Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue 35 - Evidence - May 30, 2013
OTTAWA, Thursday, May 30, 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 10:30 a.m. to give consideration
to the bill.
Senator Irving Gerstein (Chair) in the chair.
The Chair: Good morning, members of the committee. I call this
meeting of the Standing Senate Committee on Banking, Trade and Commerce to
Today we continue our consideration of Bill C-377, An Act to amend the
Income Tax Act (requirements for labour organizations). Yesterday we heard
from the Privacy Commissioner of Canada as well as representatives from
As a reminder to colleagues, today's meeting will be three hours in
In our first hour, we are pleased to welcome Richard Perron, President,
Syndicat de professionnelles et professionnels du gouvernement du Québec;
Adam Jackson, Regional Vice President, Union of Taxation Employees, PSAC;
Claude Poirier, President, Canadian Association of Professional Employees,
CAPE; and Moin A. Yahya, Assistant Professor, Faculty of Law, University of
We will start with opening statements.
Mr. Perron, the floor is yours.
Richard Perron, President, Syndicat de professionnelles et
professionnels du gouvernement du Québec: Thank you, Mr. Chair. As
President of the SPGQ, which represents 25,000 professionals with the
Government of Quebec, I would like to thank the members of the Senate
Banking, Trade and Commerce Committee for this opportunity to express our
strong objection to Bill C-377.
Over the next few minutes, I will summarize the gist of the argument in
the brief that we sent you on this bill. We maintain that Canadian unions
are already accountable under tax laws and that our union annually sends the
Canada Revenue Agency its audited financial statements.
Our union has established a very comprehensive process for
accountability, financial transparency and internal and external auditing. I
will elaborate on this process because these questions are central to the
arguments made to justify the introduction of this bill.
The SPGQ's audited financial statements are 15 pages long and include a
statement of revenues and expenses, a statement of changes in net assets, a
balance sheet, a cash flow statement as well as complementary notes
providing details about the union's articles of incorporation, changes in
cash position, receivables, tangible assets, employee future benefits and
other union commitments. We are very transparent.
These financial statements are widely disseminated. They are sent to our
592 union delegates once a year and are accessible on request to each of our
25,000 members, in compliance with section 47.1 of the Quebec Labour Code.
Moreover, these detailed quarterly reports are discussed in depth at
labour council meetings with the 39 elected representatives of our union
locals. Finally, our union can rely on the diligent work of its monitoring
committee, and external audit firms duly authorized to report to our
This accountability process at the SPGQ illustrates how the democratic
operation of unions is accompanied by often exemplary financial
transparency. These various measures go further than those taken by the
employer's side, or other associated organizations that support Bill C-377.
Management is not covered by this bill at all. Amendments to this effect
were put forward in the House of Commons, but they were simply dismissed by
the Conservative members, thereby confirming, we believe, the profoundly
ideological and partisan nature of this bill.
We would also like to draw your attention to the useless administrative
costs of this bill, both for taxpayers and for unions. We would like to
point out the contrast that exists between this increase in bureaucratic
requirements and the Conservative government's recent announcement of an
ambitious action plan to reduce regulatory and administrative requirements
for corporations, not to mention the abolition of the firearms registry on
the grounds that it was too costly.
We would also like to highlight the fact that C-377 is a private member's
bill, thus subject to the Department of Justice's in-depth legal analysis to
insure charter compliance.
We would also like to raise the major human rights and freedoms issue
arising out of this bill. As established in a legal opinion produced by Mr.
Alain Barré, Bill C-377 represents a blatant case of legislation disguised
to encroach on provincial areas of jurisdiction relating to labour
relations. Legal opinions by Professor Henri Brun and Robin Elliot,
constitutional law professor at the University of British Columbia, draw
similar conclusions, as did the Quebec Bar recently.
We would like to draw a parallel with the United States where information
disclosure obligations for union organizations fall under the U.S.
Department of Labour. The U.S. did not use tax law to manage labour
relations. A number of burdens on regulatory changes made in the U.S. over
the last 20 years were motivated by partisan interest. They have only been
useful to organizations that are ideologically hostile to unions and to the
principles of collective bargaining.
We note that a number of employers' side organizations have increased
their lobbying of parliamentarians and of the Prime Minister's Office in
order to push for passage of this bill.
Merit Canada that was here yesterday reported no less than 88
communications or meetings for the purposes of supporting Bill C-377 in
their disclosure to the lobbying commissioner.
At least 12 of these communications were with the sponsor of this bill,
Mr. Russ Hiebert. Some of these included Mr. Harper's chief of staff, Mr.
Nigel Wright, who has been in the news of late, here in Ottawa. Perhaps he
attended the big reception held by Merit Canada for the Conservatives the
day before yesterday to celebrate the upcoming passage of Bill C-377.
With respect to the Canadian Federation of Independent Business, 122
communications were disclosed to the lobbying commissioner for the purposes
of discussing Bill C-377. We note their absence before this committee;
perhaps they prefer backroom politics rather than parliamentary democracy.
All of this supports our opinion that this bill deals directly with
labour relations and that it is truly tax legislation in disguise.
For these reasons we call upon your committee to reject this bill or, at
the very least, to completely amend it so its requirements deal strictly
with tax matters, and apply equally to management.
Claude Poirier, President, Canadian Association of Professional
Employees: I wish to thank the committee for inviting us to appear
before you today. You have received our brief, I will not read it. That
said, I would appreciate it if you would.
The Canadian Association of Professional Employees represents 13,000
public servants from three major professional groups. The EC group includes
economists, statisticians, policy analysts and other social science
specialists. These are the government's experts. The TR group includes
translators, interpreters and terminologists who work to uphold the public
service's bilingual face and also provide services in over 60 combinations
of foreign languages. Finally, here in Parliament, analysts and research
assistants help you do better work on behalf of Canadians. We represent a
wide diversity of political views. Our members have voted Conservative,
Liberal, NDP, Green Party, et cetera. We have always avoided taking a
position for one party or the other. However, when a group as neutral as
ours, representing such a large number of professionals with a
long-established tradition of reserve and discretion, decides to speak
publicly, it should be viewed as a sign.
We have spoken up far more so over the last few years than is our wont.
We call upon the expertise of our members to do this. On the issue of the
census, for instance, we said that there would be a deficit in data
acquisition. Specialists are seeing this today.
Regarding last year's budget, we said that the Canadian economy would
suffer because of the cuts. The facts later proved that we were right. We
said that the gross domestic product would go down because of those same
cuts. Even the Minister of Finance admitted it.
This time, we have come to tell you that the bill is discriminatory,
unconstitutional, and unjustified. If you approve it, history will prove us
right. We have also come to tell you that the current government, which
decided to abolish the long-gun registry because of its outrageous costs, is
preparing to create a union registry whose costs will also be outrageous.
You still have the opportunity to prevent the facts from proving us
right. As Canadians and as taxpayers, we are stunned to see how legislators
choose to use a tax bill to defeat unions, to prevent them from doing their
work. If it were brave enough, it would pass a labour law. No, it prefers
instead to act indirectly.
Let us look at the facts head on. This bill is misusing the legislative
power that Canadians have granted to Parliament. This is a mishandling of
public money. Do not forget that we represent economists. Surely, you have
better things to do with your time. Let us avoid having the facts prove us
right yet again.
Thank you. It would be my pleasure to answer your questions in either
Adam Jackson, Regional Vice President, Union of Taxation Employees
(PSAC): Good morning. Thank you, honourable senators, for inviting me to
appear. I am an elected representative of the Union of Taxation Employees, a
component of the Public Service Alliance of Canada. The PSAC has
approximately 180,000 union members, of which 27,000 hold membership in the
Union of Taxation Employees. I am here today to voice my opposition to Bill
C-377 as a representative and as a union member and to answer any questions
on my opinion of the merits of this bill.
In my capacity as Regional Vice President of the Union of Taxation
Employees I have attended dozens of union conventions and local annual
general meetings. At each of those events, financial statements were
provided, debated and approved by the attendees, whether they were delegates
at a national convention or members at a local annual general meeting.
Budget items were presented for all to see and to be democratically voted
on. Never have I seen or heard of financial transactions that were not
openly and transparently presented. Not once have I heard of a member being
denied the right to see what their dues are spent on, and not once have they
been denied the right to participate. In our unions alone, financial
statements are mailed out to each local every month for members' review and
perusal. This is transparency without exception.
While on the subject of transparency, at the most recent PSAC triennial
convention in April 2012 here in Ottawa, not only were financial statements
and the budgets presented to the delegates for debate and voting but certain
amounts were even reported on by Kathryn May of the Ottawa Citizen,
who was in the audience. It is arguably the pinnacle of transparency if a
journalist can so easily report on these items. The amounts reported in the
Ottawa Citizen also included money allocated to political action,
open and available for everyone to see.
If its stated intention is to be accepted, Bill C-377 is totally
unnecessary as it creates legislative requirements that are already met and
it creates a cost to the government that you would have already heard about
from prior witnesses.
The Canadian Labour Congress initially estimated that the legislation
will cost $32 million to $45 million to track the spending of roughly 25,000
local unions. I understand this has been revised to upwards of $60 million.
In addition, there will be a cost that we are still unclear on, the cost to
unions themselves and to the membership. In order to be compliant, the
accounting firm that the Union of Taxation Employees uses has suggested
that, based on their interpretation of the bill, it will require 30 per cent
more time at their end and perhaps even an extra salaried position within
Across the PSAC and its components and directly chartered locals this
could be considerably higher — again, to provide exactly what we already
provide. Is this really necessary?
The bill seems to be burying labour organizations in red tape.
Ironically, red tape is precisely what the Canadian Federation of
Independent Business, a proponent of this legislation, claims to be against.
I would be remiss if I did not address some of the champions of this bill
and their motivations. It is interesting to note that the Canadian
Federation of Independent Business, Merit Canada and the National Citizens
Coalition, in addition to Mr. Hiebert, the author of this bill, have no
union affiliation and do not represent union members, so I must ask what
their motivation is.
Mr. Hiebert admitted that he had not received any complaints from union
members. Merit Canada's own website explains that it succeeds the Canadian
Coalition of Open Shop Construction Associations, which formed in 1999 to
challenge the constitutionality of a compulsory union membership requirement
to work in Quebec's construction industry.
The Canadian Federation of Independent Business's mandate includes
nothing on labour organizations or union membership, and the National
Citizens Coalition's slogan is "More freedom through less government."
Forgive my confusion over why these groups and individuals see the need
for such a bill. Who is being transparent and who is not?
Many questions remain unanswered about the impacts of this bill. Are all
employee associations, professional associations, bargaining agents and
other groups that represent their membership included in this bill? Is Merit
Canada expected to comply as well, or will it apply only to union bargaining
agents? I am by no means nearly as qualified as a lawyer on this issue, but
it is not a stretch to posit that it cannot possibly be fair in our society
to target one group over others.
That said, it is clear that the legislation is discriminatory, a blatant
invasion of privacy and punitive. In fact, it has been said by many that
this bill is unconstitutional, including by former panellists here, a
provincial government and my own union. Should this bill be given Royal
Assent, it appears that it would immediately spark a legal challenge, and I
cannot imagine how that can be seen as an efficient use of taxpayer dollars,
my own and my fellow members' included.
In closing, I would like to again state that our opposition is not to
transparency; it is opposition to redundancy and, further, to the
discriminatory nature of this bill. Unions are not the organizations movies
are made of, they are not secret societies with grandiose schemes hiding
money from the very members that pay union dues. Unions are inclusive, not
exclusive. They are open and transparent and must always prove this to their
membership, as they do. They are also democratic institutions with elections
of officials and votes on financials.
Quite obviously, this bill is lending itself to the theory that it is but
a prelude of things to come. Even some of the proponents of this bill would
be hard-pressed to deny the impending attack on the Rand formula and
automatic dues check-off.
I sincerely hope that the committee sees and understands the value,
openness and inclusiveness of unions. I believe that upon deeper examination
you will see the injurious targeting and redundant nature of this bill, and
I hope that you will not pass it.
Moin A. Yahya, Assistant Professor, Faculty of Law, University of
Alberta, as an individual: Thank you for the opportunity to speak to you
today about Bill C-377. In the interests of transparency, I would like to
clarify that I am an associate professor of law at the University of
Alberta. I am also the faculty representative of our staff association and
was a shop steward when I was a graduate student in the economics department
doing my PhD at the University of Toronto. I am also an ardent
provincialist. Senator Black can appreciate that comment.
Nonetheless, it pains me to say that this bill is perfectly valid federal
legislation. My most recent publication is about the Supreme Court of
Canada's most recent division of power ruling on the Securities Reference
case, and I will speak to how that applies to this bill later.
I have reviewed some of the arguments made by the bill's opponents. I
have watched the tapes in the previous week. I will focus on the division of
powers argument. If time permits, I will speak a bit about the freedom of
association. If not, I will leave that to questions.
The argument against the constitutionality of this bill goes as follows:
Since this bill regulates labour, and since labour is provincial, this bill
This argument fails for the following reasons: First, the bill does not
regulate behaviour of labour organizations. It is simply a disclosure
requirement. It is a collection of statistics; it requires disclosure under
the Income Tax Act for the very reason that union dues are tax deductible.
Similarly, if charitable organizations that are incorporated provincially
want to issue a tax-deductible receipt, they have to go to Revenue Canada
and comply with federal tax legislation. This puts the unions on the same
footing as charitable organizations, which have been under this legislation
for many years. It is as onerous for charities, some of which are only
three- or four-person organizations, to fill out that paper work as it would
be for unions to fill out this sort of paperwork.
That is the extent of what this bill does. It is not regulating behaviour
or saying that unions of governance model A get a higher tax deduction or
tax credit than a union shop of governance model B. It simply says that you
get your tax credit and you have to report.
The tax code is full of tax deductions. Think about the tax form that you
fill out. You get deductions for education, health, sports and fitness.
These are all provincial areas of regulation. No one has ever said those are
unconstitutional and that this is somehow an invasion of provincial policy.
If this bill is unconstitutional, I urge you to look at all the deductions
that you get to claim and strike them all from the books. That would be the
correct and principled approach to take. The fact is that those deductions
are perfectly valid. They have withstood the test of time.
Even if this bill were to regulate labour, it would not end the
discussion because there are three heads of power that this bill falls
under: the Income Tax Act, the Boards of Trade Act, and section 91.6 of the
Canadian Constitution, which no one has talked about, on the power of the
federal government over statistics and the census. You have three heads of
power to validate this bill.
Opposing it is section 92.13 on provincial property and civil rights. In
order to understand how these two heads of power can coexist, if at all, you
have to look at the jurisprudence. Since time is short, I will mention
briefly some federal acts that have been found to be constitutional:
General Motors of Canada Ltd. v. City National Leasing upheld the
federal constitutionality of the federal Competition Act. The FCA regulates
contracts. It regulates the very provincial nature of contracting between
businesses, small or big. Yet, that was a valid exercise because it did not
purport to do a full, wholesale invasion of provincial territory; it
regulated at the periphery, which is perfectly valid. The Trade-marks Act
also regulates contracts. It does not do a wholesale invasion but regulates
at the periphery. The much maligned firearm registry was challenged on the
fact that it regulated provincial territory but was upheld as
constitutional. The Personal Information Protection and Electronic Documents
Act, PIPEDA, the very privacy act that people are using to impugn the
validity of the proposed legislation, is a wholesale invasion of commercial
activity at the provincial level; and yet it is a valid federal enactment. I
would say that this collection of statistics, if it is a regulation of
labour, is at best a regulation at the periphery just like all of the other
legislation standing today.
Finally, with respect to the Securities Reference case, I should
note that when the Supreme Court struck it down as being unconstitutional
because it was a wholesale invasion of provincial territory, it noted that
there were two possible aspects of the federal bill that could have been
saved had they been the only focus of the bill. One was the collection of
national data. The collection of national data has always been in the
purview of federal legislation. In other words, if the federal government
wants to collect statistics under its power in section 91.6 or any of it its
other heads of power, it is a perfectly valid exercise of its federal power.
At the end of the day, basically this bill is in that periphery.
Regarding the freedom of association argument that I have heard, in
British Columbia, the Supreme Court of Canada case, and recently in
Ontario (Attorney General) v. Fraser, said only that the government has
to substantially impair collective bargaining. In Ontario v. Fraser,
it was to the point of impossibility. The argument that somehow this will
affect freedom of association would not stand under the current
jurisprudence. Thank you.
The Chair: Thank you very much. I will turn to my list of
questioners and start with the deputy chair of the committee, Senator
Senator Hervieux-Payette: You hold an election every year, so I
was wondering about the rate of participation of people who attend your
annual general meeting.
One sentence for each because I think I want this on the record. You are
democratically elected, so I want to know how the process works and how you
become a candidate and so on. You represent the people and are responsible
for the financial management of union dues. May I have an answer from each
of the unions?
Mr. Perron: In the Syndicat de professionnelles et professionnels
du gouvernement du Québec, we elect our executive committee through the
universal suffrage of our members. Our 25,000 members can attend more than
50 general meetings organized from Gaspé to Ottawa, from Sherbrooke to
Val-d'Or, where all members can attend and listen to a debate between
candidates, ask questions, and vote at the end of that debate. They can
directly elect their executive committee, just as they can elect their
workplace union representative and their section representative in various
regions to sit on the union council. We are a model of democratic
Mr. Poirier: At CAPE, it is the same thing. The majority of our
members are in Ottawa. We represent people from Vancouver to Newfoundland.
To give the right to vote to everyone, that is universal suffrage, 13,000
members have the right to vote and to have their say.
I am just a kid from Quebec. I was elected to do a job in Ottawa. Anyone
can step forward and be elected, but a proper democratic debate must be
Mr. Jackson: It is not a lot different. I will speak first to the
local level of the Union of Taxation Employees. They have annual general
meetings attended by 50 per cent to 60 per cent in my region. The meetings
are at night, so not everyone can come out as they may have families to take
care of. They have local elections, not every year but after two or three
years. My position at the regional level of the Union of Taxation Employees
is every three years at convention where delegates attend and vote. The
folks that I represent are in Sudbury, Thunder Bay, Peterborough, Kingston
and Belleville. They have delegates and choose their regional vice-president
for this purpose.
Senator Hervieux-Payette: This does not apply to Mr. Yahya, but I
have a question for him.
You gave us a lot of tax credits that apply under provincial
jurisdictions. Since I am from Quebec, you will understand that we have our
own tax system. We receive some money from the federal government that makes
us equal in the country in terms of programs and everything. Do you feel
that it is an intrusion of the federal government when we receive money for
education, social services, health, and so on?
Mr. Yahya: As a question of fact, does it intrude? Yes. As a legal
question, does it make it constitutionally invalid? No.
Senator Hervieux-Payette: Why?
Mr. Yahya: These are not watertight compartments. Sections 91 and
92 are not hermetically sealed. There is a lot of overlap, and the Supreme
Court has recognized that.
The point is that the federal government, if it wants to affect things
that are provincial, cannot completely replace or fully start regulating. In
the cases where the Supreme Court of Canada has struck down federal
legislation, it was where the federal government was trying to completely
supplant provincial legislation. A long time ago, there were the margarine
cases where the federal government was trying to use the Criminal Code to
criminalize margarine as opposed to butter. This debate happened all over
the world. The Supreme Court of Canada said that it was not valid because it
was in the provincial sphere. Simply putting it under the Criminal Code does
not work because in reality it falls under agriculture regulation. They were
trying to displace completely a product that falls under the provincial
The federal government is interfering at the periphery. It is trying to
achieve some national goal — perhaps a national collection of information;
and for the securities regulation, it would be a collection of national data
that the Supreme Court said was the only thing that would work.
The Canada Health Act is a good example. Health is provincial, but the
Canada Health Act tries to achieve national standards. Any time that is the
flavour of the federal spending, taxing, regulation or other, it is valid.
Similarly, if the province wants to use its laws to affect federal ventures,
it is valid as long as it is doing so on the periphery and not as a
wholesale invasion of federal power.
Senator Hervieux-Payette: I have a supplementary on the question
of health and education. Under which sections of the Constitution can the
federal government give money to the provinces?
Mr. Yahya: It would be under spending. I do not know the specific
sections, but I have my copy of the Constitution here if you want me to look
it up. It comes under plenary budgetary powers.
Senator Hervieux-Payette: You have not heard about the addition of
the 1982 amendment called equalization payments. It is in the Constitution.
Mr. Yahya: Right, but you would not need that. There are lots of
other things in there, for example the education tax credits. That has
nothing to do with equalization.
If you went to the United States and studied at a particular institution,
you could call the Canada Revenue Agency and ask, "Is this on the list of
approved educational institutions?" It might not be approved by my
province, but that is for the provincial purpose of accreditation. For the
Income Tax Act, I still have to go through the CRA. There is a dual
regulation for education: one on the ground in the province and one in the
Income Tax Act. It is the same for charities. I can get provincially
incorporated as a charity and never get an income tax registration. However,
if I want to start using the tax code, I have to comply with income tax
Senator Black: I want to make sure that I understand clearly
because you are the first legal expert who has appeared before us to argue
that this proposed legislation is constitutional. In my interpretation of
what you have said, if I have misunderstood, please, jump in and let me know
I have strayed.
The thrust of the other opinions is such that the pith and substance of
the bill relates directly in some way to regulating labour. If that is the
case, would you agree?
Mr. Yahya: Would I agree that it is unconstitutional?
Senator Black: Yes.
Mr. Yahya: No. That was the whole point of the second part of my
comments where I talked about General Motors of Canada Ltd. v. City
National Leasing and the Competition Act.
Senator Black: That is fine; I just wanted to clarify that. Your
view is that this bill does not regulate labour and is administrative only.
Mr. Yahya: Right, that is my first premise. If, however, you want
to make the argument there is a regulation because it is onerous for
whatever reason, it nonetheless survives all the subsequent case law, which
I spoke to. As well, there is the federal Tobacco Act and there is
provincial health legislation. There are all sorts of concurrent
Senator Black: The three heads of authority in the Constitution
insulate this bill. Please give those to me again.
Mr. Yahya: Taxation, under section 91.3; trade and commerce, under
91.2; and statistics and the census, under 91.6.
Senator Black: You think that those heads insulate this bill from
Mr. Yahya: All those heads give rise to the initial enactment of
this bill. Opponents will say section 92.13 on civil and property rights
conflicts with the bill. The Supreme Court has said that if you have this
kind of conflict, you have to do a balance test. How far are you going in?
If you are going in wholesale, stop; but if you are on the periphery, it is
Senator Black: If you were giving advice to a client on this
matter, what would you suggest, if anything, to do to the bill to
bulletproof it against a constitutional challenge?
Mr. Yahya: I would not say "giving advice to a client." I am
putting on my academic hat, just to be clear.
There is always room for belts and suspenders. You might make it clear
that the purpose of this is the collection of statistics to comply with the
fact that union dues are tax deductible. This is a regulation of
For example, if there were nowhere in the tax act to deduct the
consumption of bananas and all of a sudden section 149(2) was inserted and
said that those who consume bananas must disclose, it would be an odd place
to put it. On your tax form there is a place to fill out how much your union
or association dues were for the year. You take advantage of this Faustian
bargain; and, therefore, the tax authorities have the right to ask for
information, just as charities have to disclose and whoever else you wish to
put in there.
Senator Black: Do you think it would be bulletproof by expanding
Mr. Yahya: Make it clear.
Senator Black: Is there anything else you would suggest?
Mr. Yahya: I think that is sufficient. Sometimes over-drafting can
be overkill, as you can appreciate.
The Chair: I will have to put you down for a second round.
Senator Massicotte: Thank you for being with us. This is a very
important subject. My question is directed to Mr. Perron.
Can you confirm how the disclosure act applies to your situation? Is it
voluntary? Are there any obligations?
Mr. Perron: Yes, there are obligations. The Canada Labour Code is
very clear on this matter. I quoted it earlier. Quebec's Income Tax Act and
Canada's Income Tax Act both require that a great deal of information be
disclosed, and it is much more detailed than what any taxpayer or even a
business is required to provide.
Professor Yahya justified this intrusion by saying that it was necessary
to have more information. He compared that to charitable organizations, and
to right-wing think tanks that are promoting the bill. Unions have to follow
the very same rules, they have to provide the same level of information that
seems to be required, which is provided in an example. We already meet these
requirements. When more statistics are requested, it does not make sense
coming from the government that changed the statistical system because it
did not want to intrude on privacy, and now it is justifying it by
collecting statistics. These statistics are already available.
Senator Massicotte: We are talking about audited financial
Mr. Perron: Yes, by an external audit firm.
Senator Massicotte: That is disclosed to Revenue Canada. Is that
disclosed to the public?
Mr. Perron: To all of our members. Any reporter can have access to
our data, it is very detailed, as well as to all of our expenses.
Senator Massicotte: Your members would find your financial
statements hard to understand. Is there any requirement to disclose to your
members and to the public more than your audited financial statements?
Mr. Perron: Our audited financial statements complement our budget
statements, which are very detailed and are made to be understood by our
25,000 professionals who work in fields as diverse as biology and
international relations. They are not all accountants. I could send them to
you, and you could understand exactly where our money is going and how it is
Senator Massicotte: Budgetary revenue, is that provided to all
Mr. Perron: Yes.
Senator Massicotte: But not to Revenue Canada?
Mr. Perron: No.
Senator Massicotte: Is detailed information only available to
members during actual meetings, or is it also sent to them through the mail?
Mr. Perron: It is available on our website; we are part of the
21st century and we are achieving economies of scale, as well as not wasting
Senator Massicotte: Is this a legal requirement, or are you
voluntarily providing this level of detail?
Mr. Perron: The level of detail, that is voluntary. We are going
much further than what the law requires.
Senator Massicotte: The law requires audited financial statements.
Mr. Perron: Yes, and forms that are more than 15 pages long, which
we fill out.
Senator Massicotte: Would society benefit from having more
detailed information on unions? Public corporations provide more than
unions, and the argument is that public corporations need to provide
information to the entire public, not just their shareholders. Does this
argument apply to your union?
Mr. Perron: We represent our members, who pay dues, and we already
disclose much more information to our members than a private company will
disclose to its shareholders.
Senator Massicotte: Private, yes, but not public. Do government
businesses provide more information than the union does?
Mr. Perron: No. I have worked in a department for my entire
career, but the Access to Information Act allows a department to hide much
more than what a union can.
Senator Massicotte: I am talking about a public corporation,
especially one that deals with the United States; that is a great deal of
disclosure, perhaps even too much.
Mr. Perron: I do not know what else we could disclose. Our members
can ask us questions on any type of travel we do. I answer to the union
council, and they will ask me how much it cost, and I will reply that the
Senate paid the bill, although this rarely happens.
Senator Massicotte: We were talking about the election of union
leaders. Is it a confidential vote or a vote by a show of hands?
Mr. Perron: It is a secret ballot where everybody receives a
ballot. They enter, they register, they ask questions, they listen to the
debates, they receive answers, and at the end of the assembly, before they
leave, they go to the ballot boxes, as is the case at a provincial election.
Senator Massicotte: Is this mandatory under the law?
Mr. Perron: It is how the union operates.
Senator Massicotte: Is that the usual way it is done?
Mr. Poirier: We adopted statutes which lay out the rules. We
voluntarily gave ourselves very strict rules to ensure that our members
could have a confidential vote. There are no assemblies where votes are done
by a show of hands; that does not exist within CAPE.
Mr. Jackson: Ours are by secret ballot as well, and we would have
it no other way. It allows members to vote with their conscience and not be
discriminated against for it.
Senator Oliver: I would like to continue the line of questioning
started by Senator Black to Professor Yahya. You have told us the three
heads that you rely upon found in section 91 of the Constitution. Senator
Black asked what you would change, and you suggested perhaps expanding the
preamble. The Canadian Bar Association appeared here and said they had some
concerns about solicitor-client privilege. I would like to get your view on
Yesterday, Privacy Commissioner Stoddart appeared here and said that she
has concerns about some of the personal detailed disclosure that may be
required. Could you comment on both, please?
Mr. Yahya: To clarify, I watched the tape. I believe it was Mr.
John Hunter from the Federation of Law Societies of Canada who had concerns
about privilege. The CBA had concerns generally about the constitutionality.
I have a lot of time for John Hunter as he is one of this nation's most
excellent lawyers. He has litigated at the Supreme Court. I have no doubt of
the objectivity of his comments. When I heard his comments, I thought they
were interesting. I read the proposed bill and it dawned on me that Mr.
Hunter's approach is what I would call "belts and suspenders." It gets
back to the idea of how to beef up the language to make sure is it does not
run afoul of the solicitor-client privilege.
My response is that every bill and every act of Parliament is to be
applied by the agency in a constitutional manner. For example, you do not
need to say the collection of this information shall be done in a
constitutionally valid manner so the police cannot come in without a warrant
for search and seizure. It has to be constitutionally compliant.
Solicitor-client privilege is an ancient doctrine that predates American and
Canadian law going back centuries; and the Supreme Court has said so. The
Supreme Court of Canada consistently reads legislation to comply with
Even if you did not add the two exceptions that are right at the end in
the last two sections that Mr. Hunter alluded to, this would still be valid
because the CRA could not ask for anything that was protected by
solicitor-client privilege, or any other privileges, for that matter. If
they did, I suspect a lawyer, such as Senator Black before he joined this
august body, would write a letter to the CRA and let them know that the
information is protected by privilege, so they are not getting it — see you
in court. I suspect that the courts would uphold it, as they have repeatedly
There was a case a year or two ago before the Supreme Court dealing with
a regulatory agency trying to get at something that was protected by
Senator Oliver: Perfect.
Mr. Yahya: I see where he is coming from, but you could not do it
even if those words were not there.
In considering PIPEDA, there is a clause that says that if another
federal agency requires it, then you get it.
Senator Oliver: That clause is there, but the Privacy Commissioner
is concerned about the personal nature of some of the information.
Mr. Yahya: Fair enough. Those are policy concerns, but they are
not legal or constitutional concerns.
Senator Ringuette: My first series of questions is to Mr. Yahya.
What do you do at the Fraser Institute?
Mr. Yahya: To date, I have given educational lectures mostly to
high school and university students. I have spoken on three subjects: money
and banking; securities regulation, specifically with reference to the
Securities Reference case that went to the Supreme Court; and many years
ago I spoke about the movie The Corporation by Joel Bakan. I do some
research for them and have done some papers, but I have not written anything
yet for them, although I am supposed to.
Senator Ringuette: I see you earned your law degree at Arlington,
Virginia, U.S.A. You were particularly interested in the Sherman Antitrust
Act, which is akin to our Competition Act. That would be your field of
Mr. Yahya: It is one of my fields.
Senator Ringuette: I know a bit about the act and I find this
competition issue interesting.
In May 2012, you were appointed to the Selection Advisory Board for the
Immigration and Refugee Board of Canada. Who appointed you and for how long?
Mr. Yahya: I received a letter from both the Chair of the IRBC,
Mr. Brian Goodman, and Minister Kenney.
Senator Ringuette: Minister Kenney appointed you to the board.
Thank you. With regard to the argument you have put to the committee, you
said that the federal government has the jurisdiction to collect national
data. Yes, it has, but it does not have the jurisdiction to publicly
disclose the private information contained in the data that it collects. Any
information on the Statistics Canada website is in aggregate form. They
never disclose personal names or names of businesses. Your argument does not
fit the bill we are looking at. It also does not fit with how you tied it to
the Income Tax Act.
The Chair: I will interject to say that if you do not come to the
question, he will not have enough time to answer.
Senator Ringuette: Basically, I want to show you two documents.
The first one is the form for charitable organizations.
Senator Maltais: Excuse me, Mr. Chair. Could those documents be
tabled so we can look at them?
Senator Ringuette: Yes, that is not a problem.
The second one is the form that will be required from each local union.
The Chair: The question, I trust, is coming because you have one
Senator Ringuette: Mr. Yahya has to review the issue of charitable
organizations in terms of this legislation in every perspective that he had
put before us.
Senator Maltais: Mr. Poirier, you represent professional public
servants within the federal government, and you yourself were an economist.
You explained all of that at the start.
In your introduction, you often referred to the costs this would
represent to unions, as compared to the costs for the gun registry. Can you
tell me how much the gun registry cost from the moment it was created to the
moment it was abolished?
Mr. Poirier: I cannot tell you that. I am not an expert on the gun
registry. What I can say, is that I heard about the costs this would
engender, that is, the cost to our association if we were obliged to
disclose that information to the Canada Revenue Agency. We would have to
hire at least one full-time employee, who would probably have a couple of
Senator Maltais: I am sorry, but based on what I read in the
papers, the gun registry cost several billion dollars from the moment it was
created to the moment it was abolished. Is that in any way comparable to
what will happen to you?
Mr. Poirier: All things being equal, yes, that would be an
Senator Maltais: The forms are not exaggerated; will they cost
your unions several billion dollars?
Mr. Poirier: Not several billion. I said all things being equal.
Senator Maltais: You talked about the voting system. I am not very
familiar with union leaders, but are you re- elected by a universal vote or
by the leaders of union locals? How does that work?
Mr. Poirier: It is by a universal vote.
Senator Maltais: You are elected under a universal vote, Mr.
Perron, and you represent 25,000 members. Mr. Poirier, you represent 13,000
members and that gentleman represents 180,000 members. You are all elected
by a universal vote.
Mr. Poirier: Yes.
Senator Maltais: How many years are your mandates?
Mr. Poirier: In my case, it is three years.
Mr. Perron: Me too, it is three years.
Senator Greene: I have a short question for Professor Yahya. We
have a number of provinces coming who are opposed to the bill. Why, in your
view, are they doing that if they do not have to worry about the
Mr. Yahya: The pragmatic answer is that provinces — and I do not
blame them — want to jealously guard their constitutional turf if they can.
I will speak on my province's behalf. My province challenged the GST as
being unconstitutional, and it was enacted. They lost. They challenged the
firearms registry and they lost. Seventy, eighty years ago they tried to
muzzle the press and print their own currency and they lost. Provinces are
always trying to appropriate, just like the federal government. It is not
the provinces who decide, or the feds, it is ultimately in the courts. They
have challenged the Securities Reference and they won that one, so
that is one in five. That is not bad. Why are they doing it? It is a
pragmatic answer. They want to guard their territory.
Senator Segal: I have a question for Mr. Poirier and Mr. Perron.
In my opinion, the reason that justifies it, for those who are in favour
of this legislation — I am against it completely but for those who are in
favour — it is the idea, quite frankly, that unions conspire with each other
to get politically involved at election time under rubrics — coalition for
happy families, a coalition for a sunset every day, whatever — and then
actively engage in a fashion that is less than straightforward and open in
supporting one political party as opposed to other political parties.
You can make the case that that is a matter of provincial election law
and that there should be clarity in that circumstance. Do you have any views
on that issue? Does it trouble you at all that some of that may be going on?
I think even if that is going on this is the wrong way to deal with it, but
I would be interested. I would like to have your point of view on this.
Mr. Poirier: If I were to put my name beside one of the parties I
would be requested to give my position away. I would have to step down from
my position. As I said in my introduction, we have members who voted for
every party, and when I go to public meetings sometimes I have people
defending one party over another and I have to stay neutral.
M. Perron: I should point out that the Supreme Court of Canada
decision in Fraser was very clear: unions not only can, but should,
get involved in political and social debates for the good of society. That
was recognized by the Supreme Court of Canada.
Now, in the last election in Quebec, no union officially endorsed any
political party. I myself sent questions about the issues and the future of
the Quebec public service to the leaders of the four main political parties.
They answered us. We engaged with the leaders based on their answers,
because for us, our employer is whoever gets elected. You cannot separate
political involvement for the good of the taxpayer from defending the
interests of our members. The two are interrelated. We have a duty to get
involved. It is entirely desirable and democratically healthy for us to do
Senator Bellemare: My question is for Mr. Jackson.
You said, in your comments, that Bill C-377 was an attack on the Rand
formula. You raised that point. I did not understand. I would like you to
elaborate on that.
I also have a quick question for Mr. Yahya. Given that Bill C-377 applies
to one party to the bargaining — the union side — do you think that having
to disclose so much information will have an impact on labour relations?
Mr. Jackson: My response to that is no. I have suggested that
certainly in my union's opinion this is but a prelude to what is coming
next. That is what I said, not that this includes the Rand formula at all,
but if I were a betting man I would suggest that is coming down the line —
an attack on the Rand formula.
Mr. Yahya: If I understood your question correctly, it is whether
this should also apply to management.
Senator Bellemare: As it stands, will that not have an impact on
Mr. Yahya: It may have an impact on labour relations, but that
would not detract from the constitutional validity either under the division
of powers or under the 2(d) freedom of association. That may or may
not happen, but that has nothing to do with the constitutional validity. As
to whether you could include management, yes, the Securities Reference
decision said that collection of national data for publicly traded
corporations would be a valid exercise of federal power. You could easily do
that for management.
Senator Moore: Thank you for being here. My question is for
Professor Yahya. Do you teach constitutional law at the University of
Mr. Yahya: No, I do not.
Senator Moore: What do you teach?
Mr. Yahya: I have taught a variety of courses. I have taught
corporations; I have taught evidence; and I have coached the Laskin Moot,
which is a competition that contains a constitutional question. I have
taught energy and unfair trade. I have taught whatever the dean asked me to
Senator Moore: Given the fact that Canada enjoys an open and
competitive system of commerce, do you think that this bill, whereby the
confidential information, ability to bargain and resources of the parties
covered by this bill will be made public, enhances the competitive economic
system in Canada?
Mr. Yahya: I have no view. I came to speak on the constitutional
validity. That is an empirical economic question.
Senator Moore: Do you not have an opinion on that?
Mr. Yahya: Not on that specifically.
Senator Moore: That surprises me.
Senator Hervieux-Payette: Professor Yahya, if you have in fact
been a consultant or the leading lawyer in a case that involved a
constitutional matter, could you send us a copy of the case or at least the
title of the cases so that we can look at the rationale that you are using
when are you going before the court?
Mr. Yahya: Are you asking if I have been in front of the court?
Senator Hervieux-Payette: Yes.
Mr. Yahya: No, I have not. I wrote a case comment on the
Securities Reference case. I presented it to the Legal Education Society
of Alberta, at the invitation of the Centre for Constitutional Studies at
the University of Alberta, and I published it in their Review of
Constitutional Studies. That is available on the Web. I am happy to
provide that paper if you want.
Senator Hervieux-Payette: Okay, thank you.
Senator Black: I have a quick question, if I may, for Mr. Perron.
If my notes are accurate, you indicated in summarizing that you thought you
could potentially amend this legislation to relate to fiscal aspects only.
You contemplated the possibility of amendments to this legislation to
address fiscal aspects only. I took from your comment that if that could be
done you would be happy with the legislation. If that is accurate, could you
help us understand what those amendments would look like from your point of
Mr. Perron: The idea of limiting the application of this
legislation strictly to tax considerations was not an invitation to do so
and to waste the time of the Senate and of the Canada Revenue Agency, which
has far better things to do, such as combating tax havens and tax evasion,
rather than to be scrutinizing the terms of purchase of a heating system in
union offices, as Senator Segal suggested.
It is not our role to suggest amendments to you. We are saying that the
very essence of this bill, and I think Mr. Yahya should reread professor
Hogue's writings and get in sync with the experts who filed briefs — is a
matter of labour relations, just like the federal government's bills in
1937, when it wanted to pass—
Senator Black: That is not my question. I understood you to say
that there might be amendments that would be acceptable to you that would
relate to fiscal aspects only. Either I misheard or I did not.
Mr. Perron: The bill would have to be completely amended to avoid
the public disclosure of information that would benefit management and
right-wing think tanks in a poker game with the union's cards on the table
and management's hidden.
The Chair: Thank you very much, Mr. Perron. To all of our
witnesses, on behalf of the members of the committee, I would like to thank
you for your appearances here today. You have been very helpful.
Honourable senators, in this second hour we are pleased to welcome Pierre
Patry, Treasurer, Confédération des syndicats nationaux; and John Mortimer,
President, Canadian LabourWatch Association. Joining us by video conference
are Jim Stanford, Economist, Canadian Auto Workers; and Lou Serafini, Jr.,
President and Chief Executive Officer of Fengate Capital Management.
We will now go to our opening statements, starting with Mr. Patry. The
floor is yours, sir.
Pierre Patry, Treasurer, Confédération des syndicats nationaux: We
would like to thank the Standing Senate Committee on Banking, Trade and
Commerce for giving us this opportunity to present our observations and
comments on Bill C-377. Unions in Quebec and Canada are subject to various
laws that give them rights, responsibilities and obligations.
Section 47.1 of the Quebec Labour Code provides that a union organization
must disclose its financial statements every year. It must also remit a copy
of its financial statements free of charge to any member who requests it.
Similar requirements are found in section 110 of the Canada Labour Code.
A union also has a duty to provide fair representation for everyone who
pays dues to it, whether or not they are a member of the union. What is the
problem of transparency in labour organizations that the private member's
bill seeks to address? In the CSN, our financial statements are available on
our website. Our convention, which is held every three years, adopts the
audited financial statements and sets the budget for the next fiscal year.
The sponsor of the bill falsely contends that it is justified by the fact
that unions are subsidized by taxpayers. Union and professional membership
dues are considered employment expenses; it is the union member, doctor,
lawyer or professional who receives this benefit, not the organization to
which he or she belongs.
We estimate that this bill alone will generate a breathtaking number of
entries each year. This will impose a substantial cost on the government and
on labour organizations.
The important social role played by unions has been recognized on many
occasions, including by the Supreme Court of Canada. While the federal and
provincial governments and the Supreme Court of Canada have reinforced the
right of unions to function as legitimate organizations with the right to
participate in politics, Bill C-377 upsets the balance of power between the
Let us not be naive: the purpose of Bill C-377 is to give anti-union
organizations confidential information about the allocation of unions'
financial and human resources. There is not a single organization in Canada
— not a single publicly traded company, not a single charity registered with
CRA, not one of the estimated 100,000 not-for-profit organizations, with the
exception of labour organizations — that will be required to make
confidential detailed information publicly available in the way this bill
demands of unions. It is undeniable that this is a targeted attack on labour
The personal information of health plan beneficiaries will be published
by the Canada Revenue Agency on its website: their name, address, why they
are receiving the payment and amount received. This applies to any health
plan beneficiary receiving reimbursement for a costly prescription. It is an
outrageous invasion of an individual's privacy.
Paragraph 3(b) will also require labour organizations to provide to the
CRA details of payments to commercial suppliers. These details will be
publicly posted. Many of our contractors, service providers and commercial
companies operate in very competitive environments. This bill will give them
and their competitors an incredible amount of confidential contractual
The Canadian Constitution gives exclusive federal jurisdiction over
labour relations in specific industries. However, the 90 per cent of labour
and employment that is not subject to federal jurisdiction is governed by
the laws of the province or territory where the employment takes place.
Although Bill C-377 is intended to amend the Income Tax Act, it is a
back-door regulation of unions in provincial jurisdiction. Our comments are
supported by two distinguished constitutional experts, Mr. Henri Brun of
Quebec and Mr. Robin Elliot of British Columbia.
We value transparency and we act accordingly with our members. We are not
fools: we know that transparency is not the goal of Bill C-377. That is why
the CSN asserts that this bill restricts freedom of association, contravenes
federal and provincial privacy legislation, singles out and discriminates
against unions, will impose significant costs on government and labour
organizations, and intrudes into provincial jurisdiction.
We also submit that Bill C-377 is so flawed that it cannot be amended in
a way that addresses all the issues raised in this brief.
The Senate must vote down this unconstitutional bill. At the very least,
the Senate must recommend to the government that it refer it to the Supreme
Court to test the constitutional validity of Bill C-377; otherwise,
substantial costs will result from its administrative implementation while
its constitutionality is contested by labour organizations.
The Chair: Thank you, Mr. Patry.
We will now move to Mr. Mortimer, please.
John Mortimer, President, Canadian LabourWatch Association:
Honourable senators, thank you for the privilege of being of assistance to
your study. My objective today is to address incorrect statements about Bill
Two prominent union leaders — CAW's Ken Lewenza and CEP's Dave Cole —
wrote the following: "Most jurisdictions in Canada require annual financial
statements to be filed by all certified unions, where they can be inspected
by the public."
My fellow panellist today, Mr. Stanford, wrote about CAW financial
Annual audited statements must be filed with government labour
boards, both provincially and federally. Individual members can request
the statements from their local, from the national union, or (if they
are "frightened" by the big bad union bosses) directly from the labour
Yesterday Mr. Blakely testified:
Yes. You are entitled to it under the various provincial statutes . .
. . . when people go to the labour board, they get the disclosure
they want. The system works.
Respectfully, in my view, the essence of each of these statements is not
We have spoken with several labour board chairs to confirm that no labour
board or government body anywhere in Canada keeps labour organization
financial statements for public access.
I encourage you to review Appendix C of our submission to the House of
Commons Finance Committee last November, which I hope was provided to you
today by the clerk. It is an overview of all 14 tax jurisdictions based
across Canada. Yes, eight of fourteen tax jurisdictions enable actual union
members only to ask for a financial statement from their union only. None of
those eight tax jurisdictions entitles dues-paying non-members to any
information at all about their dues and the spending of the union.
These two groups of dues payers — actual union members and non-members,
unionized employees who have not become or remained union members — are a
distinct subset of whom Bill C-377 serves: the Canadian public.
Mr. Blakely also spoke about the topic of union membership yesterday. He
Our members are volunteers . . . 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
Overnight, a LabourWatch volunteer reviewed collective agreements related
to 13 of the 15 labour organizations of Mr. Blakely's Canadian executive
board of his American Federation of Labor - Congress of Industrial
Organizations' Canadian Building Trades department. It appears that all 13
of these collective agreements mandate membership.
For example, 7.1 of the boilermakers' collective agreement says that as a
condition of employment, all employees covered by that agreement shall
either be a member of, or will apply for membership in, the union and will
maintain such membership in good standing as a condition of employment.
These clauses directly contradict what I interpret Mr. Blakely to have
been trying to convey yesterday to the committee.
Yesterday there was also discussion about provincial opposition. Last
December 17, the media covered Ontario Labour Minister Jeffrey's letter to
all senators recommending that the bill "not be passed into law." She
wrote, in part: "This bill, as passed in third reading, has the potential to
drastically derail collective bargaining in Ontario."
On December 20, my column about Minister Jeffrey's letter in particular
and a similar letter from the PQ government in Quebec was published in the
National Post. Just prior to the 2007 provincial election, the Ontario
Liberal government changed election finance laws to allow for a truly unique
scheme of third-party advertising. Ontario law now allows third parties to
spend an unlimited amount of money on political attack advertising, while
registered political parties are constrained by strict spending limits. On
the other hand, third-party support for registered political parties is
risky, because that advertising could be added to a party's spending and put
the party over the legal spending limit.
Third-party advertising that supports or advocates for a party is now
essentially extinct in Ontario. The third-party attack ads are a growing
force. However, full disclosure of personal influence has never been
publicly disclosed, due to two key factors of this so-called disclosure law:
No third-party spending outside of the writ period need be disclosed.
Contributions made more than two months before the writ is dropped, or three
months after the election, need be disclosed.
One entity, the Working Families Coalition (Canada) Inc., has raised and
spent millions of dollars from a range of private and government-sector
unions and also tended to be very active Outside of the disclosure period.
Last election, two teachers' unions spent millions, one over $1.9 million
and the other over $2.6 million. Some teachers' unions also invested in the
aggressive attack advertising of the Working Families Coalition.
The Chair: Mr. Mortimer, you have two minutes to conclude, please.
Mr. Mortimer: Very good.
The teachers' campaign was widely considered to be against the
Conservatives and in favour of the Liberals. After the election, collective
bargaining broke down into one of the most significant disputes affecting
teachers, school administrators, and particularly parents and students, for
months, let alone the labour board.
No evidence has been presented to suggest that union financial disclosure
in numerous other countries has, in fact, impaired collective bargaining in
any way. The Ontario government's recent bargaining disaster has more to do
with union-backed politics that failed the heavily invested union leaders
and Ontario's real working families.
Question virtually everything labour leaders and critics are stating when
considering this bill and ensure that you have accurate information, such as
what I have provided here in this appendix, which directly contradicts some
of Canada's foremost and most prominent union leaders.
The Chair: Thank you, Mr. Mortimer.
Mr. Stanford, please.
Jim Stanford, Economist, Canadian Auto Workers: Thank you, chair
and members of the committee, for the opportunity to meet with you today. I
am an economist with the Canadian Auto Workers, which represents about
200,000 members in several sectors of the Canadian economy. Our union, for
your information, is presently engaged in a process of creating a new
Canadian union with our colleagues in the Communications, Energy and
Paperworkers Union. That will be founded this August at a founding
convention, and that new union will be even larger, with over 300,000
members in a broader scope of industries.
Just moments ago, actually, here in Toronto the new name of that
organization was announced publicly. We will be called Unifor Canada.
Please note that your committee will hear another presentation later in
your process from some colleagues of mine in the CAW Legal Services Plan,
which is a non-profit legal services provider funded through contributions
negotiated by CAW locals. That submission will deal with a very important
and specific administrative issue in the proposed bill regarding the
definition of "exempt union benefit plans." In contrast, my remarks today
will be broader on the substantive effects of the proposed legislation.
I am hoping that the clerk has distributed some notes that I sent to the
office, in English and in French, to the senators. I will run over those
notes in my allotted time.
The Chair: Mr. Stanford, could you hold for one moment? We want to
confirm. Yes, it has been circulated. Thank you very much.
Mr. Stanford: Thank you, senator.
I will now summarize our union's current practice of financial
accountability and transparency, and then I will make several points
regarding our concerns with the proposed measures of this bill.
Comprehensive audited financial statements for the national CAW are
prepared semi-annually under the leadership of our secretary treasurer and
distributed in print to all members of our national executive board and to
all of the CAW's over 300 local unions. They are made available at no cost
to any individual CAW member who requests them.
Local unions must also have their books audited by a chartered accountant
at least annually and file an audit report with the national secretary
treasurer of the union, and local union financial statements must be
reported to duly constituted local membership meetings.
In terms of compensation, the annual salaries of the three officers of
our union are determined by delegate vote at our triennial constitutional
convention and listed in our constitution at Article 12. The CAW president
earns $156,017.92; the secretary treasurer earns $143,906.19; and the Quebec
director earns $135,906.81. The salary of staff representatives, like me, is
also approved by delegates and specified in our constitution. The base
salary is currently $121,182.61. The constitution specifies these, and it is
posted on our website at the link indicated in the notes.
The proposed constitution for our new union will maintain these high
standards of reporting and accountability and will specify regular
independent audits; quarterly local financial reports; and mandated
disclosure of financial statements to national executives, council delegates
and all local unions. As well, financial statements will continue to be made
available to any member of our organization who requests them, at no cost.
Regarding the measures proposed in Bill C-377, I will quickly list the
concerns noted in my written submission.
First, the level of reporting detail is unique, discriminatory and
burdensome. No other sector in society — businesses, charities, governments
— is required to publicly disclose its financial affairs in such arbitrary
Second, this reporting will constitute a major administrative burden on
unions. For example, most of our local unions have voluntary financial
secretariats. The burden of fulfilling these reporting requirements will
constitute a substantial increase in the workload and cost of their duties.
It will also create a new administrative burden for government, potentially
exceeding $30 million per year, according to estimates from the Canadian
Labour Congress, for no obvious public policy purpose.
Fourth, the bill's requirement to separately list expenses related to
matters other than direct collective bargaining workplace representation is
unjustified. Unions consider engagement in those broader debates to be part
of our core function, and our right to do so was affirmed clearly by the
Supreme Court in the 1991 Lavigne case.
The requirement that we disclose every expense over $5,000, although the
businesses we negotiate with do not have to disclose anything, will create a
major and distorting asymmetry in information. Imagine us supporting some
workers who are trying to organize a union at a non-union company.
The Chair: Mr. Stanford, two minutes to conclude, please.
Mr. Stanford: Thank you.
We have to disclose every expense over $5,000, and that will be valuable
intelligence for the company to resist those efforts, but the company, in
turn, does not have to disclose anything.
Privately held companies that we deal with do not issue any public
financial data. Even publicly traded companies issue data, annual reports,
quarterly reports, and so on, as instructed by securities regulators, but
not through the tax system. If there were a genuine issue about union
members being unable to obtain information on their organizations, that
matter should be taken up by the Minister of Labour or by industrial
relations boards for appropriate legislative or regulatory remedy. This is
not a question that should be addressed through the tax system.
Indeed, there is no obvious or logical relationship between union
financial statements and the Canada Revenue Agency at all. Unions are not
subsidized by government. Unions do not receive preferential tax treatment
compared to other non-profit organizations. The fact that individual union
members can deduct the cost of their dues as an expense on their income tax
is not a subsidy of unions.
The Chair: Mr. Stanford, one minute to conclude, please.
Mr. Stanford: One minute; thank you.
What it does is recognize the principle that if you spend money to make
money, then you pay tax on the difference.
Union wages, on average, are $5 an hour higher than non-union workers.
That means that a full-time union member pays $3,000 more in taxes per year
than a non-union member. Far from being subsidized, we pay extra into the
system, and the recognition of union dues as an expense in that is
I am not an expert on the constitutional issues, but you have heard
several comments that it violates the Charter and the Constitution, and I
think those concerns have merit. This bill should be defeated by the Senate.
I thank you for your attention.
The Chair: Thank you, Mr. Stanford.
Finally, we have Mr. Lou Serafini, Jr., President and Chief Executive
Officer of Fengate Capital Management.
Perhaps, Mr. Serafini, you could start by indicating to the committee
what Fengate Capital Management is.
Lou Serafini, Jr., President and Chief Executive Officer, Fengate
Capital Management: Absolutely. Thank you very much for having me
present today. I am the president and chief executive officer of Fengate
Capital Management. We are headquartered in Toronto, Ontario.
Fengate is an asset management company specializing in directing
investments in the alternative asset space. These investments would include
infrastructure, roads, hospitals, courthouses, et cetera; renewable energy,
like wind and solar; real estate; and private equity investments. Our
clients include multi-employer pension plans, corporate plans, university
endowments, institutional investors and high-net-worth individuals. On an
aggregated basis, our clients' assets amount to approximately $50 billion,
of which Fengate Capital manages about $4.1 billion of this capital.
Our firm operates across Canada in select international markets. We have
been operating since 1974 and employ approximately 450 people.
We also pride ourselves on maintaining a high-level standard of
compliance and independent governance. We are also regulated by the
Financial Services Commission of Ontario with respect to compliance
requirements under the Pension Benefits Act and the Income Tax Act.
Today I would be pleased to express Fengate's concerns over Bill C-377.
First, and most important, our concern pertains to client privacy and
confidentiality. In its present form, the bill requires every labour
organization and labour trust to file a public information return. The
information that must be filed includes a set of statements for the fiscal
period setting out all transactions and disbursements over $5,000. The
purpose and description of the transaction must be disclosed, the specific
amount of the payment and who received it.
This disclosure and the publication of this information are problematic
for professional advisers. Fengate is not comfortable disclosing our fees,
given the competitive nature of our business and the importance price plays
in securing investments and clients. Furthermore, we consider the process of
our investment decisions as being proprietary information. Making it
publicly available would expose our underwriting processes to our
Lastly, these funds are already subject to significant public disclosure
under provincial pension legislation and under existing provisions of the
Income Tax Act.
Our second concern pertains to administrative costs. Federal and
provincial labour legislation already imposes obligations on labour unions
to publish or make available financial statements to their members. The
plain reading of the bill is that any transaction greater than $5,000 must
be disclosed. Investment managers like Fengate enter into thousands of
transactions per year. The disclosure required would be staggering, and
there would be significant compliance costs.
It is our view that the additional costs of this administration to meet
the bill's requirements would be pushed down to professional advisers like
Fengate, with no corresponding compensation. In an environment where pension
plans are struggling to maintain their funded liabilities, this would be an
onerous task that they would have to comply with.
In summary, the bill will create a burdensome obligation in the private
sector and potentially harm our competitive landscape.
The Chair: Thank you very much, Mr. Serafini.
I will go to my list of questioners, starting with the deputy chair of
the committee, Senator Hervieux-Payette, followed by Senator Black.
Senator Hervieux-Payette: Mr. Patry, do you feel public disclosure
regarding unions is of such importance to Canadians that they should know
about all union transactions, or do you feel accountable to your members
rather than to the Canadian public?
Based on that, all companies and all NGOs should also publish information
for transparency to be universal, not just in one sector?
Mr. Patry: That is the heart of the debate. We believe we are
accountable to those who pay union dues, the members of our unions.
As was mentioned in our brief, we do so. We even do a lot more than I
mentioned in my presentation. Every six months, we study the financial
statements. We have a finance surveillance committee. We have a comptroller
who verifies all expenditures. He can report to the appropriate bodies. We
feel we are open, and moreover, we do more than what is required because we
publish the CSN's financial statements on our website every six months. We
do not have a problem in terms of financial transparency.
However, what Bill C-377 requires is making extremely sensitive
information available to the general public. When it comes to disbursements
over $5,000, there could be breaches of privacy. I echo Mr. Serafini about
the fact that if we sign a contract with a lawyer, that could violate
solicitor-client privilege. A range of information would be available for
attacking labour organizations. Disclosing all disbursements over $5,000
during a recruitment campaign would give important information to
adversaries. We think that it is not in the public interest to go into that
level of detail in terms of information to be disclosed.
Senator Hervieux-Payette: Earlier, we were talking about three
sectors, NGOs, corporations, companies and unions. Union dues, professional
dues, whether you are a nurse, a doctor, an optician, we all have a
professional association to which we belong and pay annual dues to represent
our interests. In the case of doctors, I think it is mostly with
governments. In the case of lawyers, it is simply to protect their rights.
Given that, do you think that union dues and professional dues should be
Mr. Patry: Definitely, and that is where the bill is sorely
lacking. Since the tax exemptions that workers, not labour organizations,
receive are given as a reason, should workers disclose a range of
information even though it is not required for any other professional
association, charity and so on?
It is clear to us that the bill is an attack strictly on labour
organizations and that it interferes in labour relations between employers
and unions. We feel that this results in a power imbalance and, moreover, it
interferes in a matter that falls strictly under provincial legislation.
Senator Hervieux-Payette: Do you have the impression, regarding
professional dues versus union dues, that in the end the dues are used for
the same purposes, that is promoting the profession or the sector in which
you work? That can be as much for social contributions to good works as it
can be for advertising, lobbying and even promoting a certain political
direction, when it is the health care sector in Quebec. I have the
impression that sometimes we hear about the competition between private
medicine and public medicine. So people are still exposed to campaigns.
Do you think there is a parallel to draw between professional
associations and unions?
Mr. Patry: I think so. It is difficult for me to speak for other
associations, in particular professional associations. I come from the union
world. But everyone has their own very specific missions. Professional
associations have specific missions, professional corporations have other
types of missions, for example, protecting the public. Labour organizations
have a mission to defend the working conditions of the members they
represent. In the absence of evidence to the contrary, I think everyone
carries out the work based on the mandates given to them. As a general rule,
they are democratic organizations.
In the case of labour organizations, we are particularly democratic. We
take our mandates from our members and we are accountable to them. That is
what Bill C-377 disrupts.
Senator Black: Thank you to you all for being available and
helping us to wrestle with this very complicated problem. May I start with
you, Mr. Serafini? Thank you very much for your presentation.
You indicated your concern about client confidentiality with respect to
whether your professional disclosures and fees would be disclosed, and that
there could perhaps be a commercial penalty that your firm may face.
Would you be okay with the legislation if no names were disclosed and
just the aggregated amounts were disclosed? Do you understand what I am
asking you? Your firm name would not be disclosed, but there would be a
bundle that says "Professional fees, $5,001," or whatever the number is.
Mr. Serafini: Leaving aside the problem with administrative costs,
reporting on behalf of the clients, it would be easy to figure out which
clients we represent. For example, if we are building, financing, and
maintaining a hospital in Ontario, it is very clear who our clients are from
the public documentation.
These clients, be it a university pension plan or a multi-employer
pension plan, they would have signage on the site. Our competition knows who
our investors are. In disclosing this information, it would not be that
difficult to figure out what type of revenue proposition I would offer on
behalf of my clients.
When I look at our competition, it would be an unfair playing field. For
instance, bidding on infrastructure projects throughout Canada is a
competitive landscape, and I would say the majority of the competition comes
from international companies. If it is providing equity capital on behalf of
Canadian investors, it is likely we would be competing with equity capital
from Australia, the U.K., or equity contractors bidding on these projects
from Spain, Germany, et cetera.
Therefore, for us, removing the names still will not provide enough
comfort that our competition could not figure that out.
Senator Black: I accept that. I am interested in that, but I
accept that that would be your view. Thank you very much for that.
I need some help from Mr. Mortimer and Mr. Stanford, please.
From the tenor of your comments, I gather that you are not in favour of
the legislation. Is that a fair guess?
Mr. Mortimer: I am in favour of the legislation; Mr. Stanford is
Senator Black: If it was proposed that we needed to make some
amendments to this, can you help us understand what amendments might make
this palatable, from your points of view?
Mr. Mortimer: I would say there may have been things that weakened
it in the amending process in the house, but the art of politics is the art
of compromise, and that was the wisdom of the committee in the house in
terms of everything that went on.
Senator Black: So you are 100 per cent okay?
Mr. Mortimer: Yes.
Senator Black: Mr. Stanford?
Mr. Stanford: Senator, I am opposed to the thrust and the
motivation of the bill. I do not believe that it serves a public policy
purpose. If, in fact, there was a concern about union members having timely
access to union financial statements, I do not believe there is a concern in
that regard. If there was, the tax legislation is not the way to solve that
If the federal government thinks that is an issue in the federal labour
sector, then the legislation or regulations could instruct the Canada
Industrial Relations Board, or a comparable agency, to improve or strengthen
its own rules regarding financial statements from unions, by filing them,
perhaps, with the government or making them available to union members, or
to others, if that was the policy.
I do not accept the idea that unions should be regulated through the tax
system. The only rationale for that seems to be the fact that union members
can deduct their dues for income tax purposes. That also applies to any
other tax- deductible expense, and that same rationale should apply to every
other provider of a service that is tax-deductible, including investment
advisers, banks, companies and so on. There is no legitimate rationale for
this legislation tying union financial statements through the Canada Revenue
Senator Massicotte: Thank you for being with us this morning. Mr.
Patry, to clearly understand your point of view and the comments you have
made, you think that an argument for information available to the public
should perhaps be a benchmark, which is information to the public by
Are you making comparisons with private corporations or public
corporations on the stock market?
Mr. Patry: Both. In the case, for example, of companies on the
stock exchange, I know there are a certain number of obligations in terms of
disclosing information set by financial market authorities in the different
provinces. But when we look at the details of what is required in terms of
sensitive information in Bill C-377, and what is required from
publicly-traded companies, there is no comparison. It is completely out of
proportion with what is required of other companies.
Senator Massicotte: I completely agree, but we are trying to say
if there is a flaw in the bill, is there an amendment we can make? In your
opinion, would there be a benchmark in regards to more reasonable
Mr. Patry: I want to be clear. We believe there is another, more
fundamental problem, which is that we consider the bill to be
unconstitutional because it interferes in labour relations matters.
The Canadian Bar Association, the Quebec Bar, Mr. Barré, Mr. Elliot and
Mr. Henri Brun have already mentioned it. Ms. Stoddart has expressed
concerns about impacts on privacy. It seems to me that there are already
enough problems with this bill for it not to be passed and for a request to
be made to the Supreme Court to rule on the constitutionality of this bill.
If that is not done and the bill is implemented, there will be significant
costs for the government and for labour organizations for a bill that will
in any case be challenged. Let us go down that road and then see.
Senator Massicotte: Mr. Mortimer stated that in several provinces,
the disclosure of financial statements is not mandatory and is only
available on request. I am not talking about your union. What is your
reaction? Is that appropriate or not?
Mr. Patry: What we are most familiar with is the Quebec Labour
Code and the Professional Syndicates Act of Quebec. We are also familiar
with the Canada Labour Code. There are obligations within them. I know there
are as well in many provinces, but not all. They are matters that belong to
the provinces. Mr. Mortimer raised matters that belong to the provinces and
election laws. We are not discussing what expenditures are eligible in an
In Quebec, these matters are very well governed. They are matters for
which the provinces are responsible, which deserve to be debated but not at
the federal government.
Senator Massicotte: Mr. Mortimer, I will play devil's advocate
with all of you in order to try to understand the issue. The argument could
be made that the union members at this point are not asking for change. They
seem to be quite satisfied with the information they are getting, at least
the large, significant number of union members are not asking for change,
and they seem to be happy with the information they are getting.
In fact, for many organizations — Mr. Patry represents one — the
information they share is much beyond the legislative requirement. There
seems to be a reasonable, democratic process of electing the people. Many of
them have a body that actually supervises the financial side.
If one were to say it looks like there is no problem to be corrected, why
go beyond that? What is the argument to say we must go beyond that?
Mr. Mortimer: There are two themes to it. The bill looks well
beyond disclosure to the people who pay the dues.
Senator Fraser: Why?
Mr. Mortimer: As I listen to the remarks of the sponsoring member
of Parliament and the other people who have spoken in the house in favour of
the bill, it is looking at the entire efficacy of the Canadian tax system.
Unions are entirely unique in this country.
Senator Massicotte: Explain that.
Mr. Mortimer: No one has the ability to compel money or take away
your job. No one has to join the Canadian Federation of Independent Business
in order to open and operate a small business in Canada. No one has to join
the political party that is in power in a given province, but the union that
has the rights in your workplace, you join, you pay, or you do not work
Certainly, where membership is rarely voluntary — and it is in some
workplaces — if you do not pay the dues, you lose your job. It is a
completely different power to compel money and to spend money. I have a
letter here from an individual at the CAW in British Columbia who says the
financial statements were not handed out to members. Instead, the statements
were read out loud by a trustee. Financial statements were incomplete and
inaccurate. I was told the statements were improved by the five local
trustees in the CAW national union. I filed a complaint with the Institute
of Chartered Accounts of British Columbia.
The Chair: We will have to table that.
Senator Massicotte: There are always many people who are not happy
with a certain process. Are you saying that the reason you think the
information should be public is because unions can force membership into the
organization? Is that your principal argument?
Mr. Mortimer: It is the ability to compel tax-deductible union
dues as a condition of employment, to be a tax- exempt organization, no
matter where the revenue comes from, and to be able to spend that in any
sphere of our society.
Senator Massicotte: There is reasonably good governance there.
They seem to be happy with the governance. Like a board or corporation, if
they are happy with the governing structure, they get elected, and they seem
to be satisfied with the governance, and their members are happy. Where is
Mr. Mortimer: I will go back to Senator John F. Kennedy and the
AFL president, George Meany, who championed union financial disclosure in
the 1950s. As President of the United States of America, he oversaw its
implementation, and they felt that that was going to make the entire set of
The Chair: Let him complete. The witness is speaking, please.
Excuse me. The witness is speaking; he has the floor.
Mr. Mortimer: I said Senator Kennedy, when he implemented it.
Senator Greene: I think we should have more respect for the
witnesses that we have here.
The Chair: Thank you, gentlemen.
Senator Segal: I would like to ask Dr. Stanford a question. It
relates, Dr. Stanford, to item 5 in your thoughtful presentation. It talks
essentially about an asymmetry that might impact upon a negotiation, say,
between the CAW and one of the car companies or the CAW and one of the other
airlines, whose employees your organization so effectively represents.
As I understand it, many of the companies — for example, car companies —
that operate in Canada are wholly owned subsidiaries of a publicly traded
company in the United States, and so that as a CBCA company in Canada, their
disclosure requirements are not the same as what the public company's
disclosure requirements would be. Even if they did have similar disclosure
requirements, no company is forced, under SCC and other regulations, to
indicate all of the expenditures of $5,000 or more. That would be an
Having been involved in many negotiations advising the CAW side on the
economics of the issues at hand, what do you think could happen, in a
worst-case scenario, if the information about how unions were spending their
money on consultants, advisers, data sets, et cetera, was public domain, and
the other side's was not, and the list of contractors and the rest was
public domain, the other side's was not? What do you think that would do to
impact, if it would at all, a substantive labour negotiation between CAW and
any of its major employers?
Mr. Stanford: That is a very important question. You are right
that we do negotiate with many privately held corporations. Not just small
businesses, of course, but the Canadian subsidiaries of international firms
themselves are privately held corporations, and hence are not required to
issue any financial statements publicly, including to the union. On the
basis of a good working relationship, we often receive that information
confidentially, but not always. It is certainly not available as a right.
Then my colleague from Quebec pointed out earlier that even a publicly
traded company issues aggregate financial statements similar to the
aggregate financial statements that we provide to our members on request,
but not in any kind of proportionate detail as is required of unions under
You know that negotiations are a matter of strategy and planning and
trying to position yourself in order to get the best deal that you can for
your members. On the company's side, they try to get the best deal they can
for their shareholders.
The disclosure requirements, being so asymmetric and detailed, would
require us to report on the source of things we spend money on. That could
include our organizational preparedness, the sort of training that we are
undertaking, the membership education, educating our stewards, et cetera.
There would be financial details on that activity. It would include details
on our research activity. You have mentioned consultants. That would signal
to the companies quite clearly what direction we were headed in, what type
of issues we were likely to be confronting or raising with the company. It
would give them very valuable intelligence on our positioning. That would
undermine our bargaining position.
In addition, some of the consultants we might approach for that type of
work would be reluctant to do the work for us if they knew that both their
name and the amount that they were paid was public. Generally, we get that
type of information on a confidential basis.
The Chair: Thank you, Mr. Stanford. I believe Mr. Mortimer would
like to comment on your question, Senator Segal.
Senator Segal: I do not think I asked Mr. Mortimer a question.
The Chair: I did not think you did, but he would like to respond
and comment on it.
Mr. Mortimer: One of the important points of clarification on Mr.
Stanford's remarks, Senator Segal, would be the amendments passed by the
House of Commons in December. They took all of the reporting requirements in
the bill related to labour relations activity, such as the collective
bargaining that CAW would do, and rolled them into one aggregate number.
There was no breakout of all the consultants that Mr. Stanford referred to.
That would be my read of the as-passed legislation before this committee.
Senator Segal: I appreciate the clarification. We had quite a
debate around this table in the early days of discussion where the separate
list of contractors and suppliers would still have to be addressed
independent of the labour relations aggregate. For better or worse that is
the interpretation we were given.
Senator Ringuette: My first question is to Mr. Mortimer. Mr.
Mortimer, are you a non-profit organization?
Mr. Mortimer: Yes, we are.
Senator Ringuette: You do not pay any federal or provincial tax?
Mr. Mortimer: Correct.
Senator Ringuette: I looked at your website, and you have quite a
list of member law firms that you seek advice from. Have you sought advice
from any of them regarding the constitutionality and the privacy of this
bill? If so, could you table that advice that you received from the
extensive list of advisers that you put on your website?
Mr. Mortimer: We have not sought legal advice on this bill from
any of our content advisers.
Senator Ringuette: Mr. Stanford and Mr. Patry, of course, as soon
as we started our hearings, it was clear that the first issue was
constitutionality, which you have both raised.
The second issue was certainly that of detailed private information. Last
week, we heard from constitutional experts and I asked them if it was
possible to amend this bill to make it constitutional. And the answer the
experts gave us was no. I would like to have your position on this subject.
Yesterday, I asked the Privacy Commissioner if this bill passes the test
of protecting Canadians' privacy and her answer was no.
Those are certainly two priority points we have to examine when we study
In your opinion, is there an amendment that is possible? Mr. Patry, you
said to refer this question before spending millions and millions and
millions of Canadian tax dollars, and I think that is pretty accurate;
should you not ask for this to be referred? Unfortunately, the Senate has
not got the capacity to refer. It has to be the Government of Canada. What
can we do?
Mr. Patry: I do not know all the powers of the Senate. We are well
aware that it was not in the Senate's power to send the matter to the
Supreme Court, but the Senate could certainly ask the government to do so.
Your question raises a lot of concerns. When constitutional experts tell
us that the bill is unconstitutional, that pretty much concerns the basis of
the Canadian Federation, and furthermore, in terms of value, when the
Privacy Commissioner is concerned about the impacts of a bill on people's
privacy, as a Canadian, I am very concerned.
I think we provided the committee with the opinion we received from Mr.
Henri Brun, but we would also be happy to provide you with Mr. Robin
Elliot's opinion if that helps you in your work.
Senator Ringuette: Thank you.
Senator Moore: Mr. Mortimer, you passed out an Appendix C. I
thought you said that persons who pay dues to a union should be entitled to
see the financial information of another union. Did you say that?
Mr. Mortimer: No. I was just clarifying that the legislation
narrowly limits disclosure to actual members only. There is no disclosure to
a dues payer under any jurisdiction of Canada where they are not an actual
member of the union, if you read each of the statutes across the country.
The members themselves in these laws are only entitled to the information
of their union, not any other. Finally, there is no public disclosure.
Senator Moore: That makes sense. If I am a member of a club, I do
not expect I can get information from another club. Unions are owned by
their members. I do not understand your thinking there.
I want to take it a bit further. Corporations belong to organizations
such as the Canadian Federation of Independent Business. Following your line
of thinking, do you think that one member of CFIB who pays dues, and they
get tax breaks for that, do you think they should be entitled to the
confidential financial information of other members of CFIB?
Mr. Mortimer: Today, a union member is not entitled to —
Senator Moore: We are talking about companies here. Just answer my
question. I am a member of CFIB; you are a member; we each have separate
companies; we pay our dues; we get a tax break for that. Do you think I
should be entitled to see your confidential information?
Mr. Mortimer: In the same way that I do not think one union member
is entitled to the financial information of a fellow union member on the
assembly line with them. I agree with them.
Senator Moore: I am not sure that I understood your answer. I
think you agree with me that you should not assume to be entitled to the
information of another member in an organization like CFIB.
Mr. Mortimer: Should CAW be a member of the Canadian Labour
Congress, the CAW member is not entitled to any information about the
Canadian Labour Congress' financial affairs by virtue of being a member of
the CAW, because as a worker they are not a member of the Canadian Labour
Congress. The union is the member of the CLC. There is no financial
disclosure of any joint trade council, federation of labour, or the Canadian
Labour Congress at all for anyone in the country.
Senator Moore: Mr. Patry, do you want to answer that? Mr. Stanford
may want to comment on that.
The Chair: Our time has expired for round one. We do have another
panel, so quickly, please.
Mr. Patry: The question is most appropriate because this shows
that there is discriminatory treatment of labour organizations in Bill
C-377. No other associations are being targeted, including employer
associations of whom nothing is being required, whereas labour organizations
would be required to disclose highly sensitive information about their
members and their providers.
The Chair: Thank you, Mr. Patry. Is there any other comment from
our other witness?
Hearing none, that concludes round one. We have concluded our time, but I
have two questions for round two.
Senator Massicotte: Mr. Mortimer, when the proponent of this
particular bill, C-377, appeared before us, on the record, he made it very
clear that his interests — in fact he thought the legislation was worded
such that this additional information would only relate to non-union
activities of the unions, such as political activities and other things.
Would you agree with that intent? He was surprised that that was not the
case. Therefore, this may go far beyond what he expected. How would you
respond to his objective? Maybe it should be amended to reflect what he
thought the law was going to say.
The Chair: Mr. Mortimer, could we have a quick answer, please?
Mr. Mortimer: I think a line has been drawn between collective
bargaining activities and non-collective bargaining activities. I would say
that that distinction is consistent with what Justice Rand wrote in the Rand
formula in 1946. It is consistent with what the Supreme Court has said in
Canada and the European Court of Human Rights.
Senator Massicotte: Which means what?
Mr. Mortimer: There is an intellectual distinction that has been
made in the way the house amended the bill, between bargaining and
non-bargaining activities, and the financial reporting is accordingly
different to the two of them in the wisdom of the house.
The Chair: To our panel today, thank you. On behalf of all the
members of the committee, we greatly appreciate your appearance here today.
In this, the third hour of our deliberations this morning, we are pleased
to welcome Michel Mailhot, 6th Vice President, Fédération
interprofessionnelle de la santé du Québec; Anne Sutherland Boal, Chief
Operating Officer, Canadian Nurses Association; Nancy MacCready-Williams,
Chief Executive Officer, Doctors Nova Scotia; and Matthew Maruca, General
Counsel, Doctors Manitoba. Joining us by video conference, as an individual,
is Francis Donovan. Mr. Donovan, we appreciate your appearance today.
We will open with comments by Mr. Mailhot, please. I want to emphasize to
members of the committee that this meeting must terminate at 1:30, as the
Senate will be sitting at that time.
Michel Mailhot, 6th Vice-President, Fédération interprofessionnelle de
la santé du Québec: Good morning. I would like to thank the Senate
committee members for providing me with the opportunity as Vice-President of
the Executive Committee of the FIQ to present our position on Bill C-377.
The FIQ represents 62,000 health care professionals — nurses, nursing
assistants, respiratory therapists and perfusionists — in 60 unions, working
in 152 health institutions in Quebec.
The federation's sectors and services encourage members to be active in
their unions. They have made their federation an organization that advocates
for the demands, choices and rights of health professionals. They also play
a public outreach role for their members, which means that they have a role
to play not only in the workplace but also with the public at large.
In terms of democratic structures, there is a convention, attended by
more than 650 delegates from health care facilities and representing nursing
and cardio-respiratory professionals; there is a federal council made up of
500 delegates and a federal executive committee made up of nine members
elected at the convention, including a nursing vice-chair, an assistant
nursing vice-chair, and a respiratory therapist vice-chair, in order to
reflect the main types of employment within our organization.
As an agent of social change and in keeping with its statement of
principles and general orientations, the FIQ condemns government choices
that undermine workers' and the public's rights, hence our appearance before
the Standing Senate Committee on Banking, Trade and Commerce to discuss Bill
The Chair: I am sorry, Mr. Mailhot. I have to ask you to slow down
a little. Our translators cannot keep up with you.
Mr. Mailhot: Thank you. Sorry.
The Chair: There is no text.
Mr. Mailhot: No doubt it will come as no surprise to hear that we
are strongly opposed to Bill C-377 which has no reason to exist.
You have had the opportunity to hear our colleagues from various labour
organizations this morning. Allow me to state that we fully support the
remarks of Mr. Richard Perron, President of the Syndicat des professionnels
du gouvernement du Québec.
Allow me to provide some background. In December 2011, the federal
conservative member of Parliament from British Columbia, Russ Hiebert,
tabled a bill in the House of Commons, and its purpose was to amend sections
149 and 234 of the Income Tax Act. He said:
... to require that labour organizations provide financial
information to the Minister for public disclosure.
On February 6, 2012, the same member said:
Labour organizations play a valuable role in Canadian society,
representing and defending the rights of workers.
That is the only opinion given by Mr. Hiebert that has a basis in fact
and in law.
I could quote other members who have questioned the usefulness and
validity of the bill, but their comments are already included in our
Currently, all FIQ members are able to find out exactly how their union
dues are being used, and audited financial statements are available to
members and are circulated at our various federal board meetings.
In the Senate, on May 7, 2013, the honourable Senator Cordy put a very
relevant question to Senator Ringuette, that fully reflects our concerns:
The sponsor of the bill has stated that he had not received any
complaints from any union members that they were unable to gain access
to information from their union leadership. When the honourable senator
was doing research on this bill, did she find an overabundance of
complaints from people who were not able to get information from unions,
or does she believe this is just an anti-union bill?
We think the answer is obvious. You should know that we have received no
complaints about this from our members, on the contrary, we make it our duty
to be transparent in our communications and to disclose all financial
information to our 62,000 members.
Let us look at what Senator Ringuette replied:
Honourable senators, my research indicates that in the last 18
months, I believe, there were a total of six complaints.
Senator Cordy replied:
I read the same information .... If I am not mistaken, those six
complaints were [all] dealt with.
The FIQ is of the opinion that Bill C-377 does not address any urgent
issues nor any problems that threaten the Government of Canada.
From a legal standpoint, and based on the various Supreme Court rulings
in Oil Chemical (1963) SCR 584 and 1988 1SCR 749, as well as the 1939
Privy Council decision in the Attorney General case, Bill C-377 is invalid
because its purpose does not focus on federal income tax but rather workers'
associations, which fall under provincial jurisdiction in civil law.
Labour law is under provincial jurisdiction and therefore the federal
government has no right to legislate in that area.
For all these reasons, we call upon the Standing Senate Committee on
Banking, Trade and Commerce to reject Bill C-377 or, alternatively, to amend
it systematically to apply only to the tax aspects, and restrict its
application to employees and groups associated with them, for example, the
Fraser Institute, Merit Canada, and the Canadian Federation of Independent
Nancy MacCready-Williams, Chief Executive Officer, Doctors Nova
Scotia: Thank you to members of this Senate committee for the
opportunity to speak with you this afternoon. My name is Nancy
MacCready-Williams and I am CEO of Doctors Nova Scotia. We are here to talk
to about what we believe are the unintended implications of legislation that
we believe is not clear.
We believe that the definitions in Bill C-377 are very broad, and
therefore we are very concerned that our organization and other medical
associations across the country may inadvertently be caught within the ambit
of the bill.
Who is Doctors Nova Scotia? We are a professional association of over
3,500 members in Nova Scotia, created by statute. There are six objectives
in our founding legislation, which are the promotion of health and the
prevention of disease; the improvement of medical service, however rendered;
the maintenance of the integrity and honour of the medical profession; the
performance of such other lawful things; the promotion of harmony and the
unity of purpose between the medical profession and various bodies assuming
responsibility for the care of sick or injured persons; and to represent and
act on behalf of the profession and enter into agreements on behalf of
We have six objectives, and one of those is to enter into agreements with
government. We are concerned that the definition of "labour relations
activities" is so broad as to capture what we would consider to be just a
piece of what we do into this ambit of this legislation.
For example, we work collaboratively with government to determine the
fees for the care that physicians provide to Nova Scotia. Is that labour
relations activities? We work with the universities, the medical school, the
teaching hospitals to determine what portions of physicians' time will be
spent on research, on teaching, on delivering clinical service. Is that
engaging in labour relations activities? We are very concerned that the
definition of labour relations activity is so broad as to potentially
capture those very aspects that are but one of a number of purposes we have
in our legislation.
Doctors Nova Scotia is not a trade union. We do not represent employees.
Physicians are independent contractors in our province. We have no competing
organization. We are not certified as a bargaining agent, nor are we subject
to trade union legislation. We are a single organization created by statute
that requires us, in addition to entering into agreements, to focus on
working collaboratively with partners and with government to help shape the
health care system for Nova Scotians. Does that bring us within the
definition of labour relations activity? We are not sure. It is that
ambiguity that we seek to eliminate.
Does that kind of activity that I just shared with you make us a labour
society? Again, we are not sure. We do not believe so, but we think that the
legislation is sufficiently ambiguous that it needs to be clarified.
What are the consequences of being caught by this particular piece of
legislation? What we do know is that the onerous requirements in terms of
financial reporting will require us as a small organization to completely
overhaul our financial reporting systems to capture data that we simply do
not have access to right now, and, I think most important, it would require
us to reallocate resources from our health care improvement initiatives to
financial reporting initiatives.
To what end and for what purpose? We believe we are very transparent as a
medical association to our members and to the general public. We have our
financial statements independently audited every year. They are on our
website; this is open to the public. We produce an annual report. We are
very transparent and accountable.
The Chair: You have one minute to wrap up, please.
Ms. MacCready-Williams: Thank you. What I would like to take you
to now is the solution. We believe there are two simple steps that can be
taken to eliminate the uncertainty and bring clarity — not to change the
substance of the bill, but, rather, for greater certainty, to bring clarity.
There are two suggestions that we would submit that are on page 9 of our
brief that require changing the definition of both "labour organization"
and "labour relations activities." What we would suggest instead of the "labour organization" definition that you have right now in the bill is to
adopt the definition of "labour organization" in the Canada Labour Code.
Add the words "and includes any organization whose members are labour
organizations" at the end of that definition and then you have great
clarity around who is in and who is out of this legislation.
The second suggestion we would make is the insertion of four words in the
definition of "labour relations activities." Those four words are "of a
labour organization." The definition would read: "Labour relations
activities means activities of a labour organization associated with . . ."
Those two amendments to the definitions we believe would bring clarity to
what was intended with the particular piece of legislation and will confirm
that Doctors Nova Scotia and other medical associations are not labour
societies and, therefore, are not caught by this particular piece of
The Chair: Thank you, Ms. MacCready-Williams. I will go to Ms.
Anne Sutherland Boal, Chief Operating Officer, Canadian Nurses
Association: Good afternoon. The Canadian Nurses Association appreciates
the opportunity to speak to this pending legislation.
Our association is a not-for-profit organization, and as a national
professional organization we represent nearly 150,000 registered nurses, the
largest group of health care providers in Canada.
I am joined today by Arlene Wortsman of the Canadian Federation of Nurses
Unions. CNA invited CFNU to join us today because more than half of this
country's registered nurses are union members and stand to be affected by
CNA believes that Bill C-377 duplicates existing reporting requirements,
requires the disclosure of personal and confidential information, and is
potentially unfair in its application.
As a professional association, our primary concern is being accountable
and transparent to our members. Maintaining this means rigorous internal
reporting and external reporting directly to Industry Canada and the Canada
Revenue Agency. If enhanced transparency and accountability mechanisms are
the goal, then they should be built into the existing legislation for the
Government of Canada's not-for-profit corporations. With significant
monitoring, compliance, reporting and cost-implications for affected
organizations and government, Bill C-377 is not the answer.
Finally, we share the concerns of others regarding this legislation's
impact on the privacy of Canadians.
At this time, I invite Ms. Wortsman to speak.
The Chair: I believe you have a two-minute statement. That is all
the time we are allocated for opening.
Arlene Wortsman, Executive Director, Canadian Federation of Nurses
Unions: My name is Arlene Wortsman. I am Executive Director of the
Canadian Federation of Nurses Unions. The president, Linda Silas, was unable
to attend today and sends regrets.
I would like to thank the CNA for graciously sharing their time with us
in presenting to you today.
The Canadian Federation of Nurses Unions is a federated union with eight
provincial nurses' unions affiliates and an associate member, the Canadian
Nursing Students' Association. We represent approximately 200,000 nurses and
student nurses. Our members work in hospitals, long-term facilities,
community health care and private homes, and 85 per cent of nurses in Canada
belong to a union.
Nurses' unions provide a voice for nurses in the workplace, promote the
highest standards of health care for patients, work to improve wages,
benefits and working conditions and act on resolutions passed by union
members at annual and biannual meetings.
As you have already heard, there is already a substantial regulatory and
accountability framework for labour organizations in Canada. The CFNU and
each of its member organizations are accountable directly to members for
their actions and spending. Nurses directly control how union finances are
spent through established, long-standing, transparent democratic processes.
Close to 10,000 nurses are elected from the general membership annually
to represent members in decision making and to provide oversight of union
finances and activities.
Nurses' unions disclose audited financial statements regularly to their
elected boards of directors, to all union locals and to delegates at
meetings. The statements are made available to all members via the Web,
through meetings or upon request. Individual members can request the
statements from their local, provincial or national union.
The Canada Labour Code already requires trade unions and employer
organizations to provide members with copies of the financial statements of
their affairs in sufficient detail to disclose accurately the financial
condition and operations of the trade union or employee organization.
Similar language requiring disclosure exists in provincial legislation.
However, Bill C-377 is solely concerned with applying new requirements to
one part of the equation. There does appear to be a certain lack of fairness
The nurses unions request the committee to recommend against passing the
bill for the following reasons. Bill C-377 is trying to solve a problem that
does not exist, as unions are transparent to their members and members have
access to financial statements. The bill goes further than generally
accepted accounting principles, creating onerous red tape reporting that
will not apply to similar organizations. It far exceeds long-standing
federal and provincial statutory measures, which provide for transparency
regarding the expenditures and activities of unions and accountability to
their members and the public; and it ignores labour organizations'
democratic legacy, which has resulted in strong internal union regulation.
This regulation comes by way of union members' resolutions. Unions have
constitutions and bylaws that already provide for the high level of
accountability and transparency union members have demanded.
The CFNU has been in existence for over 40 years and has never had a
problem to date. We believe this bill creates a dangerous precedent when
using the Income Tax Act to help the federal government intrude in the
affairs of independent democratic organizations.
I would urge you to vote against the bill.
The Chair: Mr. Maruca, do you have a brief statement that you
would like to make?
Matthew Maruca, General Counsel, Doctors Manitoba: Good afternoon.
We are the voluntary professional association for all medical doctors within
the province of Manitoba.
We would like to make three points: First, the application of this bill
is too broad; second, the reporting requirements of this bill are too
onerous; and, third, we have significant privacy concerns with respect to
Doctors Manitoba supports and administers numerous programs on behalf of
its physicians for the benefit of those physicians and members of the
public. We have a staff of 16 employees, and we are very mindful of how we
use our members' dues.
Given the broad definition of "labour organization" within this bill,
small professional associations like ours may be required to provide
significant and detailed financial information about our operations. This
will cause us undue financial hardship due to additional administrative,
staff, legal, accounting and financial advisory services. This will mean
that we will either have to cut programs or increase dues to our members.
Not only would the requirements be costly as a result of the difficulty
in compartmentalizing and tracking, but a detailed list of all transactions
with a cumulative value of over $5,000 would be extremely time-consuming. In
addition, detailing each of those transactions may force us to disclose
personal health, financial or otherwise private information about our
members to the public, putting us in the awkward position of complying with
this legislation by virtue of having to violate other legislation.
If the bill should pass, we suggest that the reporting requirements be
amended to align with most provincial labour legislation that requires
simply disclosure of a financial statement. If a financial statement is
sufficient for most provincial governments and, more important, sufficient
for those members who directly fund our operations, certainly it would be
sufficient for the public and this bill.
Subject to any questions you may have, that concludes my submissions.
The Chair: Thank you very much. Now joining us as an individual
from Vancouver, we welcome Francis Donovan. Please proceed.
Francis Donovan, as an individual: Thank you very much for this
I am a butcher for Canada Safeway and have been with them for 23 years. I
am here to contradict the claims of labour leaders, the NDP, the Liberals
and others who oppose this bill whose claims and games I have experienced
for years and am still experiencing with my union. I ask the Liberal and
Conservative senators to demonstrate their belief in effective transparency
by voting Bill C-377 into law.
Yesterday, I arranged to email a French and English summary of the legal
war my union waged with my money and the money of taxpaying Canadians to
keep their financial activities hidden.
The UFCW local would not give financial statements as required by law
when we asked orally in 2007, so we asked in writing. We were told
statements could only be viewed if we made individual appointments at our
union's office and only if we signed a non-disclosure protocol. We sent
letters asking about this protocol and appointment procedures. Once again,
we were ignored.
With a petition signed by about 50 of us, we applied to the B.C. Labour
Relations Board, our only option. The union asked for an extension after
their long-time legal counsel resigned.
Eventually, the union lost. The board ordered them to provide financial
statements. The union appealed, but lost.
Next, the union demanded we sign non-disclosure protocols to view our
statements. We took the union back to the board. Did they comply with the
board's orders? No.
We went to the B.C. Supreme Court. The union lost again. Of course, the
union appealed again and lost again.
We had to win three labour board and two court rulings to see what should
have been given to us almost three years earlier.
Next, the union claimed it did not have audited financial statements from
2001 to 2006 as required by law. In five legal proceedings, they never
disclosed that fact. Eventually, we got all six years of statements, but all
with the same preparation date. We do not know why. Did they really have no
internal controls and statements, or did they need to restate them before we
Also, in spite of the ruling that the union could not require
non-disclosure protocols, they gave us threatening letters with protocols
attached when we went to get the statements. I have these financials with me
today, but I doubt the accuracy of them. I will not share them with you for
fear that the union might discipline me, expel me from membership and
require Safeway to fire me.
Our laws allow the union to do this. Many of the 50 who signed the
petition are scared. Only a handful of us stood in the open for the legal
Honourable senators, I hope you can find it in you to see that the UFCW
obstructed us, intimidated us and misled us. Their actions were immoral and
Canadian Labour Congress President Mr. Ken Georgetti spoke to the house
committee about our case and about how few issues like ours are on the
record. Union leaders use statistics to claim the system is working. It is
not working. I believe our case proves why many never ask.
Mr. Georgetti and other union leaders misled you, the labour board and
the courts. They say things about cases like ours and about union disclosure
overall in Canada that are simply not true. This is a prime example of the
evil this bill seeks to fix.
The second and more telling travesty of justice is what was found in
these financial statements. For example, an ever increasing $11 million
education fund for a union training centre, subsidized by the Canadian
taxpayers, that no union member knew about. There have also been several
questionable real estate transactions funded by tax deductible union dues
that I must pay or be fired.
Transparency and openness can only be a good thing unless you are a union
with something to hide.
Our elected democratic institutions are in place for the citizens of our
country. We feel the level of transparency that Bill C-377 offers to the
public will increase its confidence in their unions as well as protect the
rights of dues-paying members.
Online statements mandated by government means not going through what we
went through. This remarkably long, difficult and expensive process for
union members to rightfully access their union's financial statements was
very intimidating and almost too much to bear. The intent of the Labour
Relations Code is to avert such activities and to make the unions
transparent and financially accountable to their memberships. I am expecting
you to help all Canadians create union leadership accountability. Certainly,
membership has the right to know how their union dues are being used.
Thank you for your time, and I look forward to your questions.
The Chair: Thank you, Mr. Donovan. I will start our list of
questioners with Senator Black, followed by the deputy chair.
Senator Black: Thank you very much. Mr. Mailhot, you suggested at
the end of your comments that perhaps there was a way to amend this bill to
make it a fiscal bill only. Could you elaborate on that?
Mr. Mailhot: Our main concern is in terms of the large volume of
information that we will have to disclose. We saw earlier the size of the
document that we will have to comply with. If, as an organization, we have
to disclose all that information and —
The Chair: Could I ask you to speak more slowly, Mr. Mailhot, so
our translator can keep up?
Senator Black: I ask you to focus on the question, which is how
you would amend this bill from your point of view to make it a fiscal bill
only. I want your opinion on that.
Mr. Mailhot: I am not treasurer of the organization. I am here as
a spokesperson. I apologize. I do not think I have that expertise. I do have
someone with me who could help me. Could I call upon him to assist me?
The Chair: Could you kindly identify yourself, sir?
Michel Canuel, Lawyer, Union Advisor, Legal Team, FIQ Montréal: I
am very pleased to speak with you, Senator Black. You heard Mr. Patry's
comment about an amendment to something which is unconstitutional or invalid
being difficult to mention, and that it would be difficult to make
amendments if something is unconstitutional or invalid in and of itself.
Of course, the scope of the act is quite broad. When you are talking
about amendments, you are talking about imposing limits. That may be
stricter because it covers just about everything. All of Quebec's
federations, the federations of specialists and general practitioners, would
be covered by the definition provided in the act, a definition which is
neither very specific nor very clear. This is what is meant by an amendment.
I have been working in labour law for over 25 years. I have appeared
before the Supreme Court as "control data" and in different decisions and
I do not consider myself an expert in constitutional law. I work with
experts like Professor Hogg, and Brown NBT in terms of English law.
Obviously, I am somewhat surprised by Mr. Yahya, who does not seem to be
an expert in constitutional law. It is just like doctors. There are
neurosurgeons, orthopedists, but I would not present myself as an expert in
constitutional law like Professors Brun and Barré as well as Mr. Elliott
from British Columbia, a leading authority. I was taught by Professor
Ouellet from the University of Montreal. Those are leading authorities,
experts in constitutional law. In my opinion, his statements to you this
morning have no basis in law.
Senator Black: I want to commend the constructiveness of the other
panellists. I found it very helpful because in life it is so easy to
criticize, but we appreciated saying, "Listen, what about doing this?" I
wanted to commend that; I very much appreciated it.
To our friend in Vancouver, I also want to say you are to be commended
for your courage.
The Chair: The deputy chair of the committee, Senator
Hervieux-Payette, to be followed by Senator Tkachuk.
Senator Hervieux-Payette: Welcome to all of you. My question is
addressed to Mr. Mailhot and Ms. MacCready- Williams. Does one pay union
dues and professional dues?
To my knowledge, a lawyer working for the Quebec government will pay both
union dues and dues as a member of the Bar. Most of your members work in the
public sector, which is to say hospitals, CLSCs and private clinics. Your
professionals work both in the public sector and the private sector. Some
are unionized whereas others are not.
Are some of these workers being discriminated against? You must be
familiar with the debate in Quebec about the private-public sector, and the
fact that private sector people have nothing to disclose whereas public
sector people have to put everything on the table for Canada's general
public to see.
Have I correctly understood your members' circumstances?
Ms. MacCready-Williams, you talked about ambiguity. However, do you not
think when are you negotiating that it is a labour relations kind of issue?
I assume you are the association negotiating on behalf of the doctors with
the health authority in your province. How would you negotiate if you were
not representing your members? They may not be ordinary members. They might
be professional members, but in a way, they are in a situation of having to
sign a contract with the other party who is going to pay the bills of the
doctors. Why would you exclude yourself?
Ms. MacCready-Williams: Physicians are not employees, so it is not
a labour relations environment. As part of our mandate, we are the voice of
the physician community in Nova Scotia, and we negotiate with the
government. The government is not the employer. The government is the
paymaster, and physicians are independent contractors who deliver care to
Nova Scotians. It is not an employer-employee relationship. It is not a
labour relations situation at all. I think it is quite distinct from a
situation where there is an employer-employee relationship. This is not a
labour relations context. Again, we do negotiate, but it is just a piece of
what we do. However, we are not a trade union, we are not governed by that
legislation, and we are not a certified bargaining agency.
Senator Hervieux-Payette: Do you not deal with doctors who are
working as salaried people?
Ms. MacCready-Williams: No, they are not.
Senator Hervieux-Payette: Do you not have salaried doctors in your
Ms. MacCready-Williams: There are a few, but they are excluded.
The medical officers of health who would be salaried physicians are excluded
from our legislation. We represent those who are essentially independent
Mr. Mailhot: To come back to your initial question, you are
correct in saying that as a respiratory therapist, all members of the
federation pay union dues to their local chapter and pay professional dues
to their professional order, whether that be the Order of Nurses, the Order
of Practical Nurses, or the Order of Respiratory Therapists. Things have not
been decided in the case of perfusionists, because there are few of them.
Senator Hervieux-Payette: Are both deductible?
Mr. Mailhot: Yes. I deduct both in my income tax statement. We
represent very few private sector members and when we do so, in the case of
the FIQ, they are private institutions working for the government on
contract. Therefore, the wages paid by those institutions are governed by
collective agreements. Those workers earn the same wages as public service
However, you mentioned the possible difference between the private health
care system and the public system. In Quebec, we have a unique situation;
there are private employment agencies which hire nurses, practical nurses
and respiratory therapists and provide them to institutions. They are
governed by working conditions different from ours. Their employers are not
required to disclose the content of their negotiations because they
negotiate those conditions with the health agency, generally speaking,
sometimes with the institutions themselves, but often with the regional
health agencies. They negotiate their working conditions, and these
organizations or companies have absolutely no requirement to disclose their
financial statements; and yet, they meet with representatives of the
institution, negotiate contracts and lobby these people in order to sell
their own products, and there are many of them in Quebec.
Senator Tkachuk: Mr. Mailhot, you had mentioned, as a number of
witnesses did yesterday, a constitutional question that revolves around
whether it is provincial or federal legislation. If there was provincial
legislation that had the same goals as this particular bill has, would you
Mr. Mailhot: Unless I am mistaken, and if so Michel can correct
me, the Quebec Labour Code already imposes upon our members the disclosure
of a great deal of information. Independently of the fact that the Labour
Code exists or not, as an organization and like most union organizations — I
do understand there may be certain exceptions, since there are people in all
areas who do not follow the rules — we take great care to disclose
As an example, our board will meet next week in Rimouski, where we will
present the 2012 financial statements to our members. The entire financial
report will be tabled. After that meeting, the 500 people who attended will
leave with their packages and present the documents to their own
institution. Each presentation of the organization's financial statements
will be accompanied by comments, and answers to questions for all of the
Senator Tkachuk: What I am trying to get at is that we have heard
these excuses before by people who are against the bill. You know, this is a
provincial matter; the federal government should not be imposing; this is an
unconstitutional bill. What I am trying to get at is the essence of the
bill. Would you be in favour of this bill? I want to know whether you are
actually opposed to the bill or not opposed to the bill. So if it was in the
province, if it was passed by a provincial legislature, would you be in
favour of this bill or would you be opposed to this bill?
Mr. Mailhot: We would still be opposed to this bill.
Senator Tkachuk: So the crux of the matter is that you do not like
the bill whether it was provincial or federal?
Mr. Mailhot: There are two things: we are opposed to this bill and
it is our opinion that this bill concerns matters under provincial
Senator Tkachuk: I understand, but there is similar legislation in
Australia, New Zealand, Germany, France, Ireland, the United Kingdom, the
United States. Labour unions function quite well in those countries and are
successful advocates for their members in the workplace. Why would Canada be
an exception to that? Why would we not be as transparent as all these other
Mr. Mailhot: We do not believe this legislation will bring greater
transparency to what we already do as a unionized organization, and, based
on what we heard here and what you have previously heard, to what other
union organizations are doing in Canada.
As far as what is going on elsewhere in the world, not being a
constitutional expert either in Canada or any other country, I am unable to
respond to that portion of your question.
Senator Tkachuk: Mr. Donovan, that was quite a story you told us.
When you were going through this process, were there other people across the
country in similar situations that belonged to labour unions that were
calling you and wishing you success in this matter because they were having
the same difficulty in their particular labour union?
Mr. Donovan: No, I am afraid not, but I have to admit that I do
not even own a computer so it would be hard to get hold of me.
Senator Tkachuk: That is fine, Mr. Donovan. Thank you very much.
Senator Massicotte: Thank you all for being here today. Your
contribution to the discussion is most useful.
Mr. Mailhot, some union members are more transparent and more inclined to
disclose information, as in your case. The problem is that that may not be
the case for everyone, as there may be others who are less transparent than
In Quebec, financial statements are only disclosed upon request. You are
doing something different. Is there a problem in Quebec or Canadian society
with that minimum requirement? Even among senators, 90 per cent of all
senators do not know how to read a financial statement. They are based on
accounting principles, which are not always very clear. Do we not need more
than a minimum, not necessarily for your union, but for unions in general?
Mr. Mailhot: My answer will be quite simple. In our speech, we
said that there are very few complaints made in Canada, with regard to
labour organizations and the ability to obtain information. If there were a
problem, it would need to be fixed, but since the members own their
organization and control it, if the members do not raise the issue, there is
no issue needing to be resolved, so ultimately, we believe that there is no
need for a bill to fix a problem that does not exist.
Senator Massicotte: But what is your reaction to Mr. Donovan's
Mr. Mailhot: I think that gentleman is doing noteworthy work.
Perhaps he speaks as quickly as I do, because my translator had difficulty
translating everything, and I did not manage to hear everything. I
understand that he experienced difficulties with his labour organization,
difficulties that are ongoing. He has taken steps.
However, we are talking about very few cases. Do we need to change the
regulations or take such a significant step each time there are one, two or
more unique situations? We do not believe so.
Senator Ringuette: Maybe Mr. Donovan, a comment. I certainly
appreciate your experience and the steps that you have taken with regard to
your situation with your union. The B.C. Labour Relations Board was
certainly the first instance, and maybe if there is some issue that needs to
be clarified, that would be the appropriate legislative body.
I would like to also reiterate the fact that in regard to the national
labour legislation mentioned before for France, Germany, the U.S.A. and the
U.K., they also have a balanced approach because all of these pieces of
legislation, just like our different provincial pieces of legislation, have
a balanced approach. Whatever is required of a labour organization is also
required of an employer organization in the system because fairness is
fairness. I want to make it clear that that is the situation in regard to
France, Germany, the U.S. and the U.K.
Ms. MacCready-Williams, I certainly share your concern in regard to the
definition. The police association was in front of us. Although they are not
a certified union, they come under this definition because they have the
purpose of labour relations, just like in the recent Supreme Court of Canada
decision in regard to the RCMP employee association. They are not a
certified union organization, but under this bill they are a labour
I am looking at the two possible amendments that you have suggested. The
only thing I can say is that I will certainly look into it and try to see if
we can put an amendment forward to ease your concern, although I think that
you have to recognize that the Liberals in the Senate are a minority and we
are somewhat limited.
Ms. MacCready-Williams: Thank you, senator.
Senator Ringuette: I have a question for Mr. Mailhot.
Mr. Mailhot, you clearly gave a sufficient answer to Senator Tkachuk's
question regarding provincial legislation, but, based on your experience,
should Quebec law contain greater restrictions?
Obviously, a number of us agree that the bill does not fall under federal
jurisdiction. Do you have any recommendations with regard to how to improve
provincial legislation in Quebec?
Mr. Mailhot: We believe that the current Quebec laws are
sufficient. To our knowledge, there are no situations that have been
reported that would require amending current legislation.
I regret repeating what I have already said, but the members get the
information they request each and every time they want it. I am speaking of
our organization, but I have had the same experience to some extent
elsewhere as well. So no.
Senator Ringuette: In the entire country, there are approximately
25,000 union groups comprising between eight and nine million Canadian
workers. There may be exceptions, as we see in the case with Mr. Donovan.
Mr. Mailhot: If I had any recommendation to make, it would be to
say that members should be required to take part in their meetings and
gatherings. This might be the best guarantee of quality, respect for the
organization's rules, respect for budget forecasts and expenditures. It is
up to the members to ask their organization questions. The members hold the
power in their organization.
Senator Ringuette: Ms. MacCready-Williams, yesterday we had the
Privacy Commissioner in front of us. I asked her about this piece of
legislation with respect to her responsibility to make sure that the private
life of Canadians is secure. I do not recall that you had a reference in
regard to the privacy issue with this bill. Do you have issues with privacy?
Ms. MacCready-Williams: Yes, senator, we do have concerns in terms
of the privacy issue. For example, there are aspects in agreements that
grant some of our members parental benefits or maternity benefits as a
benefit that flows through the funding from the government. This would
require making that public. I think our members would be concerned about
that level of personal information being shared; that is, a physician having
a child, is that relevant? My colleague is very interested in this
particular privacy issue. Would you like to comment on that?
Mr. Maruca: To complement what Ms. MacCready-Williams is saying,
we fund the maternity and parental leave program directly from our funds.
Transactions over $5,000 would be included in this bill. If a new parent
received those benefits, we would have to disclose that information under
this bill, and the public would then know that that new parent is in that
situation. Our members would certainly object to their private information
being disclosed publicly. That extends to financial information, other
personal information about their medical practices or about their medical
histories, or any other aspect of their life that is personal and private to
them. We have innumerable pieces of privacy legislation in place to protect
people's privacy, and this bill will stomp on all of that.
Senator Ringuette: Can we have a comment in regard to this issue
for the nurses?
Ms. Sutherland Boal: We have the same privacy concerns. Nurses are
ethically required to ensure patient confidentiality. Disclosures required
related to health benefits and disability payments risk violation of patient
privacy. We are concerned that there would be the ability to track names and
benefits that had been distributed beyond $5,000. We have those same
The Chair: Thank you very much. That concludes our questions.
To our panel, we would like to express our great appreciation for your
appearance today. You have been very helpful.