supportive of the bill. He only regrets that it is not retroactive, as he would like to see how his union dues have been spent in the past. The communications director of the Alberta Union of Provincial Employees, David Climenhaga, said the following of unions:

Many publish their complete audited financial results, in spite of the fact this is not required by law, and distribute them to 100 per cent of their membership. Any member of the public, of course, may access that information. Such complete openness seems to do them no harm.

Mr. Climenhaga suggests that the same level of transparency be extended to think tanks and private corporations that benefit from tax breaks and subsidies.

Of course, usually the member introducing a private member's bill is granted the privilege of introducing and speaking to his or her bill before any other members. Unfortunately, as members will be aware, the member for Windsor—Tecumseh jumped the gun and started the debate before this allotted hour under the guise of a point of order. Despite the positive comments of various union leaders, union members and others who I have just referenced, the NDP House leader suggested last fall, in debating my earlier bill, that he was very disturbed by the idea of public accountability for labour organizations. He stated that this bill was a matter of ideology. I would ask him if the introduction of public disclosure for charities way back in 1977, 35 years ago, was a matter of ideology.

If there is an ideology, it is based on the principle that organizations that receive public benefits should be accountable to disclose how they use those benefits. Does the member believe that charities should no longer have to publicly disclose their spending? What about government departments, crown corporations or even members of Parliament? Where does the opposition to this bill logically lead? As I stated earlier, I believe that public disclosure would increase the confidence of Canadians that the several hundred million dollars in public benefits they provide to unions each year is money well spent. Does the NDP not agree that public disclosure would indeed prove this?

Further, the member complained about the additional costs he believed disclosure would cause unions to incur. As I mentioned, using tax software and electronic filing, the costs to labour organizations would be quite minimal. Filing is not a new activity for unions. Unions already file tax returns each year. Much of the information proposed to be collected under this bill is already required. The difference, of course, is that this information would be made public. However, that difference alone would create no cost for labour organizations.

The member has raised the concern that the filing requirement could be onerous for small locals of perhaps a few dozen members. That is again not so. Small locals are, by definition, small spenders and may not have spent anything in several of the categories mentioned in the bill. What can be easier than putting a zero on several pages of an electronic form? I believe that the experience of charities over the last 35 years is instructive. The process has not bogged down charities, which, unlike unions, are often run by volunteers alone. The process has not cost them significant sums of money, and the same would be true for labour organizations.

The debate on this bill is just getting under way. Some have already taken a position on it. I would encourage those who have already stated opposition to the bill to consider the following facts. The bill would not tell union leaders how to spend their money or restrict them in any way. The bill would not place a substantial burden or expense on unions. Unions are already engaged in responsible accounting. Many unions are already publicly reporting this financial information to members and others. Finally, all unions are already filing much of this information with the Canada Revenue Agency through their tax returns.

Simply put, this bill would require that information to be made public. As I said before, people want to know how unions use their public benefits.

I believe that asking for that type of transparency is legitimate. Both the public and MPs can learn more about this bill on a dedicated website I have set up. The address is www.c377.ca.

I would encourage all members of this House to consider the merits of this bill and support it going forward for further study at committee.

[Income Tax Act, December 5th, 2011]

moved for leave to introduce Bill C-377, An Act to amend the Income Tax Act (requirements for labour organizations).

Mr. Speaker, it is my privilege to introduce a bill that would amend the Income Tax Act for labour organizations.

Labour organizations play a valuable role in society, representing and defending the rights of workers to health and safety on the job and ensuring that they have proper compensation for the work they do. As a result of the valuable role that they play, our government has provided substantial benefits through the Income Tax Act to support the work of labour organizations.

This bill would amend the Income Tax Act to require the public disclosure of labour organization finances. Public disclosure will help the public better understand how the benefits that are provided are being utilized. This is in line with the increased transparency we have introduced for government departments, agencies and native reserves. It is also in line with the public disclosure required of charities and political parties, which also receive substantial public benefits through the tax system.

I want to note that public disclosure is strongly supported by the Canadian public and by union workers themselves.

(Motions deemed adopted, bill read the first time and printed)

[Interparliamentary Delegations, November 22nd, 2011]

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 three reports: first, the bilateral visit to the Caribbean, the Americas and the Atlantic Region Republic of Trinidad and Tobago; second, its participation at the parliamentary seminar for the Republic of Trinidad and Tobago; and third, its participation at the 35th Commonwealth Parliamentary Association Regional Conference of the Caribbean and the Americas and the Atlantic.

[Human Rights, November 15th, 2011]

Mr. Speaker, unfortunately there are still many places where people do not enjoy the freedoms that Canadians have.

Lately violence has flared in Egypt at the expense of the Coptic minority, who have been attacked and killed in their places of worship. Our Subcommittee on International Human Rights has just heard testimony about this situation.

Clearly, more has to be done to protect minority rights.

First the extremists who plan and carry out these violent attacks need to be brought to justice, and the government of Egypt must act to physically protect minorities as they go about their daily lives.

As Egypt heads into elections, the transitional government must ensure that these elections are both free and fair, a process that would include inviting international observers to monitor the vote.

When the new Egyptian parliament convenes, the new constitution it writes must ensure that the religious freedoms of all Egyptians are fully protected in law.

[Points of Order, November 1st, 2011]

Mr. Speaker, I appreciate the opportunity to respond to the member for Windsor—Tecumseh, who again has raised certain objections to my private member's bill, Bill C-317. I must note that the member did not raise a single objection or make a substantive argument in response to my rebuttal, nor can he.

To reiterate, it is simply the case that Bill C-317 does not give any additional taxation power to the Canada Revenue Agency that it does not already have. It merely enumerates two of the most relevant of those already existing powers. To be specific, the CRA already has the power to revoke a labour organization's tax exempt status and revoke dues deductibility. The CRA has the power to do this for several different types of violations of the Income Tax Act, including the one that is specifically identified in this bill, the failure of a labour organization to file a return.

As the bill does not grant the CRA any new powers to revoke tax exempt status or dues deductibility, there is no new ability created to collect extra revenue.

Only the requirements surrounding what must be included in a public information return are new. Let me emphasize that labour organizations must already file returns. They already face consequences for failure to file returns. The tax consequences for failure to file returns already exist. Those tax consequences are not increased or changed by the bill. The only thing that would change is what information is required in the public information return.

While the public information return I propose is not onerous, it is probably more detailed in some areas than what is currently required of labour organizations. However, requiring more detail than may be presently expected does not mean requiring more tax or a new tax. It is already the case that a labour organization could refuse to file its currently required tax return, and it could face losing its tax exempt status and dues deductibility as a result.

Under my bill, a labour organization could also refuse to file its tax return, including the new public information return that I propose, and it would face the identical consequences.

Let us use the member's own example of a dues-paying worker whose income was slightly below the second income tax bracket and was forced to pay taxes because of lost dues deductibility.

The member used an example to fit the definition of creating a new taxpayer, as it states in Beauchesne's, “an extension of the incidence of a tax so as to include persons not already payers”.

The example could be a realistic scenario; I do not debate that. However, it makes no difference. Using the same example, the same dues-paying worker could be forced into paying taxes right now if his or her union refused to file its tax return today.

Nothing would change for that dues-paying worker with the passage of my bill. The power to create a taxpayer out of the dues-paying worker in the member's example was granted to the Canada Revenue Agency a long time ago. My bill does nothing to change that.

Frankly, that is the long and the short of it. My bill's sole purpose is to ask for more detailed information and to make it public. It does not impose any additional or new tax consequences on a labour organization or its members.

A different point the member raised in his response concerned the requirement of unionized employees to pay dues. Of course, in my response I did not dispute the requirement to pay dues, nor did I suggest that it was discretionary under certain labour contracts. Instead, I pointed out that employees always have the option to choose which union they want to represent them.

Again, Mr. Speaker, if you read the transcript carefully, you will see that the member did not address the substance of the point that I raised. Instead, he was merely dismissive of the well-established fact that union members can decertify their existing union and certify another one. In Canada this happens all the time for a variety of reasons with which the member is undoubtedly familiar.

I greatly suspect at this very moment if a union local deliberately violated the Income Tax Act by refusing to file a return and put its tax exempt status and its member dues deductibility at risk, its members would take action. One of those possible actions would be, as I stated, to decertify the union and bring in another. As the member himself pointed out, unions are democratic institutions, so another action might be to democratically remove the board of the local and install one that would comply with the law and thus preserve the dues deductibility of members.

The bottom line is that while it may be mandatory to pay dues, dues-paying employees do have options, including whether or not to pay their dues to a labour organization that qualifies for dues deductibility under the Income Tax Act.

However, regardless of the choices that union members may make, Mr. Speaker, I would urge you to focus on my major point, that there is no difference in the potential tax consequences in the scenario of a labour organization failing to file a tax return under the present Income Tax Act versus a labour organization failing to file under the amendments proposed by my bill.

Finally, let me note that both in his point of order and in his later response, the member disappointingly used a considerable portion of his remarks to engage in actual debate over the substance of my bill. He raised issues clearly unrelated to his point of order over ways and means, such as what he falsely assumes my bill would cost unions and his favourite theory about the strategy behind my bill.

The proper place for the member to raise these issues would be the time allotted for private members' business, and I would be happy to correct the member on his faulty arguments during that time.

[Points of Order, October 25th, 2011]

Mr. Speaker, I appreciate the opportunity to respond to the point of order raised by the member for Windsor—Tecumseh regarding my private member's bill, Bill C-317. The thrust of the argument was that my bill would do something that only the government is allowed to do.

The history behind this is that, within our parliamentary system of democracy, only ministers of the day have the authority to propose new taxes. Before they are allowed to propose a tax, they must bring forward a ways and means motion to notify the House of Commons of their intention.

At page 900 of the House of Commons Procedure and Practice, second edition, it states:

The House must first adopt a ways and means motion before a bill which imposes a tax or other charge on the taxpayer can be introduced. Charges on the people, in this context, refer to new taxes, the continuation of an expiring tax, an increase in the rate of an existing tax, or an extension of a tax to a new class of taxpayers.

Thus, this has been a limitation on the use of private member's bills.

No one is suggesting that Bill C-317 proposes a new tax, or is the continuation of an expiring tax, or an increase in the rate of an existing tax. The member is only trying to object to my bill on the grounds that it is the repeal of an existing alleviation of taxation and an extension of a tax to persons who are not already taxpayers--in other words, a new class of taxpayer.

If that were the case, then he would be correct to suggest that the bill be discharged. However, my colleague has read more into my bill than actually exists. He is mistaken because he fails to recognize the limited purpose and effect of the bill, which is to simply require more complete and public disclosure of a union's finances on a regular basis.

First, his assertion that the bill “repeals the existing alleviation of tax” is incorrect. The bill does not remove any tax deduction. Bill C-317 maintains the status quo and does not grant the Canada Revenue Agency any powers, including any taxation powers, that it does not already have. The CRA is already empowered to compel financial disclosure. It can do so as a result of its mandate to ensure that organizations with tax exempt status do not engage in activities that would no longer justify that status. This power, the power it already has, is a simple function of its mandate to ensure compliance with the Income Tax Act. It is a mandate that the CRA exercises in respect of all classes of taxpayers who must comply with the act.

It is true that the bill would change things. The failure to comply with the additional disclosure proposed by the bill could also result in a union losing its tax exempt status. However, this loss of tax exempt status would result from the already existing enforcement provisions of the Income Tax Act and not from any provision contained in Bill C-317.

In other words, if a union violates the current requirement to disclose, the CRA can remove its tax exempt status. That is true whether my bill passes or not. All my bill would do is increase the quantity and public nature of that disclosure with the same enforcement authority that the CRA already has.

My colleague also raised the issue of my bill creating a “new class of taxpayer”. According to the Income Tax Act, the term “taxpayer” is defined to include “any person whether or not liable to pay tax”. Even if an individual earns no income, he or she is still a taxpayer. However, the class contemplated in the member's unlikely example of a labour organization that chose to violate the Income Tax Act already exists. This existing class is the class of taxpayers who pay union dues. He is trying to pretend that the class is those who are in one tax bracket or another and who may change their tax bracket and tax payable as a result of a union losing its tax exempt status.

In the context of the loss of dues deductability, differentiating on the basis of income tax brackets is irrelevant to identifying a class of taxpayer. In fact, those who are affected by the loss of the union's tax exempt status have only one thing in common: they are a single class of taxpayers under the Income Tax Act who pay union dues.

The legislation only has the potential to affect this already existing class of taxpayers. Their tax bracket does not matter. The point is their loss of dues deductibility. That is their class and it is an already existing class. Whether they pay more or less tax as a result of rulings by the CRA is a function of the CRA's normal day-to-day operations, not the result of this bill. In other words, this class of taxpayers is already subject to fluctuations in the level of taxation to which it may be subject under the current legislation and CRA 's interpretations and administration of the act.

I have one more point to make in response to my colleague's point of order. He claimed that the ruling in Bill C-470 from the 40th Parliament should be distinguished from this case because union members would be obligated to pay dues while charitable donations are discretionary. Even if it is accepted that the bill may have the effect claimed by my colleague, and I do not concede that it would, it must be pointed out that union members whose union has lost its tax exempt status for refusing to disclose have the right to exercise certain options. Those options include the option to be represented by another union, a union that has maintained its tax exempt status. This would serve to ensure that member dues continue to be eligible for a tax deduction. Therefore, the ruling in Bill C-470 is a relevant precedent to be relied upon on this particular point.

Those points conclude my response to the point of order raised by the member for Windsor—Tecumseh.