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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.

[English]

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 Branch.

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.

[Translation]

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 stood.

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 accountability objectives.

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.

[English]

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 individuals.

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.

[Translation]

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 for corporations?

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 servants?

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.

[English]

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 question.

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 disclosures?

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 disclosure.

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 consent.

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 transparency.

Senator Greene: Does the act not require you to balance transparency issues?

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 that right?

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 interesting question.

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 privacy.

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 mind?

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 round two.

[Translation]

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 element.

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 Act.

[English]

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 officers?

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 for Canadians?

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.

[Translation]

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 benefit.

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.

[English]

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.

[Translation]

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 tax evasion.

Bill C-377 will not improve the governance of unions. Governance of unions, like for many other organizations, lies where it belongs — with their members.

Thank you for your time. I would be pleased to answer any questions the committee may have.

[English]

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 this legislation.

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 countries.

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 countries.

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 financial disclosure.

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 as well.

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 onerous.

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 position.

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. Thank you.

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 industry.

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 programming.

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 firms.

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 that.

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 same information?

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 bill?

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 States.

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 the chain.

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 its study.

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 benefits. Yes.

Senator Nancy Ruth: You would not say your plan was necessarily inferior?

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.

[Translation]

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 Ms. Presseault.

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 tell me.

Ms. Presseault: I am not the one who would be able to answer that for you.

Senator Maltais: Thank you.

[English]

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 that candidate

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 effect.

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 Canada.

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 off?

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 political activity?

Mr. Blakely: Generally, no. Lobbying is done through the general treasury of the union, or the council.

[Translation]

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.

[English]

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 Federal Government.

That is on your website. What do you have to say about your comment earlier?

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.

(The committee adjourned.)