Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue 35 - Evidence - May 29, 2013
OTTAWA, Wednesday, May 29, 2013
The Standing Senate Committee on Banking, Trade and Commerce, to which
was referred Bill C-377, An Act to amend the Income Tax Act (requirements
for labour organizations), met this day, at 4:20 p.m., to give consideration
to the bill.
Senator Irving Gerstein (Chair) in the chair.
The Chair: Good afternoon. I call this meeting of the Standing
Senate Committee on Banking, Trade and Commerce to order. Today we continue
our consideration of Bill C-377, An Act to amend the Income Tax Act
(requirements for labour organizations).
To date, we have heard from the bill's sponsor, Mr. Russ Hiebert, MP,
representatives from the legal profession in Canada, several academics and
some other interested parties.
In our first hour, we will hear from the Privacy Commissioner of Canada,
Ms. Jennifer Stoddart. Accompanying her is Ms. Patricia Kosseim, Senior
General Counsel and Director General, Legal Services, Policy and Research
Ms. Stoddart, the floor is yours.
Jennifer Stoddart, Privacy Commissioner of Canada, Office of the
Privacy Commissioner of Canada: Thank you, honourable chair and
honourable senators, for inviting me to speak with you regarding Bill C-377,
An Act to amend the Income Tax Act (requirements for labour organizations).
As the chair said, I am fortunate to be accompanied by our senior general
counsel, who will be able to answer your more technical legal questions.
I will say from the outset that I believe transparency and accountability
are essential features of good governance and critical elements of an
effective and robust democracy.
However, as the Privacy Commissioner of Canada, I should underscore that
transparency and accountability needs to be appropriately balanced with the
protection of individuals' privacy. Put differently, any public disclosure
of personal information as contemplated in Bill C-377 needs to be carefully
assessed against a substantive need for disclosure.
As you know, I appeared last November before the House of Commons
Standing Committee on Finance to present my views on Bill C-377 as it then
At that time, I expressed concern over the level of public disclosure of
personal information contemplated in the bill. Specifically, I was troubled
by the idea that the names and salaries of all union employees would need to
be publicly disclosed, without the individuals' consent, to achieve
I submitted that limiting the scope of disclosure would result in a more
balanced yet equally effective result, and suggested that disclosure be
limited to the highest compensated officials or to the number — not the
names — of union employees within specified salary ranges.
I also suggested that disclosing aggregated financial statements could be
seen as a valid alternative to achieve public accountability and
transparency objectives. In this respect, I was encouraged to see that the
House of Commons adopted some privacy protective amendments at report stage.
My understanding is that they result in the following changes: the
obligation to disclose no longer applies to the activities and operations of
pension, health care and insurance plans; the address of individuals for
whom disclosure applies will no longer be reported; disclosure of
compensation disbursements and names will now be limited to officers,
directors and trustees with compensation over $100,000, and to other senior
union officials; disclosure of disbursements made to other employees and
contractors will be made in aggregate form; and disclosure of disbursements
related to labour relations activities, organizing activities and collective
bargaining activities will also be reported in aggregate form.
These are improvements over the previous disclosure regime as far as
privacy protection is concerned.
However, honourable senators, some privacy considerations do remain. In
principle, under section 241 of the Income Tax Act, information about
individuals is confidential, unless a specific exception to this prohibition
to disclose is set out. I am aware that if Bill C-377 were adopted, it would
specifically allow for an exception to the confidentiality rule. While from
a legal perspective this would be permissible under the Privacy Act, I am
concerned with the creation of yet another exception.
Specifically, the names of individuals will still have to be disclosed
for certain disbursements that have a cumulative value above $5,000, such as
loans, political activities, lobbying activities, contributions, gift,
grants, conference activities, education and training activities. These
disclosures clearly involve personal information and, in many cases,
sensitive personal information. Again, one possible way to reduce privacy
intrusion while still achieving accountability objectives would be to limit
the scope of disclosure to aggregate numbers or to withhold the names of
In conclusion, I hope that my comments have been useful in assisting
parliamentarians to strike the appropriate balance between transparency and
accountability on one hand and the privacy rights of individuals on the
other. Therefore, at this point, I conclude my prepared remarks and my
general counsel and I would be happy to attempt to answer your questions.
The Chair: Thank you, Ms. Stoddart.
Senator Hervieux-Payette: I would like you to discuss your
concerns in greater detail. For instance, as I understand it, under the
current regime, the top five salaries paid in an incorporated organization
must be disclosed to shareholders. Perhaps you could clarify that for me.
Certain salary disclosure rules apply to companies. I am trying to draw a
parallel between unions and companies because their people do work together.
If the names of five union leaders and five management leaders are
disclosed, is that enough?
When a company's prospectus goes out, it usually lists a certain number
of shareholders whose salaries are known. The bill seems to be targeting a
larger number of individuals. In my view, if the legislation is to be
balanced, we have to make sure that the parties concerned have about the
same number of representatives. Are you familiar with the hard and fast rule
Patricia Kosseim, Senior General Counsel and Director General, Legal
Services, Policy and Research Branch, Office of the Privacy Commissioner of
Canada: On the corporate side, I am not familiar with the specific rule
or the legislation that applies. The bulk of the legislation we examined
pertained to the disclosure of the salaries of high-ranking public servants;
we did not compare unions and corporations in that regard.
Senator Hervieux-Payette: Where do high-ranking public servants
stand, if we draw a comparison?
Ms. Kosseim: For the most part, the legislation provides for
disclosure based on the size of the salary, not the number of individuals.
Senator Hervieux-Payette: Very well.
Ms. Kosseim: In terms of the number, unfortunately, I am not
familiar with the rule that applies to the corporate realm. If you like,
however, we can get back to you on that.
Senator Hervieux-Payette: If the idea is to adopt a balanced
approach, it seems to me that a comparison would be appropriate given that,
generally speaking, unions are within companies. I know disclosure is not
based on salary size for companies, because that would make things
complicated in certain cases. This week, it was disclosed that some CEOs
were making $40 million a year. Is the $100,000 a base amount that you
proposed to the House of Commons? Is that comparable with our public
Ms. Stoddart: No, we did not propose it, but I believe — and this
is without having checked first — that the figure was used elsewhere. I
think it was the amount applied in Ontario's legislation, and I am not sure,
but it may have been used in Australia's as well, or at least the equivalent
of $100,000 Australian. I think that is how the limit came about.
Senator Hervieux-Payette: Is it $100,000 for senior public
servants across Canada? I thought it was higher than that.
Ms. Kosseim: In most of the provinces with the requirement, it
varies between $50,000 and $100,000, according to our research.
Senator Hervieux-Payette: When you talk about reporting an
aggregate amount per category, a question comes to mind. Will the union
submit a total amount for a specific category, without indicating any names?
How would categorizing the data by group work?
Ms. Stoddart: From reading the bill, I do not think that, for a
specific disbursement in a certain category, over $5,000, for example, the
name of the individual would be reported. Instead, I think the idea is that
the total of all the disbursements made for training activities, say, over
the set amount would be disclosed; so if you have 6 people who each engaged
in more than $5,000 worth of training activities, the disclosure would be
for $30,000 divided among 6 people.
Senator Hervieux-Payette: I see. The number of people and the
total amount would be reported.
Ms. Stoddart: That is correct. You would be able to infer the
average amount spent per person, but you would not know their names.
Senator Hervieux-Payette: Only the names of highly paid leaders
would be available.
Ms. Stoddart: Precisely.
Senator Nancy Ruth: Thank you for being here. First, because I do
not understand it, you know we have heard that there could be between 1,000
and 25,000 entities that come under this legislation. Do you have any idea
why there is such a great disparity in the numbers?
Ms. Stoddart: No, I do not. I am not an expert on this particular
Senator Nancy Ruth: My next questions have to do with how you work
with the CRA on privacy-related issues. For instance, if a labour
organization now, before the legislation is passed, chose to file, given
most of what is in the bill and given your concerns around privacy for
individual names and so on, how would your office try to work to prevent
such disclosure or some aspects of it?
As a second case, if the minister had no discretion at all and was
required to post all of the information and you felt some of it violated
privacy issues, how would you deal with it all?
That is the kind of thing I am looking for. How do you work with CRA?
Ms. Stoddart: Thank you. We have an ongoing relationship with CRA.
Generally, my office tries to tailor its activities to correspond to areas
in government. The public sector is where most of the implications for
safeguarding the personal information of Canadians lie. In that context, we
are currently doing an audit of the Canada Revenue Agency; it will be
published in the fall. In that we will have some observations about how
Canada Revenue Agency currently manages personal information.
In regard to the latter part of your question, in the event that this
draft legislation does become law, we would reasonably foresee that there
would be complaints to our office about this. However, as I explained in my
opening statement, if Parliament in its wisdom passes this law, then the
Canada Revenue Agency has to comply with this law, and it is not against the
Privacy Act, per se. In a complaint, we would then be looking for whether
the Canada Revenue Agency applied the dispositions of the new law in
respecting, as much as possible, the Privacy Act; that is, that it did not
go over what was asked by any new law.
Senator Nancy Ruth: Even if you were opposed to some of the
Ms. Stoddart: I am giving you my opinion now. Once it becomes law,
my job is to apply the law as Parliament has voted it.
Senator Ringuette: Thank you. We certainly appreciate the task
that you have with regard to the Privacy Act. I do not know if you have
followed the discussion in the Senate in regard to this bill.
Ms. Stoddart: Partially, yes.
Senator Ringuette: Senator Cowan certainly made quite a good legal
argument in regard to the fact that the amendments proposed at the last
minute in the House of Commons had a purpose but that the wording was not
providing what the intention was. The legal understanding and the amendment,
per se, actually did nothing to change the privacy requirements of the bill.
I wonder if you read Senator Cowan's speech and his legal logic with
regard to the amendments. I am not a lawyer, but the more I read it, the
more I tend to agree with his logic that, at the end of the day, it did not
change the bill.
My first question is: Have you read Senator Cowan's argument on the bill?
Ms. Stoddart: Yes, I am aware of his arguments.
Senator Ringuette: Do you agree that the amendment you were hoping
for did not do what you were hoping it would do?
Ms. Stoddart: With great respect to the opinion of the honourable
senator, I would not go in the direction that it does not have any effect.
It seems to me, on a reading, that it has an effect of exempting some
personal information that was in a previous draft of the law.
My office comes to the conclusion that perhaps some wording changes would
clarify it. It is not a question of "no effect;" it is just a question of
clarity of intent. With that, if you would permit, honourable senator, I
will let our general counsel explain our position in greater detail.
Ms. Kosseim: As the commissioner explained, if we got a complaint
about the application of this act, under the Privacy Act, disclosure would
be permissible in accordance with the law. Therefore, necessarily we would
then have to interpret these new provisions to determine whether disclosure
was in accordance with the law. We, too, would be users, interpreters and
appliers of this legislation.
With that perspective, we did examine and study the new provisions, and
we have come to the conclusion that there are ambiguities in understanding
the legislative intent to disclose certain categories of information in
aggregate form. The preamble of subsection 149.01(3)(b) still
requires a specific listing or specific enumeration of separate entries,
along with the names of the payors and the payees, and it includes all of
the provisions that follow. Some of those provisions are qualified by the
term "aggregate;" some are not.
However, it is only when you get to paragraph 7(c) at the end
that, really "for clarity" it says for those categories enumerated here,
the names of the payor and the payee do not have to be disclosed.
I think that is where some of the provisions that the legislator intends
is to report only in aggregate form, unfortunately, are not excluded in
paragraph 7(c). Therefore, there is an ambiguity, on the one hand, by
an instruction to disclose the names of the payor and payee, and on the
other hand there is an exclusion not to do so with respect to some
categories but not the others, where we understand the intent was to only
disclose in aggregate form.
For greater clarity, it would be necessary to include all those
provisions that the legislator intended to report only in aggregate form, to
ensure they find themselves in paragraph 7(3)(c) so that we,
ministers, officers at CRA and others who need to apply this law in practice
could do so with greater ease.
Senator Ringuette: I have read the Income Tax Act with regard to
the privacy requirements. The only section that says that the CRA officials
are allowed to give information of a personal nature is when it comes to
warrants and so forth. That is understandable if there is an investigation
and so forth.
I see that there are two disclosure requirements in the bill. The first
disclosure is from the person who receives $5,000 and more in benefit in one
year and the labour organization has to provide that information to CRA. The
labour organization would have to get the written consent to disclose this
first part of the information to CRA, because the Canada Revenue Agency Act
says that you need written consent from the person.
The second part is that the minister responsible for CRA will put this
information on the public website. Therefore, the minister will also have to
seek the written consent of all these people before he can put the
information on the public website, if you want to be compliant with the
Privacy Act and the Income Tax Act. How can this be feasible?
Ms. Stoddart: I am sure that officials from the Canada Revenue
Agency can tell you more about how they —
Senator Ringuette: They did not know last week how they were going
to do this.
Ms. Stoddart: The Privacy Act, as I have said, makes exceptions
for what is mandated by law; and that has been in the act all the time. The
ultimate test is not within the Privacy Act at some point if there is a
constitutional challenge and some legislation is struck down. The Privacy
Act does not do that. We work within the limits set by the legislator.
Your question about putting names on the Internet leads me to make the
remark that I am concerned about the publishing of names in a searchable
format. Over the years, I have tried to alert administrative tribunals
governed by the Privacy Act about the unintended consequences of having
someone's name published in a searchable format on the Internet, sometimes
for things very innocent like asking that your disability pension be
increased because there has been a worsening of your situation. These were
not things that came from my imagination; this was because people came to us
with their complaints. One person said, "I went to a federal government
tribunal, and I got a decision. Lo and behold, my neighbour knew all about
it and read the decision." That is above and beyond the requirement for the
public rendering of justice so many of those tribunals have now changed
their procedures with something called a Robots Exclusion Protocol, which
means you can read them but you cannot search them.
In this case, I raised the question of people who have done nothing
wrong. If they have been in receipt of more than $5,000 or are public
contractors to the extent of more than $5,000, why is it necessary that
their names be searchable? I go back to the anonymity or aggregation of it.
On the second part of your question, I believe general counsel could give
a better reply.
Ms. Kosseim: You asked about two disclosures.
Senator Ringuette: I read in the bill that there are two steps of
Ms. Kosseim: For the first disclosure from the union to the CRA,
you would have to turn to the legislation governing the unions. Federally
neither the Privacy Act nor PIPEDA apply to union core activities. They are
not commercial activities under our private sector legislation, and they are
not governed or included in Schedule 1 of the Privacy Act. Their disclosure
to the CRA would be in accordance with the requirement to do so under the
Income Tax Act; but there is no legislative requirement for them to obtain
the written consent of individuals. In provinces where there is legislation
governing them, they would have the same general provision that is in the
Privacy Act that would allow them to do so in accordance with the
legislative requirement; and again, they would be exempted from obtaining
As for the second disclosure from the minister to the public on the
Internet, section 241 of the Income Tax Act is the general prohibition for
any government entity to release taxpayer information. The provisions of
Bill C-377 exempt this disclosure on the part of the minister to the public
website from the provision of section 241; so the minister would be exempted
from the general confidentiality requirement under the Income Tax Act and
could do so without consent under the Privacy Act. To the extent that the
disclosure was in accordance with the law and did not divulge more than was
necessary beyond the requirements of the law, then under the Privacy Act
there would be no consent obligation or there would be an exemption from
consent because the legislation so provided.
As the commissioner said, once the law is the law, we would apply the
law, and it is in your wisdom today to determine how you want to craft it in
accordance with the balance you seek.
Senator Greene: In this day and age, the balance to privacy is
transparency. In your deliberations when you look at acts like this in other
situations, you are charged with the issue of privacy and making opinions in
respect of that. In coming to your conclusions, do you balance or are you
required by law to balance all of the privacy issues with all of the
emerging transparency issues?
Ms. Stoddart: That is a very interesting question. In deliberating
on either of the acts that we are called upon to administer, we make our
decision within the confines of those two acts. However, when we are called
upon to give our opinion on issues that are emerging and whether they are a
possible infringement on privacy, usually they are initiatives going into
either a greater transparency or an increasingly fraught context of national
security over the last 10 years. They may be a new infringement on
traditional privacy protection, so we talk about the balancing of privacy
with other important social goals like national security, public safety and
Senator Greene: Does the act not require you to balance
Ms. Stoddart: No, it does not. Government transparency is separate
under the Access to Information Act.
Senator Greene: I would like to have a clear understanding of your
position on the bill. My understanding is that there is nothing in the bill
that violates the Privacy Act, but you have some worries and concerns. Is
Ms. Stoddart: That is right.
Senator Greene: Can you explain in a nutshell what those two or
three worries or concerns are?
Ms. Stoddart: My residual worries are about those occasions under
this bill where names would still be given in the case of certain payments
over $5,000, of the payer and the payee. My submission to you is that you
could provide these anonymously or have them reported in aggregate form —
simply the total amount of money given and the number of people concerned.
Senator Greene: Right. That is the main concern, okay.
Ms. Stoddart: Yes.
Senator Black: Senator Greene has asked my exact question. I
presume that you would have the exact same answer.
Ms. Stoddart: I hope I would.
Senator Black: I know you would.
The Chair: I will take a third stab it. You are raising a very
Ms. Stoddart, my recollection is that the last time you were before the
Standing Senate Committee on Banking, Trade and Commerce was last year when
the committee was studying the Proceeds of Crime (Money Laundering) and
Terrorist Financing Act.
Ms. Stoddart: Yes.
The Chair: The issue at that time very much was national security
versus privacy. This time you have enunciated it as transparency versus
Subsequent to the time that you were here, we as a committee went to
Washington and visited with a number of entities there. I think one of the
things we all took away was that you could not understand how this balance
has changed in the United States as a result of 9/11. I am now relating to
national security versus privacy.
My question to you is picking up on Senator Greene's point. Does your
interpretation of the balance change as a result of how society looks at
something? Does it change at all, or does it always stay the same, in your
Ms. Stoddart: Honourable senator, I give my opinion in my public
education work, in presentations that I may make, but I am not a tribunal so
I do not, strictly speaking, interpret the law the way a tribunal might.
However, in the time I have been Privacy Commissioner, I try to make
realistic interpretations of what privacy is, given the context, given
Canadian values, given the challenges that are before Canadian society and
so on. More recently, more often, I have done this in in the context of
private sector legislation, where we deal with new phenomena like the rise
of social media data aggregators, more recently big data and so on.
As you say, in the public sector we have the very persistent national
security and international finance transaction issues. They come into the
general view of the world I see, but I do not pretend that this has a huge
effect on the laws I administer because I am bound by those laws and
ultimately they are interpreted by the Federal Court.
The Chair: Let us assume you have had the position for five years.
On day one, the issue of transparency is this, and five years later there
has been this move to greater transparency to the public. Would you say that
your interpretation is the same in the fifth year as it might be in the
first and that that does not come into your deliberation?
Ms. Stoddart: I do not think that has come up. It does not come up
in quite as logical and objective a position as you have suggested.
I take note of how the world is evolving. I take note as Privacy
Commissioner of how the importance of the value of transparency in a
democratic society has changed hugely since 1983 when the particular law,
the Privacy Act, was first drafted. In my remarks to you today, I take note
of that. I say I understand that transparency is an important democratic
right, not only in Canada. Sorry, it is an expectation in a democracy. I do
not know if it is got to the point where we can call it a right, but
certainly it is an expectation. It is a hugely important international
movement and so on. That was not there in 1983. To that extent, my remarks
to you today are informed by my understanding that transparency is a global
movement. We see it at the OECD. We see it internationally, again dealing
with financing, dealing with international criminal matters and so on.
When I go to interpret various cases or perhaps give my opinion on
various cases as an ombudsman in administering the Privacy Act, I and the
staff who work for me are bound by that 1985 wording of the Privacy Act.
The Chair: Thank you. That concludes round one. I will move to
Senator Hervieux-Payette: I want to pick up on the notion of
balance between the employers and the unions, given that both entities must
see to it that companies' mandates are fulfilled. And considering all the
pieces of information that have to be disclosed, including legal fees, I
wonder whether it would not be possible to treat both entities in somewhat
of a parallel fashion. In other words, unions would be required to make the
same disclosures that companies do.
Hence the importance, when you research your answer, Ms. Kosseim, of
looking at the information that can be disclosed, that does not violate your
legislation and that applies to the administration of businesses. It is
important to establish parallel treatment requiring businesses to make the
same disclosures that unions do. That would balance the scales.
Grants have to be disclosed, but companies also receive grants. Lobbying
disbursements have to be disclosed, but companies also engage in lobbying
activities. Costs associated with negotiating have to be disclosed, but
employers certainly hire counsel when entering into negotiations. The same
goes for conferences and education activities.
Two components are at play. There are public companies whose shareholders
and the public are aware of the financial statements; they are more and more
detailed. Shortly, we will be hearing from accountants. They will be able to
tell us exactly what is required, because the information that appears in a
public financial statement does not actually reflect senior management's
goodwill, but simply a company's obligation to report to its shareholders.
Private companies have shareholders as well. But they cannot find the
company's financial statements on its website, unless the company has
decided to make them available online. Some private companies earn millions
of dollars, but we are not privy to their expenditures, even though they
have unions as well. In those cases, senior management does not make any
disclosures; it does not disclose any information on all the activities that
unions are required to report on. And we are still talking about the Canada
Revenue Agency here. Companies, to my knowledge, enjoy all kinds of tax
benefits and loans. We often see senior company executives who have loans.
It is important to figure out how we can apply a consistent approach to
businesses and unions, so they are both subject to the same obligations. I
would have no objection to that. I do have an objection to this legislation,
however, because it provides no balance whatsoever between the two. Both
parts make up the organization, and both are there to serve the best
interests of the company. Senior management is not necessarily the founding
I would like to know which parts of the bill you would consider to be
fair in relation to how companies are treated, meaning, the pieces of
information you think could be disclosed. That way, if we propose
amendments, we could simply recommend that the treatment be parallel to that
of a private company.
Would that principle be covered under your legislation?
Ms. Kosseim: I fully understand the nature and significance of
your question. If we look at it from a privacy perspective, we are not the
ones who would necessarily encourage the disclosure of more personal
information, by either side. We are here to comment on the bill before us
and to set limits or suggest limits, rather, as far as the content goes.
There may be other witnesses who are more suited than we are to discuss
that important and fundamental issue of balance; we are not necessarily the
best people to comment on that.
Senator Hervieux-Payette: Because you have to examine the Canada
Corporations Act to determine whether it, too, contains privacy violations.
Ms. Stoddart: With all due respect, senator, no. Of our two pieces
of legislation, the more relevant, as far as this bill is concerned, is the
one pertaining to the protection of personal information in the federal
sector. Only the Canadian government and public organizations listed in the
act are affected. We do not ever really have occasion to look at the various
pieces of federal or provincial legislation on corporations.
Therefore, we do not have the expertise to give you a meaningful answer
to the entirely valid question you asked. Our focus is solely on the
interface between this piece of legislation we administer and the Income Tax
Senator Ringuette: It is funny that we are hearing the words
"right to transparency," and that right to transparency in regard to
labour organizations is already recognized in the provincial labour
relations acts, and it is also recognized in the federal Labour Code. All
this transparency in regard to union organizations and their membership is
already a requirement and has been a requirement for quite a number of
years, not only federally but provincially, responsible for over 90 per cent
of labour organizations in this country.
I want to thank Senator Gerstein for bringing up the issue of privacy and
security. Last week, the Canadian Police Association told us that not only
were they concerned about their privacy because of the disclosure
requirements of this bill, but they were also very concerned about their
security. There you have an issue of privacy and security. You are nodding
your head, so I guess you have listened to their comments.
Ms. Stoddart: Yes.
Senator Ringuette: That is an additional concern, certainly for
me. We are constantly hearing about systems being hacked, and actually some
of the current federal departments have been hacked. What can you say to us
that would appease my fear for the privacy and the security of these police
Ms. Stoddart: Honourable senator, I am nodding because I did read
that part of the transcription of that part of the witness's testimony.
Therefore, I would repeat to you how important I think it is, except for the
few exceptions, the high earners, that the names be anonymized. It is
difficult to find an overriding public interest to expose everyone who is
around a $5,000 transaction to a searchable web protocol, particularly if
you had to apply the case of people who are working undercover or in
dangerous occupations and so on. I urge you to make the changes that were
made after the deliberations in the House of Commons and make with very few
exceptions the reporting on this anonymous and to limit the searchability to
reading on the Revenue Canada website the names of the people who must be
named under this legislation.
Senator Ringuette: I see you as the guardian of the private life
of Canadian citizens in regard to federal legislation. With the discussions
we have just had, the Senate has a minority group and a majority group. I am
not certain that it is possible to have the amendments you are requesting,
unless I have some nods on the other side. This bill does not meet your
smell test in regard to privacy.
The Chair: Is that a question?
Senator Ringuette: Yes.
Ms. Stoddart: And the question is?
Senator Ringuette: The question is, if no amendments in regard to
your concern can be put forth in the Senate or accepted in the Senate, does
this bill meet your smell test in regard to your responsibility for privacy
Ms. Stoddart: In terms of proportionality, I think that naming
that category of individuals that would still be named under this current
legislative draft is a significant invasion of their privacy. By not
restricting web searches in some way, given the power of web searches these
days and the ultimate replicability of information on the web, since the web
never forgets and people have the right to be forgotten and other issues
like that, I think I would have problems with the bill. I would have
problems with it.
The Chair: That concludes our questions. On behalf of all of the
members of the Senate Banking Committee, I would like to express our
appreciation for your appearance today.
We are now pleased to welcome Carole Presseault, Vice President,
Government and Regulatory Affairs, Certified General Accountants Association
of Canada; Terrance Oakey, President of Merit Canada; Robert Blakely,
Director of Canadian Affairs, Building and Construction Trades Department,
AFL-CIO, Canadian Office; and joining us by video conference is Maureen
Parker, Executive Director of the Writers Guild of Canada.
We will start with opening comments from each of our panelists today,
starting with Ms. Pressault, please.
Carole Presseault, Vice President, Government and Regulatory Affairs,
Certified General Accountants Association of Canada (CGA-Canada):
Honourable senators, thank you for the opportunity to provide input into
your study of Bill C-377.
While the bill is a mere six pages in length with three clauses, our
position is that the provisions of this bill are far- reaching, likely
unnecessary, and not at all about the Income Tax Act.
The bill proposes, through the Income Tax Act, to require labour
organizations to submit an annual return that would disclose extensive
internal financial information. This type of detailed information is not
required from any other civil society organization or corporation in the
country despite the numerous tax measures from which those organizations
Some have called the legislation "anti-union," an infringement on
provincial jurisdiction, an abridgement of charter rights and a breach of
privacy. Those arguments are outside the scope of our expertise.
As an organization that has been a strong advocate for simplification of
the tax system, CGA-Canada would be remiss in not speaking out about using
the Income Tax Act for purposes other than its intent.
Let us be clear: Bill C-377 is not a tax bill. Using the Income Tax Act
in this manner, we believe, is inappropriate. The ITA is not an instrument
to regulate the behaviour of unions, and it is not an instrument to regulate
transparency of organizations. Simply stated, the purpose of the 3,000 page
ITA is to define who is liable for taxes and under what conditions. Its
purpose is to raise revenue for government. In fact, if anything, the act
would benefit from simplification and streamlining.
Some may argue that providing more financial information will bring about
increased transparency, promote good governance and improve accountability,
yet unions disclose financial information of these matters to those who
oversee their activities: their members.
It is argued that Bill C-377 is necessary because union members benefit
from a tax deduction, yet this measure is not unlike the tax deduction
accessed by many other Canadians, including our own members, with respect to
professional dues. The policy intent of this deduction is to recognize that
there are certain costs associated with the maintenance of professional
status that are often employment requirements. In fact, in many cases, these
dues are paid by employers directly and, therefore, professionals cannot
avail themselves of the tax benefit. I would hope that it is not
Parliament's intent to bring about similar legislation for other
organizations, including our own.
Four years ago, this very committee was seized with some very important
legislation, the Canada Not-for-profit Corporations Act. I appeared twice as
a witness during your study of that legislation. It was decades in the
making and introduced a modern governance regime for those organizations
that fall under it. These organizations include unions. The regime proposed
in the new Canada Not-for-profit Corporations Act emphasized members' rights
over government rights.
So those organizations are required to submit annual audited financial
information to their members. Members choose the auditors. Members approve
the financial statements and members participate in the governance of
activities of those organizations.
I submit the disclosure requirements in Bill C-377 are unnecessary,
duplicative and, moreover, will create red tape for government. Already, the
cost of tax administration is in the billions of dollars at a time when the
focus should be on securing the tax base, collecting owed taxes and stopping
Bill C-377 will not improve the governance of unions. Governance of
unions, like for many other organizations, lies where it belongs — with
Thank you for your time. I would be pleased to answer any questions the
committee may have.
The Chair: Thank you. Mr. Oakey, please proceed.
Terrance Oakey, President, Merit Canada: Good afternoon. Thank you
for the opportunity to appear before this committee today.
Just a little bit about our organization, Merit Canada is the national
voice of Canada's eight provincial open shop construction associations. It
is on behalf of those 60,000 workers in this sector and our 3,500 member
companies that employ them that we are here to speak strongly in favour of
Given some of the misinformation that has been spread by labour leaders,
let me begin by stating clearly what this legislation does not do. This
legislation does not touch the union financing model, which will continue to
rely on forced contributions of unionized workers, including those who
choose not to join the union in their workplace. These tax deductible
contributions are worth around $4 billion annually and represent a de facto
taxing power over unionized Canadians. This, of course, will not change if
this bill is passed.
Furthermore, Bill C-377 does not dictate how labour organizations get to
spend the billions they collect annually. Any political or social movements
funded by labour organizations today can still be financed after the bill is
passed. What and how they spend on grievances and bargaining and other
collective bargaining activities is also untouched.
Finally, this bill does not touch the tax benefits that unions enjoy,
including $400 million worth of tax expenditures. In addition, labour
organizations will continue to enjoy their tax-free status. Therefore, one
can hardly claim that this legislation in any way regulates union behaviour.
These reporting requirements are not onerous and will be easy to
implement for any organization with even the most basic bookkeeping
practices. It seems like a fair trade for organizations that have taxing
power that brings in around $4 billion annually. This right to tax comes
with basic transparency requirements.
There are other points that you will not hear, of course, from labour
leaders because these facts also support passage of the bill. First, it is
important to note that amendments were made in the House of Commons to
address the concerns put forth by experts regarding the privacy of benefits
and pension payouts as well as solicitor-client privilege information. These
amendments have made Bill C-377 a better bill. I also point out that Bill
C-377 will bring Canada's laws in line with those of other industrialized
Unionized Canadians actually support this legislation. A 2011 poll by
Nanos Research found that 86 per cent of unionized Canadians support greater
union transparency. A figure for the general population came in at 83 per
cent. Yet, union leaders still oppose this bill, despite the amendments,
despite the minimal bookkeeping requirements, despite the public and union
member support, and despite the existence of similar laws in other
I will leave honourable senators to ask, why. In doing so, consider that
between 2001 and 2008, the U.S. Office of Labor-Management Standards, which
is responsible for enforcing similar union disclosure laws south of the
border, credited that legislation with over 900 criminal convictions for
inappropriate and fraudulent activity. It is also surprising, and I assume
my friend from the building trades will strongly disagree with this proposed
legislation, that his organization, the AFL-CIO, actually supported similar
legislation when it was introduced in the United States.
Then AFL-CIO President George Meany stated:
All of these [transparency] bills are based on. . .the goldfish bowl
theory, the concept that reporting and public disclosure of union
finances. . .will either eliminate or tend to discourage the abuses. . .
. The AFL-CIO firmly believes this theory to be sound.
Merit Canada also believes that workers and taxpayers are better served
by a system that is open and transparent.
I would like to address the issue of constitutionality since it has been
spoken about a lot in this committee. Claiming that a bill is
unconstitutional is an age-old tactic when opposing a piece of proposed
legislation, so it is no surprise that it is happening to this bill.
However, I would point out to senators that groups like the Canadian Bar
Association have a long history of claiming that bills are unconstitutional,
such as Bill C-10, the Safe Streets and Communities Act; Bill C-31, the
Protecting Canada's Immigration System Act; Bill C-7, the proposed Senate
Reform Act. The CBA has also questioned the constitutionality of mandatory
minimum sentences and Canada's lobbying laws. In fact, Mr. Bruce Ryder of
Osgoode Hall, who appeared before you last week, wrote in a 2008 column in
the National Post that it is unconstitutional for the Prime Minister
to appoint senators during a period of prorogation. Therefore, Mr. Chair, I
am disappointed to report to you that neither you nor Senator Greene would
be here today if Professor Ryder's constitutional advice were heeded.
Furthermore, the subcommittee on private member's bills, whose membership
includes the noted constitutional scholar the Honourable Stéphane Dion,
received expert counsel by the House of Commons lawyers and did not find the
bill to be unconstitutional, despite the fact that NDP members of Parliament
made the exact same arguments that Professor Ryder made at this committee
last week. Therefore, Bill C-377 was deemed constitutional until someone
proves otherwise in a court of law with a specific set of facts, not by a
law professor pontificating on another one of his constitutional theories.
We believe this bill will withstand a constitutional challenge and that this
debate is a lobbying tactic to distract from the real issue of union
In closing, I would encourage senators to pass this bill. The facts
support Bill C-377, and the inflamed rhetoric and opposition to basic
transparency requirements demonstrate its necessity. Thank you. I look
forward to your questions.
The Chair: Thank you, Mr. Oakey.
Mr. Blakely, please proceed.
Robert Blakely, Director of Canadian Affairs, Building and
Construction Trades Department (AFL-CIO), Canadian Office: I have only
four minutes, so please read my brief.
Notwithstanding Mr. Oakey, unions are democratic, self-regulating
organizations. What we spend is authorized in advance by our members.
Spending can be viewed by them as a matter of law in most of the provinces
of Canada and federally. It is also a right at common law and a right
pursuant to their union constitution. Our members are volunteers, at least
in the building trades. People come to the union hall and join. There might
be a few people who are swept in an organizing campaign but they, too, have
the option to join and if they join, they are volunteers.
You may have noted some of Mr. Oakey's commercials earlier on that talked
about the whole business of what unions have to hide — sort of the
when-did-you-stop-beating-your-wife argument. The short answer is nothing.
Who is entitled to disclosure? Our members are entitled to know how we spend
every dime. Unions, as a matter of law, are a private club, somewhat
codified by the provincial labour act that regulates it.
Our members are entitled to disclosure; Mr. Oakey not so much. At the
House of Commons committee, Mr. John Mortimer, who also testified — and the
supporters of this bill generally are the Merit Canada contractors, such as
the Canadian Federation of Independent Business, the Canadian Taxpayers
Federation and Labour Watch, who are all interrelated and on each other's
boards — said he wanted the information so that he could dissuade people
from joining a union. Not a good use of government resources to give an
intelligence bonanza to Mr. Oakey and his friends.
Imagine for a minute that you are one of five newspapers in a city. Only
one newspaper must disclose its sources, its costs, where its payments and
receipts are, its employees and its activities; and it must to so publicly.
How thrilled would you be with that?
We have Merit Canada supporting the bill. Our members are not his
employees and likely never will be. Why is he so interested in them? It is
time, treasure and money. It is because he is our competition. He gets a
competitive advantage from our disclosure. Interestingly enough, Merit
Canada is organized like a union and paid for by an employer check-off.
Merit Canada members get a tax break: 100 cents on the dollar from income.
For every dime they pay, Merit Canada is a tax-free organization as a
not-for-profit. It pays no tax; so, if Mr. Oakey's logic is correct, Merit
Canada is here before you paid for by the people of Canada. They use the
money they collect for some of the same purposes as unions: political,
legislative and a number of other ways. Maybe Merit Canada needs to report
If you look at your own income tax return, line 212, based on section 149
of the Income Tax Act, allows a deduction in calculable income for union,
professional and similar dues. Only unions are caught in this reporting net.
There is the small business guide, through which thousands of small
businesses and other organizations are caught. Those organizations get 100
cents on the dollar for belonging to advocacy industry promotion and
employer groups. They get the same tax treatment. Treat us the same. If we
have to disclose, Merit Canada and those other member based advocacy
organizations ought to disclose. Employers ought to disclose.
We are opposed to the bill for privacy reasons. You have heard from the
Privacy Commissioner. You have heard from the Canadian Bar Association that
solicitor-client privilege is an issue. Unions are going to be put on a
Hobson's choice. Which law do we break: The Income Tax Act or the Privacy
Act federally or provincially? We should be entitled, like any other tax
entity, to some business confidentiality. The lady who answers the phone in
my office, who makes the princely sum of $42,000, should not have her name
on the Internet for Mr. Oakey's sport. The net is simply too wide.
I believe one honourable senator asked the question: How many entities
are there? I did a quick calculation for the building trades alone. It is
somewhere in the vicinity of 5,400 reports. Some local unions will have to
report 10, 12 or 14 times. How does that happen? We have the union, the
pension plan, the health and welfare plan, the building society, the retired
members organization, the charitable foundation, the supplementary benefit
fund, the unemployment fund, the health and safety fund, the education fund,
the apprenticeship training fund, the journeyman training fund, the industry
improvements fund, and all our labour management organizations. Every local
union has it. The accountant for Sheet Metal Workers Local 280 from British
Columbia told me they will have to file 17 separate reports.
According to the U.S. Bureau of Management, which researches these sorts
of things, it takes 550 staff hours to do one report in the United States,
and the reporting is virtually identical. When you do the gazintas, that is
Who is asking? It is not workers chafing in union chains saying, "Give
us transparency." We did a poll; Mr. Oakey did a poll. The difference is
that our poll was certified and went to 25,000 people; his poll went to the
management people in the Merit contractor world who seem to support his
Pick the poll you want —
The Chair: Can I ask you to wrap up, please?
Mr. Blakely: I am almost there, sir.
Who has the legislative competence? I remember pith and substance from
law school. Does it propose tax policy; does it provide for taxable
administration; does it provide for enforcement; or does it determine
taxability? It does not; it regulates the activity of a trade union. If this
were simply entitled the "union transparency and disclosure bill," we
would not be here.
Pension plans, and health and welfare plans —
The Chair: Is this your conclusion?
Mr. Blakely: I am right there, actually. With pension plans, and
health and welfare plans, there are still some issues. I would refer you to
the Canadian Bar Association, and I would also indicate to you that four of
the provinces have written to you saying they do not think this is a good
idea. Some of the provinces are coming to visit you. It is five, sorry — we
are going up — and I think New Brunswick is coming.
It might be appealing to kick the union around the block, but it is not
right to do so in these circumstances. I look forward to your questions.
The Chair: Thank you. We now go to Maureen Parker, Executive
Director, Writers Guild of Canada.
Maureen Parker, Executive Director, Writers Guild of Canada: Good
afternoon, senators. Thank you for the opportunity to appear here and
provide you with the Writers Guild of Canada's perspective on Bill C-377.
The WGC is the national association representing over 2,100 professional
screenwriters working in the English language film, television, radio and
digital media production in Canada. Our members are the creative
entrepreneurs behind the $3.2 billion Canadian film, TV and digital media
The primary occupation of the WGC is to negotiate, enforce and administer
collective agreements in its jurisdiction. The guild also pursues royalties,
foreign levies and resolves disputes on working conditions, fees and writing
credits. We undertake extensive policy projects and work closely with
government agencies, such as the CRTC, the Canadian Media Fund and Telefilm
Canada to ensure that Canadians are provided with Canadian content
The WGC is most concerned about the damage Bill C-377 could have on our
screenwriters and all labour organizations who seek fair dealing with
employers, large and small.
First, this bill will put even small labour organizations, such as
ourselves, and writers working under collective agreements at a competitive
disadvantage if each disbursement over $5,000 is made public. Most of what
we do is resolve disputes between producers and writers, expeditiously and
confidentially. This is the reason members and non- members pay dues.
Under this bill, producers will know which writers have been paid in a
dispute and may choose to blacklist those writers. Additionally, engagers
will not want the amounts they paid in any grievance made public.
Also, many our collective bargaining strategies will be known, as we
often hire outside legal counsel to assist us with negotiation preparation.
Our organizing activities will also become public. Outside consultants and
lawyers may not work with us if their fees become public, or engagers may
seek to restrict our access to them by offering them higher fees. We will
lose all strategic positioning in collective bargaining.
Equally important is our work with government agencies, in our ongoing
commitment to ensure that Canadians have high-quality Canadian content on
their screens. In particular, our work with the CRTC is at risk, as it
requires the expertise of regulatory lawyers and experienced accounting
We are up against very big broadcasters with very deep pockets, who
engage teams of lawyers to contradict our positions to the CRTC. To be
effective, we need to retain equally competent expertise. Quite often such
specialists will only work with us on a confidential basis, fearing
repercussions. Without a doubt, broadcasters will search any database to
find out who we have engaged and how much we are paying them in order to
thwart our efforts. This would result in a disservice to all Canadians.
As for the database, we will have to hire at least one more person to
track and enter this data, and to deal with questions from the CRA. This is
not a position we planned for. We need our staff to focus on our priorities.
Bill C-377 will force us to spend our very precious resources on things
we neither want to do nor need to do. Canadian taxpayers will also pay for
the creation and maintenance of this enormous database.
Finally, we question the very purpose of this private member's bill. We
do not agree that the public "must be empowered to gauge the effectiveness,
financial integrity and health of Canada's unions." The WGC is funded by
union dues and other fees required under our agreements. This is not public
money any more than any other tax deduction is. We receive no government
funding. Labour organizations are already governed and regulated by
provincial law, and are responsible to their own members.
Our organization is self-governed by a council of elected members from
across the country. Dues, rights and obligations are set out in our
constitution and bylaws. These documents and our collective agreements can
only be amended by member vote. Activity and budget are set out by our
council on behalf of the general membership. We are required to conduct
yearly audits of our operations and circulate them to our members. If
members are displeased with the way their money is being spent, they have
recourse through their elected representatives.
Please give this bill a sober second thought. It is seriously flawed and
serves no public good. We ask you to either withdraw it or defeat it.
Thank you for your time. I look forward to any questions.
The Chair: Thank you, Ms. Parker. We will move immediately to
questions, starting with our deputy chair.
Senator Hervieux-Payette: I want precision from the representative
of Merit Canada, Mr. Oakey. You talk about eight provincial construction
associations. Does that include Quebec?
Mr. Oakey: No, it does not. As you know, in Quebec, open-shop
construction is barred by the Labour Code; you have to be unionized to work
construction in Quebec.
Mr. Blakely: Not entirely, but generally.
Senator Hervieux-Payette: I must say that you probably heard about
the Charbonneau Commission and the number of irregularities by the
entrepreneurs and all the people in that sector, so I just want to tell you
that transparency or no transparency, I do not know what it would improve.
Would you agree that all the entrepreneurs that are related to your
organization would be bound to give the same information?
Mr. Oakey: If we meet the definition as Mr. Blakely and others
have publicly said, we would disclose and we would have no problem with
Senator Hervieux-Payette: All the criteria there? All the
information. It is a long list; it is clause 3(a), (b), (c)
and (i) and (ii) and so on. The bill is a few pages, but this
is half of the bill.
I want to ensure it is on the record: You agree that the organizations
that you are dealing with or representing would agree to give exactly the
Mr. Oakey: I think if we meet the definition, of course we would.
Senator Hervieux-Payette: What does it mean?
Mr. Oakey: The definition.
Senator Hervieux-Payette: No, I am talking about employers, not
meeting the definition of the bill. I am asking you what does it mean,
"meet the definition"?
Mr. Oakey: The definition as a labour organization. Many labour
leaders have looked at our structure and the structure of our members and
said that we may meet the definition —
Senator Hervieux-Payette: That is not my question. I am talking
about the entrepreneur as a corporation. Would they agree to provide the
same information that the unions are supposed to provide, according to the
Mr. Oakey: I do not speak on behalf of them. Our members have said
publicly, and I have as well, that if we meet the definition, we will
disclose and not fight it.
Mr. Blakely said this legislation is so that Merit members can go on a
fishing expedition, yet all of this information, if I really want to do
that, is available on the World Wide Web. It is already disclosed in the
United States because he has an affiliated union there. If there is any kind
of competitive advantage, it would have already been disclosed in the United
The Chair: We are not having a debate between you and Mr. Blakely.
Senator Hervieux-Payette has the floor.
Senator Hervieux-Payette: I wanted to make sure that you
understood I am not saying you must comply with the bill because you are
under the same definition. I am talking about your organization representing
corporations or companies. I mean, these are employers. Would the employer
that you are representing agree to provide exactly the same information to
the Canada Revenue Agency?
Mr. Oakey: Under this legislation, it is not required, but if we
as an association meet the definition, then we would.
Senator Hervieux-Payette: I do not want to say that he did not
answer my question. I was asking about entrepreneurs, the companies. I was
not talking about the association.
Senator Black: Thank you all for being here. I have a number of
questions, Mr. Chair, and when I have reached my limit, you can just yank
If we can start, Mr. Oakey, with you, there has been a great deal of
information brought before this committee around the issue of the
constitutionality of Bill C-377. I have heard your comments, and thank you
very much for them.
Are you prepared or are you able to table with this committee the legal
opinion that you have that tells us that it is constitutional?
Mr. Oakey: We have not sought a legal opinion to find out if the
bill is constitutional because we accept the ruling of the subcommittee on
private members' business that has four separate criteria, one of which is
that it is constitutional. We read the transcript of that proceeding.
Senator Black: That is fine.
Mr. Oakey: I just want to walk you through why. When it was looked
at, we noticed there was a very well-known constitutional scholar on the
committee. They actually had a recorded vote, because the NDP required that,
and it passed that test.
Senator Black: Notwithstanding that you understand that this is a
substantial issue, you do not have a legal opinion? You have what people
have suggested to you and what you have heard and what you have read, but
you are telling this committee you do not have a legal opinion that affirms
your view that this is constitutional?
Mr. Oakey: No, but we may have one before the committee wraps up
Senator Black: If you do, would you undertake to table it?
Mr. Oakey: Of course.
Senator Black: Thank you very much. I hope I do not appear that I
am argumentative; I am just trying to understand what the facts are here,
where the bottom line is. That would be very helpful, if you could, because
to date we have heard no one suggest this is constitutional other than you.
I am not saying you are not right.
Mr. Blakely, for the purpose of this question, I am one of your members,
and I want the information that is contained in this bill. I want the
financial statements and the balance sheet and, oh my God, I have quite a
shopping list of things I want. Could I get it?
Mr. Blakely: Yes. You are entitled to it under the various
provincial statutes, you are entitled to it under the union constitution and
you are entitled to it if you go to the union meetings on a regular basis.
Every year, the annual general meeting of the union produces the financial
statements and gives them to people. At every monthly meeting, there is a
monthly financial statement. You may get it if you want. If you want more
information, you make arrangements with the business manager of the union,
and they will take you and put you down with the bookkeeper and you can look
to your heart's content.
Senator Black: What you have just said is very important. I really
want you to consider that because we have heard from others that that is not
necessarily the reality, that sometimes information is not shared freely and
that individuals have not the rights that you have just indicated they have.
You are comfortable with what you have just said?
Mr. Blakely: Yes, sir, I am. There was a case in British Columbia,
I believe two or three cases in the West and a couple in Ontario wherein
under the provisions that allow you to go to the labour board and say, "I
did not get the disclosure I want," when people go to the labour board,
they get the disclosure they want. The system works.
Senator Black: May I ask that same question to the representative
from the writers guild? If I am a writer, you are my representative and I
want the information from you that is contained in this bill, can you tell
this committee that I would get it?
Ms. Parker: I can certainly tell the committee that we circulate
audited financial statements once per year after our annual general meeting,
and we do monthly reports on our finances. Our industry is different in that
most of our production, our TV cycle, is built up towards the end of the
year, but we have a treasurer who is an elected member of the Writers Guild
of Canada. We have auditors. All of the information is reviewed, certified,
passed and circulated to our members. We only wish they would be that
interested; they seem to delete a lot of our emails.
Senator Black: Your statement is that if a member requested the
information that is contained in here, you are telling this committee you
would provide it?
Ms. Parker: Yes.
Senator Black: Thank you very much.
Senator Ringuette: I will start my questioning with Mr. Oakey.
Mr. Oakey, you indicated that you have 3,500 members across the country.
Could you provide this committee with the list of your members and how much
each of them is paying in membership fees?
Mr. Oakey: Not at the moment. We are a volunteer organization, and
that is not something I collect.
Senator Ringuette: Are you a not-for-profit organization?
Mr. Oakey: Yes.
Senator Ringuette: Under the Canada Not-for-profit Corporations
Act and under the Income Tax Act of Canada, non-profit organizations are to
submit, like unions, to their membership their financial statement at least
once per year, and they are also to submit to the Canada Revenue Agency an
income tax report once per year.
In order to comply with the Income Tax Act and the Canada Not-for-profit
Corporations Act, why was it only a few months ago that Merit Canada filed
its 2010, 2011 and 2012 income taxes? I have here with me also —
The Chair: Senator, could Mr. Oakey reply to your question?
Senator Ringuette: Yes, because I find there is a contravention in
at least three of the five years with regard to, first, the Canada
Not-for-profit Corporations Act, which requires that you submit yearly to
your members your audited financial statement. That is in the Canada
Not-for-profit Corporations Act, and it is also in the Income Tax Act with
regard to non-profit organizations.
Mr. Oakey: All of our filings are up to date, so I am not sure
what the issue is.
Senator Ringuette: It was not up to date until such time that the
House of Commons committee told you to do so, so you hurried up and supplied
it to the Canada Revenue Agency.
Mr. Oakey, when did you file Merit Canada's income tax report for 2010,
2011 and 2012? Please, go ahead and disclose. Feel free to disclose.
The Chair: Senator Ringuette, we are asking questions about the
bill. I do not think we are asking questions —
Senator Ringuette: No, we are talking about the Income Tax Act,
and this is very particular because Mr. Oakey in his statement talked about
the Income Tax Act, and I want to know if he complied. I want to know when
he filed the 2010, 2011 and 2012 income tax reports to, first of all, Canada
Revenue Agency; and, second, in regard to your 3,500 members.
The Chair: Do you have any response, Mr. Oakey?
Mr. Oakey: As I said, I am here to speak about the bill.
Senator Ringuette: You will not respond?
Mr. Oakey: We are completely compliant with all those acts.
The Chair: Thank you. That is the answer.
Senator Ringuette: We know that Merit Canada, with all due
respect, came here and has been lobbying quite a lot, actually. You do not
want the unions to lobby. In the last 18 months, you have paid 69 visits.
Among those 69 lobbying visits, you have met with a certain gentleman. You
met nine times at PMO. One very famous name in recent days is Nigel Wright.
You met Alykhan Velshi quite a number of times. He is the Director of
Planning at PMO.
The Chair: The question, Senator Ringuette?
Senator Ringuette: Did PMO help you draft this bill?
Mr. Oakey: I did not draft the bill, so PMO definitely did not
help me draft the bill, or no one who works for us.
The Chair: You asked the question, and it was responded to. I will
put you down for a second round.
Senator Nancy Ruth: Given this chair's injunctions, what I really
want to know, Mr. Oakey, is about the contractors that are part of your
association. Do they pay the same kind of wages for similar trades that one
might find in a union?
Mr. Oakey: It is a company-by-company decision, but there are many
instances. In Saskatchewan, for instance, the collective bargaining rate for
quite a few trades, we actually pay higher, or our member companies pay
higher, but we do not collectively bargain wages on behalf of our members.
When you apply to one of our member companies to work, you as an employee
negotiate your salary and your benefits. Merit, per se, the benefit plan
that we run, is a comparable plan. In some ways it is superior and in some
ways it is on par with, but it is a benefit plan that provides benefits for
construction workers, health and dental, retirement savings, all of those
Senator Nancy Ruth: You would not say your plan was necessarily
Mr. Oakey: It is not. If it was, there are other options.
Senator Nancy Ruth: When you say "higher wages" — I will ask you
to reply in a minute.
Mr. Blakely: I was helping you.
Senator Nancy Ruth: I come from Toronto, where there are, from
time to time, every year, industrial accidents in the construction trades
with immigrant labourers, those who are perhaps not legally here, with
scaffolding that is unsafe, and it goes on and on. Would contractors like
that be part of your association?
Mr. Oakey: Contractors that are members of Merit Canada, or our
provincial associations especially, run a benefit plan. That is what keeps
them all together, so there is no way to —
Senator Nancy Ruth: To know?
Mr. Oakey: No. In the end, you have to track those hours and pay
benefit costs on them. There have been quite a few studies. I was not really
here to talk about our safety record, but I am happy to. There have been
studies that have been done comparing the injury rate between Quebec, where
it is only union construction, so everyone who works is 90 per cent
unionized, and in Ontario where it is 70 per cent non-union, and the injury
rate is actually higher in Quebec. There are unsafe unionized contractors
out there, I am sure, and unsafe open shop contractors, and we would both
agree that none of us would ever promote policies or anything that would
harm or impact worker safety. I think that is an issue that we agree on,
keeping our workers safe, because ultimately they are the ones on the job
site delivering the projects.
Mr. Blakely: Merit has a very good benefit plan. Some Merit
contractors pay near scale, some pay woefully less, but that will all come
to rights when we get them to see the light.
Senator Campbell: In the interests of disclosure, I am a former
member of the steelworkers union and the Writers Guild of Canada.
When I sit here, there is a saying about who's ox is getting gored, and
that is what is going on here. Merit's ox is getting gored by the union.
They would love to take over all these unions. I understand that. I do not
have any problems with Merit or with the union. The workplace is what it is.
What I have difficulty with is the cavalier way that Mr. Oakey just
dismissed the constitutional matter. We will have five letters from five
provinces that all say that this is unconstitutional and is, in fact, a
matter for provincial jurisdiction. What do you say to that?
Mr. Oakey: I have not seen those letters, but I am happy to read
them and give you our comments.
Senator Campbell: Five provinces basically say it is
unconstitutional, that you are stepping into their bathtub.
Mr. Oakey: I have not seen the letters, but I am happy to read
them and provide our comment.
Senator Campbell: Do you think I am lying to you?
Mr. Oakey: No, I do not.
Senator Campbell: What do you think about the provinces that say
this is unconstitutional? It is a simple question.
Mr. Oakey: I think on this question they are wrong.
Senator Campbell: Five provinces are wrong. We will be sitting in
there getting that done, and you are right, of course.
Mr. Oakey: I think Stéphane Dion, the members of House of Commons
Senator Campbell: One thing I always loved about the Conservative
Party is that when you get a bill, you get a great name, like the "get out
of my town bill," you know, if you have done something wrong.
The Chair: That is not this bill, Senator Campbell.
Senator Campbell: No, this one is actually the "Tea Party-Merit"
bill, because you can see all this. I will end with this: You seem to
really, really like the United States, because you have five out of fifteen
pages here. I do not want to be like the United States. I do not want to be
like Australia, France or New Zealand. I want to be like Canada. Except for
you and the person who has put forward this bill, no one supports it. We
have not had anyone come here and say that this is good legislation.
The Chair: Senator Campbell, do you have a question?
Senator Campbell: What do you say to all these people?
Mr. Oakey: Well, I am not sure who has testified or who is —
Senator Campbell: I would think in your case you would really want
to know that.
Senator Ringuette: They are in the back.
Mr. Oakey: It is my understanding the Canadian Taxpayers
Federation supports the bill.
Senator Campbell: That is right. Labour Watch. Do not forget them.
These are all people who are on the taxpayers' dime and not paying anything
either. Thank you, Mr. Chair.
Senator Maltais: Senator Campbell, I realize that you like the
Conservatives, but show a bit of restraint; do not shout it from the
rooftops. I will give Mr. Oakey a bit of a break and direct my questions to
We have heard from a lot of witnesses and I tried to get a definition
from them, and you may be able to give me that. I think you are certainly
the best person to ask.
In unions, you have to engage in political activities for the purposes of
collective agreements and so forth, and all the other usual activities. But
how would you define other political activities?
Ms. Presseault: That is an interesting question. However, I do not
work for a union. I work for a professional body that, through provincial
legislation, governs the accounting profession, the practice of CGAs in
Canada. We do not make that distinction; we do not engage in political
activities. The only activities we would engage in involve lobbying, and
those activities are disclosed through lobbying reports. I am not really
able to answer your question.
Senator Maltais: Certain witnesses — and I say this without
prejudice — told us that, under the charter applicable to unions, they are
entitled to engage in political activities for the purposes of collective
agreements, as well as in "other political activities." I would like to
know what "other political activities" refers to, but you are not able to
Ms. Presseault: I am not the one who would be able to answer that
Senator Maltais: Thank you.
Senator Moore: Thank you, witnesses, for being here. Mr. Oakey, in
Canada we have an open, free-market, competitive system of enterprise. How
do you think that system would be helped by unions, professional groups and
writers' guilds releasing all their confidential business information?
Mr. Oakey: Overall, transparency in and of itself is a good public
goal, and this legislation goes a long way in that. I recognize that the
requirements are different than those of some other organizations, but that
is not a criticism of this bill; it may be a criticism that other statutes
need to be updated.
Senator Moore: You did not answer my question. How do you think
the competitive economy that Canada enjoys today would be helped by groups
that I just mentioned disclosing all their confidential information?
Mr. Oakey: I am not sure this is all confidential business
information. I know that in construction the building trades unions, because
of the regime in the United States, are already required to disclose a lot
of this information. In construction I do not think it will have much of an
impact on the competition.
Senator Moore: You do not think it would be harmful for some of
these organizations to have their financial information made known to their
competitors through the Internet? If it goes there, it will go everywhere;
it will be all over the place. That might be the vehicle for disclosure, but
it will spread. You do not think that would be harmful?
Mr. Oakey: To use an example, the Canada Elections Act has similar
disclosures, although the limit there is a lot lower, about $100. You could
ask a candidate or someone who works on an election campaign whether
disclosing how much you paid for signs has led to no one wanting to work for
Senator Moore: That is not the same thing. Under the Canada
Elections Act you can only spend so much. You have to file a statement.
Mr. Oakey: I am talking about whether disclosure has an impact on
businesses. The name, the amounts and the purpose is disclosed for over
$100. If you rent 1,600 square feet in a strip mall and it says in the
election return that you paid $1,300 for it, I do not think that has had any
Senator Moore: There is an election cycle and that changes. That
is not the same as information being out there day- in and day-out when
people are competing for jobs.
Mr. Oakey: This would be a yearly disclosure.
Senator Moore: You do not think this would be harmful at all for
the Canadian economy?
Mr. Oakey: Absolutely not.
Senator Moore: That is amazing. I have finished.
Mr. Blakely: Mr. Oakey volunteered on my behalf that building
trades unions disclose this information in the United States. Canadian local
unions of a building trades union do not disclose in the United States. What
goes on in Canada stays in Canada. There may be three or four people at the
top of their organizations, an international vice- president, for example,
who may be paid out of the United States. They would be disclosed there, but
99.9985 per cent of Canadian building trades unions do not disclose
information in the United States.
Senator Ringuette: Mr. Blakely, last week the promoter of this
bill, Russ Hiebert, told us, and it is on the record, that Canadian unions
reported in the U.S. that they were giving political contributions in
You are saying, Mr. Blakely, that that is impossible?
Mr. Blakely: We do not disclose in the United States.
Senator Ringuette: Thank you very much.
Senator Moore: I find it interesting, Mr. Oakey, that you think
that unionized groups, be they writers or labourers, disclose all of their
financial information — and if you read the act you will see that it goes
beyond the $5,000 limit and covers everything, even the guy who cuts the
lawn at the union hall — yet I think you said it is not appropriate for
these companies, who enjoy tax benefits and write off their dues, to
disclose the same thing. Is that what you said?
Mr. Oakey: That is not quite what I said. I said that there are
different legal and tax structures around labour organizations, and that is
why, in many other countries, public disclosure is the norm. The level of
disclosure that is required of corporations or not-for-profit groups is a
discussion that needs to be had. It is a discussion that I welcome. Like Mr.
Blakely and others have said, we are not calling for any kind of disclosure
that may not apply to us. If we meet the definition, just like all of the
labour organizations that do or do not, then we will disclose.
I would encourage any senator or member of Parliament who feels that the
disclosure requirements of any organization that receives tax benefits need
to be enhanced to introduce such legislation.
Mr. Blakely: If we were required to make the same kind of filings
as Mr. Oakey would, we would do that. If the Parliament of Canada tells us
to file under Bill C-377 and makes Mr. Oakey and all the other people who
get the same tax treatment to do that as well, I might not like it but I
will do it.
Senator Oliver: My question is about privacy under Bill C-377. The
witness who sat at this table immediately before you was Jennifer Stoddart,
the Privacy Commissioner for Canada. She has had a very distinguished career
as a public servant. She said that if Bill C-377 were to pass in its present
form there would be an exception with respect to the confidentiality rule.
She went on to say that she has concerns about more exceptions.
Mr. Oakey, will you respond to two things that she said? She said
specifically that the names of individuals will still have to be disclosed
for certain disbursements that have a cumulative value of $5,000. She also
said these disclosures clearly involve personal information and, in many
cases, sensitive personal information.
Mr. Oakey, that concerns me coming from the Privacy Commissioner. I would
like to have your response to her comments and concerns.
Mr. Oakey: She did raise some of those concerns at the committee
in the House of Commons, and I do understand that it is a concern. I think
this bill gets the overarching balance between transparency and privacy
right. I think that is why there were amendments that addressed the $5,000
level with respect to labour relations activities. On salary disclosure, in
the previous unamended version it was any and all employees and it is now
employees in a position of authority or earning over $100,000. We are
comfortable that the balance is correct and is as needed. That is why those
amendments were put forward, and I think that ultimately that gave the
government a certain amount of comfort and that is why they ultimately voted
in favour of the legislation.
Senator Oliver: Given those amendments, are you satisfied that
what Ms. Stoddart calls "sensitive personal information" has been covered
Mr. Oakey: Her definition of sensitive personal information may
differ from mine. I think the amendments have largely been in response to
her testimony at the House of Commons committee, and I think that those
amendments have gone a long way to addressing her concerns. She comes at it
from a certain perspective, and I appreciate that. However, I think that the
legislation, as it is currently amended, seeks to strike that balance, and I
think it does.
Senator Oliver: You referred to what "she" did in the House of
Commons. You said she gave her evidence in the House of Commons months ago.
Since then, the amendments were made and she is here today, amendments
having been made, still expressing grave concern about the needed disclosure
of sensitive personal information.
It would seem to me that that would mean that she still has concerns,
notwithstanding the amendments.
Mr. Oakey: I agree. Her testimony stands for itself: I think she
does have concerns.
Senator Tkachuk: Mr. Blakely, I do not know if you can speak for
all unions or maybe your union, but do you have a check-off system for
political donations within your union?
Mr. Blakely: Some unions do, not very many.
Senator Tkachuk: How would they administer that? Do they have a
choice as to who they give the money to or is it mandated?
Mr. Blakely: On the political check-off, the member has to sign.
They normally collect the money, and when it comes time for election the
political action committee will come in and say we will make some
recommendations to you, and people choose. Generally speaking, if you look
at the building trades unions, my guys in New Brunswick support the
Progressive Conservatives. My guys in Newfoundland support the Progressive
Conservatives. My guys in Ontario have supported the Liberals to some
degree. My own local union, we give some money to each of the political
parties. Provincially, because that is the only thing we are entitled to do.
Senator Tkachuk: Is it mandated? Can a union member refuse?
Mr. Blakely: To give his share of the money?
Senator Tkachuk: Yes.
Mr. Blakely: It generally boils down to a quarter or something.
That was the case of Lavigne, which went to the Supreme Court of
Canada, which said part of the issue there was proportionality. It is so
small that it does not matter.
Senator Tkachuk: What do you mean?
Mr. Blakely: Mr. Lavigne was a member of the Ontario Secondary
School Teachers' Federation, I believe. When you totalled up all the bits of
his dues that went to the political action fund, it was like $14 or
something over five years. They said it was perhaps too small to make the
union administer it.
Senator Tkachuk: The political action fund itself, the money is
taken out and then it is either donated to a political party, or is that
money also being used for lobbying activity, other stuff? Is it strictly
Mr. Blakely: Generally, no. Lobbying is done through the general
treasury of the union, or the council.
Senator Hervieux-Payette: My question is for Ms. Presseault, who
helped review the legislation applicable to not- for-profit corporations. In
order to improve the transparency of companies and unions, would you suggest
that, instead of moving forward with Bill C-377, we take the time to sit
down with both groups to identify the necessary information, since you have
the information concerning the current financial statements?
Should we make an effort to figure out what the information will be used
for to make sure it is equal on both sides?
Ms. Presseault: Yes.
Senator Ringuette: My question is for Mr. Oakey. Forgive me, but I
have not had time to search for your mother ship, ABC Merit in the U.S.A. On
your website are the following comments:
To reduce administrative redundancies, and respect Provincial
jurisdiction, Federal laws and regulations pertaining to labour should
be limited to federally regulated industries. All of Canada's provinces
and territories already have laws and regulations pertaining to
employment standards, working conditions, labour relations, wages, and
hours of labour of not federally regulated industries.
The Chair: Your question, please.
Senator Ringuette: It is coming.
Merit Canada believes that the Federal Government should respect the
legitimate authority of Provincial Legislatures to regulate the
construction industry in their jurisdiction without interference by the
That is on your website. What do you have to say about your comment
The Chair: Would you like to respond or would you like to write
back on that?
Mr. Oakey: In relation to that letter?
Senator Ringuette: You cannot say one thing on one issue and say
the exact opposite on another issue.
The Chair: Clarify your question, please.
Senator Ringuette: Clarify the question? I have just read what is
written on the Merit website. What is written on the Merit Canada website is
contrary to what we have just heard in the statement from Mr. Oakey.
The Chair: Thank you. Do you agree with that?
Mr. Oakey: No.
The Chair: That is the answer, thank very much.
On behalf of all members of this committee, we greatly appreciate our
witnesses today. We thank you.