Proceedings of the Standing Senate Committee on
Legal and Constitutional Affairs
Issue 30 - Evidence - May 7, 2015
OTTAWA, Thursday, May 7, 2015
The Standing Senate Committee on Legal and Constitutional Affairs, 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 Bob Runciman (Chair) in the chair.
[English]
The Chair: I want to advise all of our witnesses that we have a full agenda today. I'm going to remind you of the five-minute limit on opening statements. If you go beyond that, I may have to call you to order. I want to encourage senators and witnesses to be as brief as possible with questions and responses. That would be helpful in terms of getting through this significant agenda.
Welcome, colleagues, invited guests and members of the general public who are following today's proceedings of the Standing Senate Committee on Legal and Constitutional Affairs.
We are continuing our deliberations on Bill C-377, An Act to amend the Income Tax Act (requirements for labour organizations). It was originally introduced in the House of Commons in December 2011 by Mr. Russ Hiebert, Member of Parliament for South Surrey—White Rock—Cloverdale in British Columbia. The bill was reinstated by the house at the start of the current session and this is our third meeting on the bill.
As a reminder to those watching, these committee hearings are open to the public and also available via webcast on the parl.gc.ca website. You can find more information on the schedule of witnesses on the same website under "Senate Committees.''
I mentioned that we have a number of witnesses to hear from, either in person or appearing via video conference. For our first panel, please welcome Bruce Ryder, Professor, Osgoode Hall Law School, by video conference — and Professor Ryder may have to leave early; Tom Stamatakis, President, Canadian Police Association, also by video conference, from Edmonton; Jerry Dias, National President, Unifor; and John Mortimer, President, Canadian LabourWatch Association.
We will begin with Professor Ryder.
Bruce Ryder, Professor, Osgoode Hall Law School, as an individual: Thank you very much, Senator Runciman. It's a pleasure to have the opportunity to join the committee on your deliberations on Bill C-377.
I'm a professor at Osgoode Hall Law School. My area of expertise is constitutional law, including the division of legislative powers in the Constitution Act, 1867. It's the issues related to the constitutional validity under the division of powers that I'll focus my comments on today.
I've filed a brief with the committee that goes into my views in greater detail. Since I have just five minutes this morning, let me cut straight to the chase.
On the constitutional issues related to the division of legislative powers, there are two key issues that senators need to engage with. The first relates to the pith and substance doctrine, and I've set out the key questions related to it on page 3 of my brief. The issue is whether Bill C-377 and its dominant characteristic is, in relation to labour organizations, a matter that falls within exclusive provincial jurisdiction and therefore is it ultra vires or is it, in relation to income tax, a matter that falls within Parliament's jurisdiction pursuant to section 91(3) of the Constitution Act, 1867?
My answer is it's quite clear that the law in pith and substance is in relation to promoting transparency and accountability for labour organizations, a matter that simply does not fall within Parliament's jurisdiction and is therefore ultra vires.
The second key question, because that's not the end of story, relates to the ancillary powers doctrine. I set out that key question on the top of page 6 of my brief, namely, do the financial disclosure provisions proposed by Bill C-377 play an important and substantial role in furthering the objectives of the Income Tax Act? Are they rationally and functionally connected to the objectives of the Income Tax Act in the sense that they advance its current provisions?
My answer to that is, again, it's quite clear that the bill does not have a connection to existing provisions of the Income Tax Act, does not have a close connection to its objectives and, therefore, will be declared to be of no force and effect by the courts.
I set out the reasons for these two conclusions in some detail in my brief. On the pith and substance issue, I rely primarily on what the law does, what it says it does, what its legal effects and purposes are, how the promoter of the bill, Mr. Hiebert, has described its purpose, and how the debates in Parliament unfolded. They've all focused on promoting transparency and accountability for labour organizations. That's its dominant characteristic, its pith and substance. There has been little discussion of the tax implications of the bill, and I would submit that it does not have any tax implications in the sense that it's unconnected to existing provisions of the Income Tax Act. That's the basis for my conclusion on pith and substance.
On the ancillary powers doctrine, whether there is a strong enough connection to the existing provisions of the Income Tax Act, I set out in my brief, at page 6 and on to page 7, why it is that that connection does not exist. The bill does not address the tax status of labour organizations or the tax consequences of the activities of or membership in labour organizations. It does not make any connections to the existing tax treatment of labour organizations, activities or to union dues. The disclosure obligations in the act are enforced through fines, not through the imposition of tax liability or the removal of an income tax deduction or some other income tax benefits.
It's really important to point out the significant differences between the way the law, the Income Tax Act, exempts labour organizations and the way it exempts charitable organizations and athletic associations. The latter two kinds of organizations are defined in a detailed way that imports conditions into their registration as tax exempt organizations and their continuing existence as tax exempt organizations. Nothing similar exists for labour organizations.
Bill C-377 doesn't make any proposal to tie the disclosure obligations to the existing tax treatment of labour organizations. That's why, at the end of the day, I'm quite confident that the courts will conclude that the law is in pith and substance not in relation to income tax but is in relation to labour organizations, which fall within exclusive provincial jurisdiction.
Thank you very much.
The Chair: Professor, well timed. We will now go to Mr. Stamatakis.
Tom Stamatakis, President, Canadian Police Association: Mr. Chair and honourable senators, thank you very much for the invitation to appear here this morning regarding Bill C-377 as you continue your study on the proposed legislation.
This is not my first time appearing before you, but for those who may not be familiar with the Canadian Police Association, it is the national voice for almost 60,000 police personnel across Canada. Membership includes sworn and civilian personnel serving in 160 police services across the country, from Canada's smallest towns and villages to our largest police forces, including some members of the RCMP, the CP Railway Police and First Nations police services.
I should also note that I am a police officer in the city of Vancouver. I'm seconded from the police department to the Vancouver Police Union as its president; I'm also the President of the British Columbia Police Association, which is an association of all the municipal police unions in the province of British Columbia; and I am the President of the Canadian Police Association. I'm seconded to these positions while I'm elected in the capacity of president. If I were no longer in that capacity, I would go back to my policing career in Vancouver.
With the exception of our RCMP colleagues, each and every one of those sworn and civilian members that I represent is also a member of a union, which is why Bill C-377 is a serious concern to our members and to front-line police personnel in this country.
I should also note that an important Supreme Court of Canada decision from earlier this year has mandated that our colleagues within the RCMP should also enjoy the rights to associate and collectively bargain, so the outcome of this debate could have a significant Impact on them in the near future.
Before getting into the details around my concerns, I should note that while police associations serve as bargaining units, represent members during grievance processes and provide additional legal protections for members when necessary, among our many roles, we're quite different from most of our organized labour colleagues. We have no formal political affiliations with any of the national parties, and we're proud of our work with all parliamentarians when it comes to pursuing the ultimate goal of safer communities for Canadians and for our members.
With respect to Bill C-377, I can't help but note that this proposed legislation seems like a solution in search of a non-existent problem, and a costly solution at that. While I have no doubt that supporters of this bill can dig up examples of union officials misappropriating their own members' funds, the simple fact is that the Criminal Code already addresses those circumstances within a number of provisions. Fortunately, those instances are exceedingly rare in the broader context.
As much as I hate to raise the issue, I suppose I could draw a parallel between this bill and the recently abolished long gun registry, which is why I am often quite surprised when I hear that Conservative parliamentarians are pushing for Bill C-377. As police officers, we were told that the gun registry was expensive to set up, expensive to maintain and was of little value since criminals would not be the ones to register their firearms. Bill C-377 will create a registry that will be expensive to set up — according to the Canada Revenue Agency, it costs many millions of dollars — be expensive to maintain and would likely be of little value since people committing fraud are unlikely to report on their own criminal behaviour.
I have spent years working with my local association, the Vancouver Police Union; with my provincial association, the British Columbia Police Association; and with our national organization, the CPA. I can assure you that the overwhelming number of union executives are honest and hard-working people who put their own policing careers on hold in order to work for the benefit of their members, often balancing both their policing duties and their obligations as elected union officials.
Suggesting that onerous legislation is required to stop an extremely small minority from committing criminal acts is almost ridiculous, in my view. In fact, as some of you may know, earlier this year we saw allegations made against some of our colleagues with the Ontario Provincial Police Association in regard to the finances of their association. While there is an ongoing investigation, it would be inappropriate for me to comment on the specifics of this case, whether here in my statement or in questions you might have for me. I should note that this is a real world example of how the current system works.
I would also like to take this opportunity to touch on the members of our associations, since the sponsors of this legislation often like to suggest that they are proposing these measures on their behalf. I have attended hundreds of annual general meetings of police unions across the country, and each and every one of those unions' financial statements are open to the members and detailed explanations of each were offered. Often the results of third party audits were provided to ensure that members' money was spent effectively and in the members' interests.
I have been grilled by members and have seen it happen on a number of occasions to other presidents and financial committees. Our books are always open to our members. The idea that they would need an ineffective registry to protect them from their own association is absurd, in particular when you consider that the vast majority of the members I represent are trained police investigators who are very capable of asking appropriate or probing questions on those matters they are concerned about.
Another area of concern for our association regarding the proposed legislation —
The Chair: Mr. Stamatakis, please wrap up. You have exceeded the five minutes. Please come to a conclusion.
Mr. Stamatakis: Let me conclude by saying that we are concerned obviously about privacy. The other significant concern is most of our elected union officials in the Canadian Police Association are also police officers. When they complete their service with their local association, they return back to a policing career. The concern, of course, is that if names and addresses and other personal information become public, there is no way of predicting how many of the people engaged in criminal activity or criminal organizations could use that information, which would jeopardize —
The Chair: I am sorry. I said at the outset that I'll try to keep you on time here. We have a full agenda.
Mr. Dias.
Jerry Dias, National President, Unifor: Good morning. I am Jerry Dias, and I'm the National President of Unifor. I would suggest one of the reasons that they put into place this legislation is because of the love of the labour movement with, I would suggest, some people in the federal government.
We're concerned about Bill C-377. It is a blatantly anti-union piece of legislation that exists for no other reason than to harass and weaken unions across Canada. The bill unfairly targets unions. It is an attempt to remedy a problem that lives only in the imagination of its proponent, Mr. Hiebert.
We are not delivering a detailed brief about the legal and other issues with Bill 377. Others have done an excellent job of that. Rather than repeat what other critics have said, our comments will focus on the ways in which this bill is discriminatory against trade unions and the impact that this bill would have on the ability of trade unions to represent their members.
In a recent analysis of Bill 377, Professor David Doorey of York University, who the Supreme Court of Canada has quoted twice this year, hit the nail on the head when he challenged the proponents of the bill to admit what the bill is really about. Here is what he said:
It's easy enough to demonstrate that Bill C-377 is a ridiculous, partisan, waste of taxpayer money designed simply to punish, disadvantage, and hopefully silence unions, a political thorn in the Conservative's side. Just ask a Conservative supporter of the Bill why tax policy should require unions to disclose far more information about their activities and employees than any other organization, including charities, corporations, churches, and dues collecting professional associations. They have no answer, because there can't be one beyond "we really dislike unions''.
That's what is behind this bill. It is based only on an attitude that sees unions as somehow illegitimate or untrustworthy.
Accountability of trade unions: So we need to look at the alleged purpose of the bill. In his appearance, Mr. Hiebert focused on the need for accountability, but I ask, accountability to whom? Accountability to trade union members? Trade unions already operate in an open and transparent manner.
The Chair: Could you please slow down a little bit?
Mr. Dias: I've got five minutes; I've got ten minutes worth of comments.
The Chair: The interpreters are having a challenge.
Mr. Dias: All right.
Trade unions already operate in an open and transparent manner. They are accountable to their members. For example, Unifor's constitution requires locals to undergo periodic audits and to make those results available to their members. Further, trade unions are democratic institutions. Members are able to vote for their union leaders and therefore have the option to not re-elect leaders that they feel do not adequately serve their needs.
Accountability to the general public: Mr. Hiebert suggested unions should be held accountable to the general public because they don't pay tax or somehow receive tax benefits. Let's make this very clear: Unions pay all taxes required of them, including municipal taxes, sale taxes, et cetera. Unions are like other non-profit organizations. They have no profits and therefore do not pay income tax. Only individual members and their families qualify for tax deduction for the dues they pay. This is no different from the many other kinds of employment expenses and business expenses that are tax deductible. But Bill C-377 only attacks unions.
There have been many comparisons made to the disclosure required of charities. As pointed out by a number of witnesses before this committee, the disclosure requirements of unions under this bill far exceed those required of charities. This supports the conclusion that this bill is really about harassing and undermining the effectiveness of trade unions. This is confirmed when the impact of the disclosure requirements on trade unions is examined.
First is the cost of compliance. Each of Unifor's 755 local unions would have to track their expenditures in order to report transactions that exceed $5,000. Our local unions will essentially have to duplicate the audit function that is done now by local union trustees or outside auditors at a cost of, we estimate, between $5,000 to $25,000 per year for each local. That means for our local unions, and Unifor is just one union, the annual compliance cost would be $3 million to $4 million or more. That does not include Unifor's costs at the national level. That means that unions will have to spend a significant amount of money and resources that might otherwise be used to provide better representation to their members, including countering the anti-union lobbyists who stand to benefit from this bill.
Second, the bill will harm the ability of unions to exercise the rights to collectively bargain. Employers will gain access to information that can be used to undermine a union's position during negotiations.
Conclusion: What becomes clear when a closer look is taken at the alleged rationale behind this bill and the impact it will have on unions is that Bill C-377 is motivated by a dislike of unions. Unions are being singled out and targeted by a piece of legislation that could have no purpose other than to harm the trade union movement and undercut the ability of Canadian citizens to enjoy the advantage of union representation.
For all these reasons, in addition to the many put forward by other witnesses, we urge you to reject this piece of legislation.
The Chair: Thank you.
Mr. Mortimer.
John Mortimer, President, Canadian LabourWatch Association: Honourable senators, the objectives of our submission are as follows: first, to address incorrect statements by labour leaders and critics of Bill C-377.
Two prominent former union presidents, Ken Lewenza and Dave Coles, co-wrote:
Most jurisdictions in Canada require annual financial statements . . . be filed . . . by unions, where they can be inspected by the public.
Unifor's Mr. Stanford wrote:
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 boards.
Respectfully, these statements are 100 per cent false. No labour board or any government body anywhere in Canada keeps any labour organization financial statements on file for the Canadian public, let alone for unionized employee access. I encourage you to review Appendix C of our submission which summarizes, in just one page, all 14 Canadian tax jurisdictions, 9 of which enable actual union members only to ask for financial statements, but for their union only, not from the provincial and national levels above them and certainly not from the Canadian Labour Congress. None of those 9 entitles any dues-paying non-members to any information at all about how their dues are used.
When CLC President Hassan Yussuff, appeared before you, he stated:
The labour board can confirm that every request for disclosure has been fulfilled.
It appears that he did not review the ditch that his predecessor, Ken Georgetti, drove himself into before a house committee by also claiming that no Canada Labour Congress member union had disclosure issues. Appendix B in our submission contains accurate facts about just some of the cases from my home province that underscore how hard CLC member unions have fought against union members' statute right to simple high-level financial statements, including the CAW in its day, now Unifor.
Whether or not members have very limited disclosure is a red herring when it comes to enabling Canadians to access the full extent or the lack of efficacy of the current tax situation, therefore our second objective. A key section of the Income Tax Act addresses when union dues are not deductible. Based on case law and CRA bulletins, it is clear that a significant percentage of dues levied by unions do not qualify for deduction on a tax preferred basis. This is a serious federal tax issue, and this is not a provincial labour code issue.
This bill's specific and detailed line item schedules and its $5,000 threshold are critical to putting an end to what is going on. If the current act was effectively enforced, unionized Canadians would pay less in dues and government tax expenditures would be reduced.
Section 8(5)(c) of the Income Tax Act states:
. . . dues are not deductible . . . to the extent . . . levied
(c) for any . . . purpose not directly related to the ordinary operating expenses of the . . . union. . . .
Our submission quotes from CRA documents and Federal Tax Court case law, where the carefully constructed Income Tax Act has been consistently interpreted. Even the limited knowledge we have today about the broad range of expenses and use of time for which union dues are levied suggests that hundreds of millions of dollars in union dues are deducted and tax revenues foregone when they should not be. The public policy problem: No one appears to have the information with which to ensure that the Income Tax Act is properly applied on behalf of Canadian taxpayers. If unionized Canadians even know this, it is not in their interest to surface labour organization expenses that don't meet the act's requirements because their taxes might go up if their unions did not stop spending forced union dues on non-Income-Tax-Act-qualifying purposes.
Similarly, tax exempt labour organizations that levy dues for non-qualifying purposes have no interest in advising the government, let alone the people who have to pay them, of non-qualifying items. For example, the Canadian Labour Congress is not a union. It represents no employees with employers. Something has to be done to ensure that union dues for deductible versus non-deductible purposes become a part of labour organization accounting and are separated out of the T4 slips of Canadians who must pay dues or be fired. All Canadian taxpayers, including the unionized ones, deserve better than the status quo.
Thank you.
The Chair: Thank you.
We will begin questions with Senator Ringuette.
Senator Ringuette: My first question is to Mr. Mortimer. In the late fall, November, there was a serious breach of information at the Canada Revenue Agency that the CBC received. It was the confidential tax information of hundreds of Canadians who donated items to art galleries, museums, et cetera, and got a tax credit. In response to that, the Minister of National Revenue decried the leak in the House of Commons as extremely serious and that it was completely unacceptable to have private information go out publicly. Further, she said:
. . . our government understands that Canadians expect their information to be protected, and we take action on that every day.
Why should the information of hard-working Canadians not be protected in respect of their privacy? People donating art and artifacts to galleries and museums are probably not in the lowest income bracket. For this government, why is it not okay to have that private information disclosed? Where are the two-tiered measures in respect of disclosure?
Mr. Mortimer: Currently, the information that this bill would disclose would be considered confidential if it was in the possession of the government when it was released. It is up to Parliament to decide what information is treated as confidential under the Income Tax Act — that's clear in the current wording of the act — and what information the government collects that it chooses to make public. That's Parliament's decision, and this proposed legislation is merely representative of those types of decisions that are made.
It's no different from the privacy argument that some people make. The federal privacy legislation, senator, expressly allows any other statutorily required information by the federal government and any provincial government to be released. Those provisions don't apply as that's the way the act is structured. Yet so many people, including lawyers, come before you and tell you otherwise when, once again, it's another example of a blatant falsehood being put out by the critics of this proposed legislation.
Senator Ringuette: I'm sorry, but I didn't get an answer.
Mr. Ryder, I'll go to my question on your presentation concerning the non-connection with labour organizations. The proponent of this bill says it's the same as charities. The CRA can remove a charity's status. but in terms of labour relations and union accreditation, the CRA cannot remove accreditation of a union. It's clear that it's not within the jurisdiction of the federal government or the CRA.
Mr. Ryder: That's clearly my view as well, Senator Ringuette. I try to spell out in my brief, on page 7, why that's the case and to point out that there are three significant differences between the tax exempt status of labour organizations and that of charitable organizations and athletic associations that have been frequently mentioned in the debates on Bill C-377. For charitable organizations and athletic organizations to be entitled to tax exempt status, they need to be registered; and to be registered they have to meet a detailed definition of what qualifies as a charity or a Canadian amateur athletic association for tax purposes. There are a number of conditions in the definition. For example, they have to devote all their resources to charitable purposes or to have amateur athletic purposes. As you mentioned, the minister has the power both to deny registration and to revoke registration if they are not complying with the requirements of the act.
None of those features exists for labour organizations. There is no requirement for registration, no definition of what a labour organization is, except for the one that will be added by Bill C-377, which doesn't contain conditions but is, in fact, remarkably expansive; and there is no power of revocation. No tax consequences follow for breach of the disclosure set out in Bill C-377. That's why I argue in my brief that the analogy to the tax treatment of charitable organizations and athletic associations, and the disclosure requirements placed on them, is completely specious once you pay attention to the detailed provisions of the Income Tax Act that are relevant.
Senator Ringuette: One more question —
The Chair: Sorry, no.
Senator Dagenais.
[Translation]
Senator Dagenais: My first question is for Mr. Ryder. How do you reconcile what you said in your presentation with the legal opinion of former Justice Bastarache, according to which the law as it stands is constitutional and does not hinder union activities at all, aside from the fact that they will have to be more transparent?
[English]
Mr. Ryder: Thank you, Senator Dagenais. Clearly there's a disagreement between me and other constitutional scholars, who have expressed the same opinion as I have, and former Justice Bastarache. I would sum it up that Justice Bastarache and Mr. Hiebert believe it is sufficient to bring Bill C-377 within Parliament's jurisdiction to make laws in relation to taxation because labour organizations receive public benefits in the form of tax exempt status and the deductibility of union dues. It's sufficient to require extensive financial disclosure simply because they receive public benefits. That's enough to bring it within the taxation realm of Parliament.
Frankly, I think that's a weak connection to income tax law. If that were the case, we could have massive disclosure requirements for just about every institution in the country because there are so many that receive some form of a significant tax benefit.
In my view, and I think it's the view of the other constitutional scholars who have provided briefs during this bill's journey through Parliament, there needs to be a closer connection to the tax treatment of labour organizations or the tax consequences of transactions involving labour organizations for this to be a valid exercise of Parliament's taxation power.
[Translation]
Senator Dagenais: When you have two lawyers in the same room, you can get two different opinions. Thank you for your answer.
My next question is for Mr. Stamatakis, whom I have known for years. What do you say to Ken Pereira, who appeared before this committee last week, who has provided information to the police and who supports this bill as a step towards breaking the code of silence that allows unions to do what we saw at the Charbonneau commission and — I know you do not want to talk about it — the Ontario Provincial Police Association?
[English]
Mr. Stamatakis: I think I would just go back to my remarks in my opening statement. There are already many provisions in the Criminal Code that deal with individuals who choose to engage in practices that are clearly unlawful and not in the interests of their members. I'm not sure that targeting unions the way that has been described before you in other testimony and in the way that's being done here serves anyone's interests, including the very union members that some people are suggesting this legislation is intended to protect.
Senator Jaffer: Mr. Ryder, I found your presentation to be interesting in the sense that, if I understood it, you would separate policy if it's a policy decision, if the federal government wants to deal with that. You also said that it really doesn't come under the purview of the Income Tax Act.
I would like you to expand on your argument on pith and substance. Exactly why do you think this bill does not meet the test of pith and substance?
Mr. Ryder: When I say it does not meet the test of pith and substance, I mean it is not in pith and substance in relation to Parliament's power to raise money by any mode of taxation in section 91(3). It is in pith and substance in relation to labour organizations, and, in particular, promoting transparency and openness of labour organizations.
I believe that's crystal clear when one examines the text of the statute and the summary, for example, of what is stated about what the bill is about at the beginning of Bill C-377. It's clear, in the way that the sponsor, Mr. Hiebert, has described its purpose — and in many of the debates that have taken place in the House of Commons and the Senate and before parliamentary committees — that the focus has been on whether there is adequate transparency and accountability for the finance and spending of revenues and transactions engaged in by labour organizations. There's been very little discussion about problems that need to be addressed from a fiscal income taxation point of view and the administration of the deductibility of union dues or the tax exempt status of labour organizations. It hasn't been a debate about those tax provisions. It's been a debate about transparency and accountability. So I think it's quite clear.
Of course, promoting transparency and accountability are important goals, but there is a constitutionally right way and wrong way to go about achieving them. Parliament can promote transparency and accountability for labour organizations from a collective bargaining perspective through the Canada Labour Code or through legislation dealing with federal public sector unions. It can do it through the Income Tax Act if we have disclosure obligations that are tied in a meaningful way to the tax status of labour organizations or the tax treatment of transactions involving labour organizations. But that's not what's going on here. The connection isn't there. That's why I reach the conclusions that I do.
Senator Plett: My questions are for Mr. Stamatakis.
Welcome, Tom. I see you're in Edmonton, and you're advertising Edmonton today instead of Vancouver. I'm wondering how your people at home will feel about that, but welcome.
Tom, in your presentation and in discussions I've had with you and other police associations, primarily Winnipeg, I guess, one of the large issues here — and I think you shared that — is the concern of the safety of police officers.
Are you aware that an amendment was made in the House of Commons to remove the requirement of home addresses, which was one of the concerns that your association had? Before you answer that, I'll put my other question to you as well.
Manitoba recently had a leadership election for the Leader of the NDP and it was the unions that managed to get Greg Salinger re-elected. I'm not suggesting it was the police union. Certainly the fireman's association had a large part in it, and others. Does the police association get involved, as an association, in the election of politicians and in the election of a premier? If so, should they not disclose what they do considering that they are using union dues that is tax exempt? It is not just reporting to the union members but using tax exempt dollars to possibly support political candidates.
Mr. Stamatakis: In terms of your first question, I didn't get to that in my remarks. I was going to acknowledge that Mr. Hiebert did reach out to our association around some of the privacy issues that I raised today and that we raised previously, and there were some amendments.
The concern, in my view, is that the amendments don't go far enough. For example, there's no protection for employees of police unions or associations, and there is no protection for contractors that engage in work for the police unions or associations. While many are obviously quite proud of their police associations, police unions, you cannot predict how criminal organizations or individuals engaged in criminal activity will take advantage of publicly known information to further their own purposes, which could jeopardize the safety of the individuals or their families. That's a significant concern for us.
In terms of your second question, I touched on that in my comments. Generally speaking, at the national level of the Canadian Police Association we don't get involved in publicly supporting one political party over another.
I can't say at the local level that some of our member associations haven't done that, but I default to Professor Ryder and some of his comments about what the better approach would be for creating the kind of transparency that would require that kind of activity. I don't have any issue with that. As I said in my comments, in terms of our own internal reporting, all of that information would have to be disclosed. It's disclosed in our financial statements. For example, at the Canadian Police Association, I distribute our monthly financial reports to all our member associations and we produce audited annual statements that would include any information around all our activities.
Senator Plett: Tax exempt dollars should be reported to the taxpayer.
Senator Joyal: Professor Ryder, I would like to come back to some of the legal implications of Bill C-377. Professor Bastarache, which is how I knew him at Moncton University years ago, wrote in his opinion:
. . . the fact that labour relations are not a head of power assigned exclusively to the provinces under the Constitution supports the view that Bill C-377 does not intrude on provincial powers.
How do you react to that statement, to labour relations being a joint field of jurisdiction when one head of government, i.e., the province, moves to occupy the field in order to rule labour relations, as we know most of the provinces have done? We received letters from New Brunswick, P.E.I., Nova Scotia and Winnipeg. They all allege that they have statutes that rule labour relations, and that in fact the other level of government is precluded from ruling on the same issue. How do you interpret that argument of Professor Bastarache?
Mr. Ryder: With respect, I don't share Justice Bastarache's view on that. A useful way of describing the flaw of the bill from a labour relations point of view is that it doesn't respect the divided jurisdiction between Parliament and the provincial legislatures regarding labour relations, because the courts have held for a very long time that labour relations fall within property and civil rights, a matter of exclusive provincial jurisdiction under section 92(13). And Parliament's jurisdiction with regard to labour relations, including its capacity to regulate trade unions for the purposes of collective bargaining, is restricted to federally regulated workplaces, that is, the federal public sector and workplaces that are engaged in activities that fall within federal jurisdiction, such as banking, telecommunications, airlines, and so on.
So there's divided jurisdiction, and our scheme of labour legislation across the country respects that. About 90 per cent or more of workplaces are provincially regulated, governed by employment standards laws and labour relations laws at the provincial level. Then of course we have the Canada Labour Code and federal public sector legislation dealing with labour relations collective bargaining and the role of unions in the collective bargaining process.
At the federal level, the Canada Labour Code is confined to federally regulated workplaces. Here, there is an attempt to regulate labour organizations across the country, all of them. With 90 per cent or more falling within provincial jurisdiction, I think that's a serious problem, so I disagree with Justice Bastarache on that point, Professor Bastarache, if you like.
Senator Joyal: The other argument in his opinion is about the ancillary doctrine to which you have alluded to in your presentation. I will read his statement on that:
According to the ancillary powers doctrine, as long as section 149.01 is sufficiently integrated within the federal scheme, it will be upheld as a valid enactment of federal powers.
And I emphasize this sentence:
The degree of integration required depends on the seriousness of the encroachment on the powers of the other head of government.
What is your evaluation of the degree of integration in the context of Bill C-377?
Mr. Ryder: As I suggested in my earlier remarks, Senator Joyal, I don't think there is really any integration between the provisions of Bill C-377 and the existing provisions of the Income Tax Act. That's why I disagree with Justice Bastarache on the ancillary powers doctrine.
I think it's important to pay attention to the latest ruling of the Supreme Court to address the ancillary doctrine in some detail, and that's the Quebec v. Lacombe ruling where I cited some of the key passages from the Chief Justice's majority opinion in that ruling on page 5 of my brief. She says that for a provision to be upheld under the ancillary powers doctrine, the connection between that provision and the larger scheme of valid regulation — in this case, the Income Tax Act — has to be substantial. It has to contribute to the enforcement of the existing legislative scheme in a meaningful way. I think the absence of any connection between the disclosure requirements set out in Bill C-377 and the tax consequences or the tax status of labour organizations is fatal from that point of view, because it doesn't make any connections.
[Translation]
Senator Boisvenu: My question is for Mr. Dias. Over the past decade, we have seen many political activities led by unions during election campaigns, be they provincial or federal. I think you were pretty active during the last election campaign in Ontario. We saw what happened in the spring of 2012, when the unions even funded student groups so they would protest rather loudly, which led to acts of vandalism.
This type of protest is obvious, and we were able to take note of it in Quebec because the FTQ announced that it would do everything in its power during the next federal election to defeat the Conservative government. When we see unions participate more and more in activities deemed political, should the officers who do this work go beyond informing just their members? Should they not inform all Canadians of these activities?
[English]
Mr. Dias: First, you've raised a bunch of questions. The labour movement doesn't support any type of violence. We're not suggesting that vandalism, violence of any sort is something we would tolerate.
Senator Boisvenu: I don't think that.
Mr. Dias: Second, the FTQ has come out publicly that they will support whatever party has the most likely chance of defeating a Conservative. I think you will find that the FTQ is not in isolation because Unifor has taken the same position. I'm candidly disappointed that Mr. Hiebert has decided not to run.
So do we participate in political activities? The answer is yes.
First of all, the unions generally get dragged into politics. I take a look at C-4. I take a look at C-525, at C-377.
Senator Boisvenu: My question isn't that.
Mr. Dias: Let me get to it.
[Translation]
Senator Boisvenu: I know that unions inform their members.
[English]
Mr. Dias: I'm getting there; let me answer your question.
[Translation]
Senator Boisvenu: I want to know if the information should go beyond the members, and if it should be open to all Canadians.
[English]
Mr. Dias: Our members, our taxpayers have complete access to everything. The spending on politics is determined by a national executive board that is made up of rank and file local union leaderships. It's clear. When we ask what we spend on politics, we're pretty clear. We spend time on most major televisions walking through exactly what we're doing as an organization and what we're spending it on.
I think you're finding that we are very transparent, very open.
Senator Boisvenu: For your members.
Mr. Dias: To our members and quite publicly. I'm on the news most nights, senator.
Senator McIntyre: Mr. Dias, I understand Unifor has a social justice fund.
Mr. Dias: Yes.
Senator McIntyre: Which is a registered charity.
Mr. Dias: Correct.
Senator McIntyre: My understanding is that fund has to file annual reports, and it has to disclose the amount of political activity, salaries, foreign money, and so on. If the Unifor social justice fund has to do all those things, why can't your union headquarters do the same for public disclosure?
Mr. Dias: I don't have any problem living by the same rules as everyone else, in other words, LabourWatch, Merit Contractors, National Citizens Coalition, and the Prime Minister's Office, which, obviously, the whole issue of transparency is being discussed in the Duffy trial.
If you take a look at the Income Tax Act, corporations live by totally different standards. There is no one else being pinpointed on Bill C-377 out of a hundred thousand non-profit organizations, just the labour movement. Corporations write off ballpoint pens, baseball tickets and business lunches. They have the same tax deductions as union dues.
Why is it about the labour movement? We know why; let's not fool each other. This is all about silencing the labour movement. You're having different obstacles in order to silence their voice, making them live to a different standard than everyone else. This is what this is about. If you want to talk about transparency, we can fly it both ways. There are the Dean Del Mastros, the Michael Sonas and Tom Stamatakis. We can walk through all of this. But this is about the labour movement.
An Hon. Senator: The NDP party, the NDP too?
Mr. Dias: The Prime Minister's Office, right? That's what we're going through right now, isn't it?
The Chair: Let's move on.
Senator Batters.
Senator Batters: Mr. Mortimer, you have provided a substantial brief to us. We, of course, were only able to give you five minutes in your opening statement to outline your arguments, which are well reasoned and welcome to our discussion here.
We had a witness recently before our committee on this bill who was specifically talking about the Canadian Labour Congress and giving us some valuable indications of why it's necessary for Bill C-377 to provide this kind of information. He used the specific example of the Canadian Labour Congress. It doesn't provide that kind of information because its members are unions. Its members are not actual union individuals. Could you please give us some more information about that? I'm specifically looking at page 8 of your submission where you say that there's no statutory language to support the claims that different labour leaders have made about the financial disclosure law that they say is included.
The Chair: Before you respond, I want to say that Professor Ryder has to depart.
Thank you, professor.
Mr. Mortimer: Mr. Yussuff left us with the impression that he represents 3.3 million people. No, he represents 41 unions, and none of those 3.3 million people can get Mr. Yussuff's financial statements, and none that I have heard from who tried have been able to.
The issue is that I'm not even sure that the union dues that flow up to the Canadian Labour Congress meet the ordinary operating expenses of the union. This is a subject that none of the constitutional experts want to address. Mr. Ryder has, unfortunately, left the room but avoided the issue I raised.
The Tax Court of Canada and the CRA have looked at union dues that are not ordinary operating expenses, and they have denied the tax deductibility of them. That's the legal issue, senators. We have non-compliance in this country with the existing Income Tax Act.
Bill C-377, with respect to Mr. Ryder and others, doesn't need to have any other provisions. It provides the information. It is the gateway to Canadians having their existing act and its provisions enforced.
When you send money to fund violent student riots in Quebec, which Mr. Dias' union did and CUPE and others did, that is not an ordinary operating expense. It does not comply with section 8(5)(c) of the Income Tax Act of Canada and shouldn't have come off of someone's T-4 slip. It was unlawful, point blank.
Senator McInnis: Thank you all for coming.
Mr. Dias, regarding your comments with respect to where this bill is coming from, the motive, as a Conservative senator, and I think I speak for all the Conservative senators here, if I may take that liberty, is not out to get unions. This bill was debated intensely on the floor of the Senate. In fact, an amendment was defeated. It was an intense debate, and I rather suspect when we report it back to the floor, we'll have yet another. I don't think anyone around this table can predict how the vote is going to turn out. We simply don't know.
I believe in transparency and accountability. To me, spokesman as you are for the unions, you protest too much, I think. You do not understand, I guess, the way this system works.
When we hear from the public that changes are required, they normally take legislation, and the legislation goes through many forms. It goes through the House of Commons and it goes through the Senate. I don't think there is a democratic system anywhere better than here in Canada.
I'm not here to lecture. I'm just here to ask you to understand that democracy takes many forms.
This is my question: Regarding proactivity and transparency, making this public to your membership, 83 per cent in a Nanos poll said —
The Chair: Sum up, senator.
Senator McInnis: Do you not agree with that?
Mr. Dias: I completely agree with proactivity. I also understand the democracy of our country. I think it played out quite well the other day in Alberta.
The whole issue of Bill C-377 was debated in the Senate, and they came out with the Segal amendments. So it was already discussed and voted on. It went to the house, and then the house was prorogued, which ended that debate, and here we are again.
I understand democracy quite well. On the whole issue of "I protest too much,'' there has to be a voice that is going to challenge the right wing extreme side of this country, and that's going to be the labour movement. I am going to continue to protest on issues I feel are causing inequality across the country.
The Chair: Final questioner. Senator Baker.
Senator Baker: I'd like to congratulate the witnesses for their very excellent presentations and congratulate Mr. Dias for his appearance here today and for the great work he's done for his organization.
The legislation we're considering says that all persons in positions of authority in a union will have to make a statement with a reasonable estimate of the percentage of the time they dedicate to other non-labour relations activities. How do you interpret that?
You have to provide a statement. Every single union member, shop steward, president of a local union anywhere, small community, has to provide a statement every year concerning percentage of the time they spend on other non-labour relations activities. How do you interpret that, Mr. Dias? Mr. Stamatakis, perhaps, what do you think they mean by that?
Mr. Dias: That is a very good question. As one can argue, are you arguing that politics is not related to labour relations? Because I would argue that, of course, politics is related to labour relations — when the government introduced Bill C-525, which affected union certification, when they imposed Bill C-4, which affects people's right to refuse unsafe work. So the question is rather broad.
I would suggest to you that from the time I wake up in the morning to the time I go to bed, I'm representing our members, and that takes a variety of different forms. We believe in a strong role within the communities, not just at the bargaining table.
The Chair: Mr. Stamatakis doesn't have time. We've reached the end of this session. I want to thank all of our witnesses for appearing and assisting us with our deliberations on this important piece of legislation.
Before I introduce our next panel, I will remind them all of the five-minute limit on opening statements. I hate to interject, but if you do exceed that, I will give you ample warning.
For our next panel, by video conference from Halifax, we have the Honourable Kelly Regan, Minister of Labour and Advanced Education for Nova Scotia; Dick Heinen, Executive Director for CLAC; D. Cameron Hunter, Principal, Eckler Ltd.; and Aaron Wudrick, Federal Director for the Canadian Taxpayers Federation.
We will begin with Ms. Regan.
Hon. Kelly Regan, M.L.A., Minister of Labour and Advanced Education, Government of Nova Scotia: Thank you for inviting me to speak on this bill and for accommodating my time here today because of my commitments at the Nova Scotia legislature.
The most important issue I want to address today is our concern that this legislation interferes with provincial jurisdiction over labour law, which may have unintended consequences on labour management relations. This issue has been addressed by constitutional experts who have already appeared before your committee.
Since the Snider case was decided in 1925, provincial jurisdiction over labour law has been well established. Our concern with this bill is that it's more focused on imposing reporting obligations on unions rather than taxation.
The bill requires that unions, not employers, must disclose details of all expenditures over $5,000 to the Canada Revenue Agency. The salaries and benefits of union employees who earn more than $100,000 must also be disclosed. It also requires that unions provide a detailed breakdown of expenditures on political and lobbying activities. They must publicly post that information on CRA's website. These kinds of expenditures can include payment to legal firms, settlement costs associated with grievances, or advertising costs. This could potentially give employers an unfair advantage at the negotiating table.
For all intents and purposes, it provides a window through which anyone can see the financial strength or weakness of a union or labour organization. For some smaller union locals — and there are many here in Nova Scotia — this could virtually expose their finances, as they probably only have a few transactions. If a grievance has been settled for only one member, posting financial statements for that would reveal that information and it would essentially violate that member's personal privacy.
The Province of Nova Scotia is concerned about the one-sided nature of this legislation, that it requires only one of the parties on the labour scene to disclose very detailed information that could be used against them. We'd like to see issues around basic fairness addressed.
The Province of Nova Scotia already has provisions that require unions to provide financial information to their members. Provisions in the Trade Unions Act allow union members to access copies of all financial statements, free of charge. There have been no complaints over the past five years about this provision.
This bill could be corrected by removing the public disclosure requirements and by looking at the effects it will have on smaller unions. Some have suggested that businesses already disclose this kind of information, but that's only if they are publicly traded companies, and the majority of Nova Scotia companies do not fall into that category. They are small, privately held businesses that don't have to make those kinds of disclosures.
Others have suggested at these hearings that this is simply a tax bill and that there's no infringement on provincial jurisdiction. I respect that the federal government has the power to order tax audits and do what it needs to do to ensure proper compliance with the Income Tax Act, but the provisions around public disclosure create an unintended consequence that will mean unions will not be operating on a level playing field.
I want to make one final point, because governments all across Canada are doing what they can to eliminate regulatory duplication and red tape. Nova Scotia, for example, has just signed an agreement with New Brunswick to advance this effort. It's hard to understand why the federal government would enter into this area of provincial jurisdiction. It is an intrusion and will no doubt result in a court challenge.
With that, I will conclude my comments and take any questions you may have.
The Chair: Thank you very much.
Mr. Heinen.
Dick Heinen, Executive Director, CLAC: Thank you, Mr. Chair and honourable members of the committee, for the opportunity to speak to you today about Bill C-377. I'm the Executive Director of CLAC, which is one of the fastest-growing unions in Canada. We represent over 60,000 workers across the country and across a wide variety of sectors.
CLAC recognizes the importance of transparency and accountability to its members and, more broadly, to Canadians. We agree with the idea of greater transparency when it comes to political activities undertaken by organizations in Canada, whether unions, professional organizations or other lobby groups.
However, we echo the concerns of some of the previous witnesses over the public disclosure requirements in the bill, which are certainly violations of individual privacy laws and are sure to be subject to unwanted constitutional challenges if passed in their current form. We believe in proper disclosure to the right bodies.
As previous witnesses have gone through these legal issues extensively, I will not take up valuable time with you today to rehash these points. Instead, I will take the opportunity to highlight how Bill C-377 is going to make Canada's biggest unions bigger and every other union in Canada smaller.
It's my guess that supporters of this bill did not intend to help increase the market share of our country's biggest union, but as Executive Director of CLAC, I am confident that this will be the result.
By way of context, let me explain that CLAC's approach to labour relations is fundamentally different from most other unions. We support a worker's right to select the union of their choice. We don't believe that any one union should have a monopoly of a single trade or a single the sector. We support real competition for public and private sector work. This bill will seriously affect the ability of CLAC and other alternative unions and labour organizations to compete against the established labour unions in Canada. Let me explain.
This bill mandates the disclosure of disbursements of $5,000 or more to each our vendors, contractors or any other payee, for that matter. In so doing, in the context of our union, this legislation will give large craft unions, like the building trades and other unions, the ability to make it more difficult for us to compete in the marketplace.
There have been many cases in our history where vendors have refused to deal with the CLAC out of fear of ending up on the wrong side of the larger established unions. Their relative size and market share already gives them an upper hand, and this only strengthens it.
As one illustration, there are key services for which we provide our members health and welfare benefits, pension and all of these programs. But there are a limited number of administrative services that are able to provide the administrative structure for that.
When we put the administration of our benefits out for tender, only two out of the six would even give us a response because of fear that if they were known to be working with CLAC, their other larger unions would take the business away. We have some research on this. There were at least six or seven very specific situations in which third party vendors and arbitrators and people were told, "If you deal with CLAC, we are taking our business away from you.'' By making us publish to our competitors commercially sensitive information creates a nightmare scenario for us.
The Chair: I will have to ask you to wrap up, sir.
Mr. Heinen: The Supreme Court of Canada has acknowledged that information disclosed to the government that contains confidential commercial matters that valuable to competitors and may cause harm to the parties will not be disclosed under the Access to Information Act. This is simple competition.
The Chair: Thank you.
Mr. Hunter.
D. Cameron Hunter, Principal, Eckler Ltd., as an individual: Thank you, Mr. Chair and honourable members of the committee, for the opportunity to address you today. It's a privilege to be here to provide my thoughts on Bill C-377.
I'm a consulting actuary with a specialty in pension and benefit plans. Most of my clients are boards of trustees of pension and benefits plans, including plans covering unionized or non-unionized workforces. I have provided advice on both a public and a confidential basis to provincial governments and the regulatory bodies on pension matters and have been recognized by the Canadian Institute of Actuaries for my volunteer service to the profession. I am also a director and vice president of the Multi-Employer Benefit Plan Council of Canada, or MEBCO. MEBCO is a non-profit organization whose mandate is to represent interests of Canadian multi-employer pension and benefit plans with provincial and federal governments regarding proposed or existing legislation. Having said that, I am here as an individual. I'm not representing any other party than myself.
Given the nature of the work I do, my comments today will focus on the practicable application of the bill in its current form. In particular, I would like to highlight some of the unintended consequences of adopting the bill as it currently stands.
The stated intent of Bill C-377 is to provide transparency and accountability for labour organizations and labour trusts. However, it will go well beyond that. Part of the problem is the definition of "labour trust.'' In the current draft of the bill, "labour trust'' is broadly defined. Proposed paragraph (6)(b) of the bill goes on to provide a list of exempted activities and operations, but the list is incomplete. In fact, given the wide array of arrangements available today, it may not be possible to develop a comprehensive list of exemptions. I will give you a couple examples.
Employers may have arrangements in place to provide pensions in excess of the limits permitted under the Income Tax Act. Because arrangements can include union members and are not expressly exempted, they will be subject to the bill's disclosure requirements. However, it's not unusual for these arrangements to be paid directly out of the general revenues of the employer, which would make the general funds of the employer subject to the disclosure requirements of the bill. In fact, it's quite possible that some governments may have arrangements that operate this way, in which case these governments' consolidated revenue funds may be required to meet the disclosure requirements.
There are other notable omissions from the list of exemptions. For example, trusts established to collect vacation pay, provide legal services and possibly fund substance abuse programs may not be exempt. I'm aware of a non-profit housing program that may also be subject to the disclosure requirement. The public policy reason for exempting some but not all of these types of plans is not clear.
Another flaw in the current wording of the bill is that only those trusts or funds devoted exclusively to administering, managing or investing the listed plans are exempted. This poses a problem for master trust arrangements in which multiple separate trusts are combined into one larger trust. Each trust may provide different types of benefits. If any one of these benefits is omitted from the exemption list, it appears that all other benefits, health benefits, life insurance and other types of exempted benefits may be subject to the disclosures.
Workers' compensation plans may also be subject to the bill. The Ontario Workplace Safety and Insurance Board, for example, is maintained at least in part for the benefit of union members and would therefore appear to satisfy the definition of "labour trust.'' Benefits provided by the WSIB include survivor benefits, funeral and transportation costs, bereavement counselling and support for spouses wishing to rejoin the workforce. Given that these benefits are not exempted, it appears that the entire WSIB accident fund may be required to satisfy the bill's disclosure requirements.
Presumably the exemptions in proposed subsection (6) were added to the bill to address concerns about public disclosure of private personal information. I submit that this section of the bill does not provide a complete list of types of plans that should be exempted based on this presumption. In addition, the exclusivity requirement may offset the effect of providing the exemptions.
I would also like to note that although the bill requires disclosure of sensitive personal data, there is no requirement under the bill for individuals for whom this disclosure applies to be made aware that this information will be made public. This seems to go beyond the stated objectives of transparency and accountability of labour organizations and labour trusts.
That said, the incomplete list of exempted trusts and the exclusivity requirement on that list and the lack of disclosure to affected individuals offer sufficient reason to send Bill C-377 back to allow more thorough vetting of its language and consequences.
Thank you for your time.
The Chair: Thank you.
Mr. Wudrick.
Aaron Wudrick, Federal Director, Canadian Taxpayers Federation: Thank you for inviting me, senators. Good morning. My name is Aaron Wudrick. I'm the Federal Director at the Canadian Taxpayers federation. Thank you for the opportunity to speak today on Bill C-377, which the CTF supports as it is consistent with our objectives of promoting transparency and accountability with respect to taxpayer dollars.
The CTF is a federally incorporated, not-for-profit citizens group, with over 84,000 supporters, dedicated to three key principles: lower taxes, less waste and accountable government.
That said, we support the principles of transparency and accountability. We have called for further disclosure, for example, of spending of members of Parliament and advocated for a federal sunshine list for public sector worker pay, and we are also a very vocal proponent of the First Nations Financial Transparency Act, which has many parallels with Bill C-377, as it sought to give members of First Nations reserves and the public a right to see band finances and salaries.
The opponents of that legislation use many of the same arguments that union witnesses have cited in appearing before your committee on this current bill, concerns about, among other things, constitutionality, privacy and red tape in particular. I confess that I will sidestep the constitutionality issue, noting only that there are differing expert opinions on that aspect of the bill. While I am a lawyer, I certainly don't hold myself up as a constitutional law expert at the level of Professor Ryder or a former Supreme Court justice, so I will defer to them accordingly on that matter.
The primary interest the CTF has in this bill is with respect of the proper application of the Income Tax Act. Unions collect about $4 billion annually in Canada and can spend it as they see fit, with no mandatory reporting to their members or the general public. What makes this an issue for taxpayers is the simple fact that unions enjoy a range of tax benefits and special tax treatment that act as a subsidy for the activities they carry out. Union dues, as we know, are tax deductible, as is strike pay. These tax breaks have been estimated to have a worth of about $400 million a year or more. Charities receive somewhat similar but not as extensive special treatment, and they too are accordingly required to file disclosure in order to maintain charitable status. Such a system requires checks and balances since union funds are subsidized by the taxpayer, and public reporting of union finances provides such a check and balance.
Of course, any tax break is ultimately a public policy decision, and those decisions have to be approved by the general public to determine whether they are still valid. It is, therefore, in the interest of unions and their leaders to be as transparent as possible when it comes to their financial dealings, particularly given some recent revelations from such things as the Charbonneau commission and the Ontario Provincial Police Association.
One would expect organizations that face such serious allegations to throw open the doors for all to see, clear the air and assure the general public that these are isolated cases and not a systemic problem. Instead, what we've seen are the same attempts to thwart further disclosure, just as we saw with some First Nations chiefs with respect to the First Nations Financial Transparency Act and as we continue to see with the federal government on things such as salary and expense disclosure.
As a useful example, it's hard to imagine that some of the allegations, such as recent ones against the Ontario Provincial Police Association, would have gone unnoticed for as long if unions had been required to report their financial information publicly. Someone, whether an enterprising journalist, police officer, political staffer, union member or a group like the CTF, would have likely discovered such activity earlier and blown the whistle. Alternatively, knowing that such public reporting existed, perhaps those engaged in the questionable activity would have scrapped their plans, knowing there was no way to hide their dealings.
This is why we believe transparency is so important. First, it acts as a deterrent. Second, if the former fails, you empower a broader class of people to uncover any transgressions.
I also want to flag the political and social engagement of unions. Anyone who witnessed the last Ontario election knows that unions are capable of exerting major political clout, and they have a plan to export this model across the country. Our point here is not that we object to unions engaging in these activities. We do not. What we object to is them being subsidized by the taxpayer to do so. Given that they are, however, we believe that this special benefit should attract a higher level of transparency than it would were they not subsidized by the public.
Again, these tax breaks are a public policy decision, meaning the public has every right to review and assess the implications of these policies, something which is very difficult to do under the status quo. If unions want to influence the political and economic agenda, they should be open and transparent about how those activities are financed so that Canadians can decide for themselves if they are comfortable subsidizing them.
We believe that, as with the First Nations Financial Transparency Act, passing Bill C-377 will ultimately prove to be a positive step forward toward greater transparency and accountability in Canada. Accordingly, the CTF is pleased to endorse it and looks forward to its passage.
The Chair: Thank you.
We will begin questions with Senator Ringuette.
Senator Ringuette: My first question is to Minister Regan. Thank you very much for taking the time to be with us.
Mr. Wudrick, from the Canadian Taxpayers Federation, just stated before this committee that there is no legislation making it mandatory to disclose finances to members from any union. Could you tell us if that's the situation in Nova Scotia?
Ms. Regan: Thank you, Senator Ringuette. We do have this kind of legislation already, and because labour unions are almost exclusively a provincial jurisdiction, we feel that's adequate.
Senator Ringuette: Thank you for correcting that fact.
My next question is to Mr. Hunter. Thank you very much for your presentation. I would like to add that, in the Privacy Act, there would be two requirements right now. The union would have to ask the citizen for their ability to disclose to the CRA, and then the CRA minister would have to get the signature of agreement from any one of these persons to put it on the website. That's the Privacy Act of Canada, so I can just imagine.
But to further understand your presentation, you are saying that because of the structure of the different funds and trusts, in some instances there might be funds that are bigger than union members. So, therefore, also all of the other people involved in that trust fund would have to have their financial transactions of $5,000 and more made public. Am I understanding correctly?
Mr. Hunter: That's correct. Under the definition of "labour trust,'' it is not restricted exclusively to members of the labour organization. It's just if they are party to the labour trust. So if other individuals are party to the labour trust, it appears that the legislation will require the disclosure for those individuals as well.
Senator Ringuette: Mr. Wudrick, with regard to the Canadian Taxpayers Federation, you are non-profit organization. Therefore, your corporation does not pay any taxes. What kind of reporting to do you do publicly?
Mr. Wudrick: It is not the first time that the CTF has been asked this question. I would suggest to you that there is a nexus between public funding and transparency. That is to say that the receipt of benefit under the Income Tax Act is what attracts a higher level of transparency and accountability. If any organization values the privacy of its supporters over all other issues, as the CTF does, the CTF is willing to sacrifice those benefits. We do not issue tax receipts. Unlike political parties, we can provide no incentive to support our organization.
Saying that privacy is very important, I completely agree. The question for every organization, whether they are a charity, a non-profit or a corporation, is to decide whether the benefits they receive under the Income Tax Act outweigh the trade-off that will be asked of them for those benefits.
Senator Ringuette: You believe in the supremacy of privacy, especially with regard to your organization and your membership, so why should it be different for any other kind of labour relations?
Mr. Wudrick: Again, the only thing that I believe triggers the higher level of transparency and accountability is the special treatment under the Income Tax Act. If the public is subsidizing an entity, the public then has a right to know how that organization operates. If an organization receives no money from the state and no special treatment under the Income Tax Act, I would suggest that their obligations are not to the same level of those that do.
[Translation]
Senator Dagenais: Thank you to our witnesses for having accepted our invitation to appear. My question is for Mr. Hunter. Mr. Hunter, you are an actuary?
[English]
Mr. Hunter: Yes, that's correct.
[Translation]
Senator Dagenais: I do not know if you have ever done work as an actuary for unions. When I was president of the Quebec Provincial Police Association, we had actuaries from Aon Consulting. They provided all of the assessments of the health insurance fund and the life insurance fund. As Mr. Heinen mentioned, we of course had to provide reports along with our actuaries on our insurance funds because we had to pay a tax on the insurance and prepare a tax return.
That being said, our actuaries prepared our tax returns for the general fund. However, the general fund was not subject as such to the Income Tax Act because it was a non-profit organization.
Why do health insurance and life insurance funds, and even humanitarian funds, have to be transparent? Regarding the general administration fund, we had to disclose to our members the salaries of their leaders, and what was paid out in legal and actuarial fees. Why should these elements not be transparent to Canadians citizens, as Mr. Wudrick mentioned? Because the biggest part of our expenses were for salaries, and the actuarial fees were also prohibitive.
I would like to hear you on that issue, and on the reasons why the general administration fund is not disclosed to Canadians.
[English]
Mr. Hunter: Thank you for your question, Senator Dagenais. My area of expertise is pension and benefit plans, and the purpose of my presentation is to highlight that, in the definition of "labour trust,'' it's a broad definition and, in the manner in which it's written, there are certain types of funds that I believe should be exempted and not subject to this. I gave some examples of those.
I'm not an expert on the structure of general funds of unions, per se. As I say, my point is that I don't believe it's appropriate to disclose, say, information on rank and file union members on the amount of vacation pay they receive because it's in excess of $5,000, which I believe is one implication of this legislation.
[Translation]
Senator Dagenais: I have a last question for Minister Regan. Correct me if I am wrong, Ms. Regan. You said that the bill could force unions to reveal their financial resources. Naturally, I will give you an example I lived through for 28 years. As a union member, I had to pay 1.25 per cent of my salary in union dues. The employer took these union dues and transferred them into the union accounts. The employer basically knew that in any given year $4.5 million or $5 million ended up in the coffers of the union, and this was the case for every union. The employer collected the union dues, and therefore already knew how much money each union had.
So Bill C-377 will not reveal this information, which is already out there, correct?
[English]
Ms. Regan: Actually, that is my point. In fact, here in Nova Scotia, salaries, et cetera, are already disclosed by unions. You don't need that bill for Nova Scotia. It intrudes on provincial jurisdiction.
We know that about 8 per cent of union members are under federal jurisdiction, things like transportation and wireless services, but the rest of it is under provincial jurisdiction. We feel that this should remain under provincial jurisdiction and not under — what's the word I'm looking for? Intrusion. This is an intrusion by the federal government into provincial jurisdiction which has been clearly set out since 1925, from the Snider case on.
Senator Joyal: Minister, I would like to come back to your letter, the third paragraph. As I read it, this legislation infringes on provincial jurisdiction over labour legislation and appears to seek information under the guise of the Income Tax Act. Those are the words that appear in your letter dated April 21. Did you receive a legal opinion from your department or the Department of Justice about the legal, constitutional implication of Bill C-377?
Ms. Regan: I did not ask for an opinion on its constitutionality. We looked at the case law from 1925 on and arrived at that opinion.
Senator Joyal: In other words, you received a formal legal opinion from the legal authorities in your department, plus Department of Justice, I suppose.
Ms. Regan: No. What I said was I had a briefing based on the common law.
Senator Joyal: You had a briefing. Was it in printed form or just oral?
Ms. Regan: It was an oral briefing.
Senator Joyal: Is it the intention of your department to seek in court a declaration of non-constitutionality of Bill C-377 if the bill would be adopted finally by Parliament?
Ms. Regan: I think we would have to have a conversation with my colleagues across the country and my cabinet colleagues as well.
Senator Joyal: Mr. Hunter, with regard to the labour organization trust, have you looked into the situation of the funds managed by unions like the FTQ in Quebec or other funds that might be operated by unions, whereby that would put the investment the union made in economic initiatives and all kinds of fields of investment in a much different position in relation to the other private funds with whom they might share the ownership of a company or other activities and the impact that they would have for the unions becoming partners in those investments?
Mr. Hunter: I have not investigated that situation. My only comment is that in the work that I do, I've never encountered situations like that.
Senator Joyal: But you know that those funds exist. They are managed by unions and they are legitimate economic activities. There are returns, and the returns are divided among the union members. Are you not aware that that exists? In my province of Quebec, both of the large unions, the FTQ and the CSN, operate that kind of fund, with large benefits for their members.
Mr. Hunter: I understand that a lot of different types of arrangements are undertaken, yes. I have not investigated that.
Senator Joyal: Mr. Heinen, if I can come back to your presentation, I tried to understand in which way this bill would really jeopardize your approach to union activities. You mentioned that in fact you were for the freedom of selecting a union. This bill, in my opinion, would in a way disseminate information that might be helpful for somebody to choose his or her union. Why are you, in a way, still maintaining your operation to this bill?
Mr. Heinen: There are a number of things, but very specifically, in this bill, we have no problem with disclosure of any of our finances to anyone who asks for the information. In an organizing activity, if there are questions about our finances, we will share with them whatever they need to know. We're not hesitant at all about that.
The issue is in the blacklisting of our vendors and the way in which mischief can be made out of public information. The Supreme Court of Canada has ruled on this. It is illegal for the federal government to provide information to people that may jeopardize or that may result in material financial loss or prejudice of competitive position of a third party. That public disclosure, in a competitive environment, is what we are concerned about.
I also have some other concerns about vacation pay. We negotiate with our membership vacation pay in the collective agreement. The company pays vacation pay to us. We have it in a fund. Once a year we pay that out. Now do we have to go to every single member for whom that vacation pay is given and ask them if they actually want that in the collective agreement? Because an unintended consequence is going to be that that information is going to be revealed publicly, exactly how much that person is going to get paid for his vacation pay. That is an unintended consequence. The granularity of this particular legislation is what we are concerned with.
Senator Plett: Mr. Wudrick, we heard from a previous panel here. One of the witnesses was railing on our government for picking on unions as opposed to picking on other organizations. Of course, we have clearly been working with charitable organizations as well, because we believe there should be transparency and disclosure there, and I think you've been consistent with that.
Critics focus on the idea that labour codes are the proper venue for dealing with disclosure of tax-deductible dues by tax-exempt organizations. We did some research and looked at all key labour codes across Canada to see if there were any provisions related to taxation of dues of labour organizations, and of course there weren't.
Labour codes, of course, have nothing to do with what is and what is not a tax-deductible union dues, nor what is not a tax-exempt union, because they're both subject to the federal Income Tax Act and not the labour law.
If unions decided that they didn't want a tax exemption and said, "Well, we want to be like the taxpayer federation and we don't give tax receipts, there are no tax exemptions and union dues aren't tax exempt,'' or if Minister Regan would come along and offer that Nova Scotia would give the tax exemptions that the federal government is giving because she thinks we are encroaching on her territory, as Minister Braun from Manitoba did a week or two ago, how would you feel about some of those provisions, if that was done? Would that satisfy the Canadian Taxpayers Federation?
Mr. Wudrick: Yes. To reiterate the point I made to the senator earlier, what attracts the higher level of disclosure is the preferential tax treatment. If an organization is willing to forgo that preferential treatment, the arguments against this bill collapse. I would agree that if any organization suggests that it is more important to them that they have privacy than they receive the benefit of special treatment under the Income Tax Act, then I agree that this bill becomes unnecessary.
Senator Plett: Or if the provinces would say, "We'll pick up that slack that the federal government is now offering, we'll offer that instead and then stay out of our territory,'' that would also serve that purpose.
Mr. Wudrick: Yes. The difficulty I have with the argument jurisdictionally — I promised I wouldn't get into the constitutionality — it seems to me that if the Income Tax Act is the place where the definition of the validity of deducting union dues is enshrined in law, it also seems to me that the Income Tax Act will be the proper venue to allow a mechanism to determine how we find out exactly what the composition of the deduction is for those dues.
Senator Jaffer: Thank you for your presentations. Minister Regan, thank you very much for your presence here today.
I first have a question for you, minister. You've recently studied this bill, and I'm sure you've looked at what exists in your province. Are you content that what you have in Nova Scotia is sufficiently transparent and the unions are accountable to their members?
Ms. Regan: Yes. In fact, Senator Jaffer, we've had no complaints about this issue at all, so I was surprised to see the federal government moving on this particular issue.
I did want to mention something that Senator Plett referred to. In terms of a death benefit, I can tell you that, as a citizen, I received a death benefit when my first husband died at the age of 30. I received that from his union. I would not have wanted to have that amount published publicly. I think there are a lot of people, whether it's from the Workers Compensation Board or from a union plan, who would be in the same situation and who would not appreciate having their privacy breached like that.
Senator Jaffer: Thank you for that, minister.
I have a question for Mr. Heinen. I've been trying to understand. Others may have heard it before, but for me, I just recently heard about your issue under the Competition Act and access to information. I want to put an example to you. I want to try to understand what you're saying.
You are negotiating a benefit — it doesn't matter what benefit — on behalf of your members. You negotiate this benefit with a company and it's disclosed publicly. Then you find out that a bigger union now wants that company to give a different benefit or to hurt you in some way. Is that what you're trying to say?
Mr. Heinen: You're actually mixing two things, but let me use this as an opportunity to explain it.
We have all sorts of third-party vendors, such as printing. Printing all of our documents and paperwork goes out in a RFP to somebody to do all of our printing. It may be a large printing. We've moved it in-house recently, but this is an example.
Now, if they bid on this particular package — and there may be three or four printers bidding on this particular package — that is a commercial decision and a commercial issue that ought not to be decided upon whether this particular vendor is also doing work for the building trades, and that job may be jeopardized because they're going to put leverage on him and say, "Oh, if you do work for CLAC, then we're no longer going to give you our work.'' That's one issue. That's mischief being made out of a commercial venture that I think is protected under the Competition Act.
The other one has to do with the negotiation of benefits within our organization. Let's say that ten employees are working for a particular company. Five or six of them want us to negotiate the vacation pay fund, and they don't mind if that is going to be disclosed publicly, but there are going to be four of them who say, "Oh, we don't want this disclosed publicly.'' How do you deal with that in a bargaining unit relationship, where the majority wins about what gets negotiated in a package? It doesn't work.
So we will have to ask every individual, of maybe thousands of people, as to whether or not we can disclose their information, and that becomes very problematic for us.
The Chair: We have six senators on the list, about 12 minutes left roughly, so I'm going to ask you to try to be considerate of your colleagues; and, witnesses, the Coles version with respect to your responses.
Senator McIntyre: Mr. Heinen, in your oral presentation, and in your report, you indicated that this legislation will make it more difficult for large craft unions, such as Canada's Building Trades Unions, to compete in the marketplace. As you know, Canadian unions with U.S. headquarters, such as the United Steelworkers of Canada and others, are already collecting and publicly disclosing financial information in the United States. The disclosure is made on the U.S. Department of Labor website. As I recall, they have not been complaining that it puts them at a disadvantage. When it comes to negotiating with their corporations, it is simply not an issue because they have had to adapt. Could I have your comments on that, please?
Mr. Heinen: With due respect, I think that's a bit of a misinterpretation. We're saying that CLAC, vis-à-vis all the other very large trade unions, is going to be at a disadvantage because our structure is at odds with theirs, and they will take advantage of their leverage to get commercial gain and to provide commercial pain for us. That's where the anti-competition act comes in.
Would we adapt? I think it would be a very difficult situation for us.
Senator Cowan: I wonder, Mr. Heinen, if you would file with us the names of those cases that you were referring to with respect to privacy concerns.
My question is for Mr. Wudrick. You suggest that the dividing line is whether or not an organization or a person is entitled to deduct, to make certain deductions. Wouldn't you agree with me that all of us, whether we're seniors or parents or employees or pensioners or persons with disabilities, are entitled to deductions of one sort or another? Are you suggesting that anyone who receives or is entitled to such a deduction of anything under the Income Tax Act should be held to this level of disclosure? Is that what you are suggesting?
Mr. Wudrick: No, what I'm suggesting is that unions, as a group of entities, along with charities and corporations, receive different treatment than you and I as individual tax filers. One the criticisms of this bill has been the lack of a level playing field. In fact, it only addresses unions and not others. To that we say: Bring forward suggestions about the others. We don't believe that simply because a bill only addresses one class of entities that therefore we shouldn't pursue it. The First Nations Transparency Act is a good example. It did not cover every politician in the country, but it filled a hole. We don't let the government itself off the hook. We believe this government needs to provide further disclosure; for example, the spending of members of Parliament and, obviously, this esteemed institution as well. I don't think the fact that you can't deal with all problems at the same time is sufficient argument against dealing with one of those problems.
Senator Batters: Minister Regan, the Nova Scotia legislation that you referenced in response to Senator Ringuette, it relates to union disclosure to its union members, and not to the public; is that correct? Is that a yes?
Ms. Regan: Yes, it is.
Senator Batters: Thank you.
Mr. Wudrick, in your opening remarks, you provided us with a helpful comparison about the First Nations Accountability Act. As you illustrated, organizations like First Nations, charities and that sort of thing do disclose financial information. I'm wondering if you could elaborate on the public policy benefits of Canadians having access to the public disclosure of those organizations and to labour unions.
Mr. Wudrick: I think especially with respect to the First Nations Transparency Act, one of the arguments against it was that this would simply fan the flames of discrimination against Native bands and this unfortunate stereotype that Native leaders misspend money. In fact, now most of them have disclosed, we've discovered the opposite is in fact the case: The vast majority of bands spend reasonable amounts of money and there is nothing fishy in their books. We think that that's a welcome development. We think that Native leaders should be happy about that because now they have firm evidence to suggest that the majority of us are doing everything by the book. Only the offenders are being singled out. We think, again, that if it is the same case with the labour movement, it will only affect the bad eggs. It will only shine the light on those ones. It will, in fact, buttress the arguments for labour unions to have similar measures apply to other entities and so help level the playing field.
Senator Batters: To give you a little bit of information in response to an earlier comment you made about all organizations needing to have better financial transparency and accountability, I want to draw to your attention the Senate and that we have been posting a lot of our expenses online for the last year and a half or so.
Thank you.
Senator McInnis: Minister Regan, welcome.
Ms. Regan: Thank you.
Senator McInnis: It's nice to see you.
Quoting from your letter of April 21, 2015, you say that "this legislation infringes on provincial jurisdiction over labour legislation and appears to seek information under the guise of the Income Tax Act.''
Proposed section 149.01 merely provides disclosure of financial information by labour organizations. You realize that there's no attempt here to regulate the activities of these organizations, to meddle in their operations in any way or, in fact, how they spend their money. So how is that an infringement on provincial jurisdiction?
Ms. Regan: Thank you, Senator McInnis. It's good to see you as well.
What I would say is that any attempt to control or to regulate the activities of unions that are provincially regulated, and that would be 92 per cent of the ones in Canada, is in fact an attempt to control that. As I previously mentioned, I did have the unfortunate opportunity to receive a benefit from my late husband's union upon his death. Not only do we have the provision where you are actually making new regulations around unions, which are, with great respect, not under federal jurisdiction, but quite frankly you're asking for disclosure of people's personal information. It is no one's business but mine that I received a benefit upon my husband's death 25 years ago.
Senator Baker: One of the most difficult things perhaps the courts will have to deal with when this legislation is passed is deciding what the purpose of the legislation is. You have to know the purpose of the legislation before you can determine its constitutionality or whether or not it breaches the privacy provisions protected by sections 7 and 8 of the Canadian Charter of Rights and Freedoms.
I don't know if you want to comment on this, but I think the most offensive part of the legislation is that it commands anyone in a position of authority in a union of any size in Canada to declare publicly, through the Canada Revenue Agency, not just their political activities during the year and their lobbying activities, but also other non-labour relations activities, which would include what? Would it include the Boy Scouts organization?
No one in a small community who is president of a local small union or shop steward would ever want to be in that position again if they have to declare their political and lobbying activities but also other non-labour relations activities.
Do any of the witnesses have any comment on the outrageous nature of that invasion of privacy on the part of a union member? Minister?
Ms. Regan: Thank you, senator. Again, it does speak is to the whole privacy issue. It also speaks to an issue that we have found here in Nova Scotia. We have had a number of very small unions, and adding another reporting regulation to these very small unions would in fact be more onerous for those small unions. It's one thing if you're a large organization with many people who can assist you with that.
Quite frankly, if you going to impose new, onerous regulations on a small union, that's a concern for us. As I mentioned earlier, both Nova Scotia and New Brunswick have joined together to try and reduce red tape. This just expands it greatly.
The Chair: Does anyone else wish to respond to Senator Baker's question?
Senator Plett: On a point of order, chair. Could I quickly read this into the record? The Minister has talked about death benefits here a number of times. In fact, there was an amendment made in the house that disclosure of death benefits are exempt in this legislation, so it's not relevant at all.
The Chair: Thank you, witnesses. I very much appreciate your time and your testimony. It has been very helpful.
For our final panel this morning, please welcome Daniel Therrien, Privacy Commissioner of Canada; via video conference, the Honourable Kevin Flynn, M.P.P., Minister of Labour, Ontario; via video conference, Laurie Channer, Director of Industrial Relations, Writers Guild of Canada; and Ian Lee, Assistant Professor, Carleton University.
Thank you all for being here. We will begin with Commissioner Therrien, followed by Mr. Flynn, Ms. Channer and Professor Lee.
[Translation]
Mr. Daniel Therrien, Privacy Commissioner, Office of the Privacy Commissioner of Canada: Our office has a longstanding practice of examining privacy risks post by initiatives by applying a privacy analysis framework, based on demonstrating necessity, effectiveness, proportionality, and on examining less privacy-intrusive alternatives. It is through the lens of this four-part test that I make the following comments.
Bill C-377 aims to increase the transparency and accountability of labour unions by requiring the public disclosure, through a Canada Revenue Agency website, of personal information which is generally very sensitive, such as salaries and political activities.
While transparency and accountability are essential features of good governance and critical elements of an effective and robust democracy, so is the need to protect individual privacy. However, to determine whether this legislation is necessary for accountability purposes, I believe it is relevant to ask to whom this accountability is owed.
If enhanced transparency and accountability are for workers and union members, as suggested by some, I would submit that public disclosure of sensitive and extensive personal information on a CRA website is not necessary to achieve this objective. Provincial laws already require unions to make financial statements available to their members. This information is internally available to members and, in many cases, publicly posted on union websites. These statements do not provide names and are usually in aggregate form. It may be that accountability may require the disclosure of some elements of personal information of union leaders, for instance, their salaries, but if accountability is for members, I do not see why disclosure of this information to the public at large is necessary.
On the other hand, if Parliament is of the opinion that unions are accountable to taxpayers in general, given that union dues are tax deductible, I would like to share a few thoughts on the proportionality between privacy and accountability.
[English]
There is a precedent in federal legislation requiring the public disclosure of personal information in the name of accountability to taxpayers. I'm referring here to the scheme applicable to registered charities. Under that scheme, registered charities are required to publicly disclose only salary information for their highest compensated positions in annual information returns, without identifying the individuals occupying these positions. There is no obligation to make public the political activities of these senior officers or their lobbying or educational activities. In my view, such a qualified public reporting requirement represents a more appropriate balance between accountability and privacy, and it could potentially apply to a labour organizations.
I must say that I am particularly troubled by the fact that Bill C-377 proposes to associate the name of specific individuals with political activities. These activities are clearly of a sensitive nature. Why require this disclosure when other schemes adopted in the name of accountability to taxpayers do not?
Although less sensitive, the public naming of individual payers and payees associated with transactions having a cumulative value over $5,000 is also, I believe, disproportionately intrusive from the privacy perspective as it would catch not only union members but also many third party contractors as well.
As for publicly disclosing the names of individuals earning over $100,000, as a principle of course, an individual's remuneration constitutes sensitive personal information that cannot be disclosed without consent. Of course, there are exceptions, such as the salary disclosure of senior public servants in some jurisdictions. However, even where such exceptions can be made in the name of greater accountability and transparency, I believe they should be limited in scope.
The fourth element of a privacy analysis is whether it is possible to adopt less intrusive alternatives to reaching the objective of the legislation — here, transparency. As mentioned, provincial laws already provide for the disclosure of information to union members in the name of accountability. In my view, they do this in a privacy-sensitive way. Internationally, legislation with similar objectives either is limited to the disclosure of financial statements, as in France, or when personal information is involved and is limited to the salaries of a union's highest paid officers, such as in the U.K. and in Australia. Only the U.S. has legislation similar to Bill C-377.
Returning to the specifics of this bill, if you believe that transactions with a cumulative value exceeding $5,000 should be reported, these in my view could be itemized as part of the union's financial statements without naming a specific payer and payee.
Finally, the estimated breakdown in terms of percentage of time spent on political lobbying or non-union-related activities in my view need not and should not be publicly attributed to specific individuals. If Parliament believes that such public disclosure is necessary, and there are effective and appropriate steps in the name of greater transparency and accountability of unions, then it should only be disclosed in general aggregated terms.
I hope these comments have been useful. I will be happy to take questions.
The Chair: Thank you.
Minister Flynn.
Hon. Kevin Flynn, M.P.P., Minister of Labour, Government of Ontario: Thank you Mr. Chair. Good afternoon and thank you for having me here today. I appreciate this opportunity to share with members of the Standing Senate Committee on Legal and Constitutional Affairs the perspective of the Government of Ontario regarding Bill C-377.
Two of my predecessors as Minister of Labour in the province have commented on this bill in the past, as members will already be aware. Today I would like to reiterate their serious concerns and ask this committee and the Senate as a whole to reject this bill.
The reason for that, Mr. Chair, is the Government of Ontario has five specific concerns with this bill. First, we believe that this bill is unnecessary. The internal administration of a union is simply a matter between the union and the membership of that union. Unions here in the province of Ontario are already required to provide audited financial statements to any members of that union that request them. Indeed, in most jurisdictions in Canada, including at the federal level, financial disclosure requirements are already imposed upon unions. There is, therefore, no need for new legislation in this area.
Our second concern is that the bill's financial disclosure obligations would create an unnecessary burden and increase costs to ordinary union members. This legislation is unfairly imposing an undue burden on organized labour but not on other organizations in the country.
Our third concern is that the bill raises very serious privacy concerns, as you just heard. The Privacy Commissioner of Canada has already told a previous Senate committee that the disclosures outlined in this bill would clearly involve very sensitive personal information, and these views have also been echoed by the Canadian Bar Association.
Our fourth concern is that the bill risks destabilizing labour relations here in Ontario. Ontario currently has a very strong relationship with labour. Nearly 98 per cent of all labour contracts in the province are settled without any disruption at all. My fear is that if this bill is passed, it will drastically derail good labour relations and collective bargaining here in the province of Ontario by unfairly attacking one side and damaging that delicate balance between employers and unions.
Finally, our fifth and our paramount concern with the bill is its constitutionality. The bill, if passed, would have the federal government overstepping its constitutional bounds and stepping into the area of provincial jurisdiction. In Canada, labour relations legislation and the regulation of workplaces rest with the provincial government.
I'm sure this committee is aware of the 1925 case of Toronto Electric Commissioners v. Snider. That was 90 years ago. In that case, the Judicial Committee of the Privy Council determined that section 92 of the Constitution identifies labour as the exclusive jurisdiction of the provincial governments.
Fifty-four years later, the Supreme Court came to the same conclusion in Northern Telecom v. Communications Workers. They stated that when it comes to labour relations, exclusive provincial competence is the rule.
It has been claimed that because these changes are being made as tax measures, the federal government has every right to make them. Simply put, Mr. Chair, that conclusion is incorrect. These proposed reporting requirements have no tax consequences and therefore cannot be justified as federal jurisdiction.
Additionally, as the Canadian Bar Association has warned, the bill may contain disclosure requirements that are counter to the Charter's protection of freedom of expression and freedom of association.
I would urge you not to pass this bill. It would be a step in the wrong direction for labour relations in this country and would likely bring on very lengthy and costly litigation.
In conclusion, this bill is redundant, unnecessarily burdensome for unions and their members, threatens to derail collective bargaining and good labour relations across this country, and raises serious privacy and constitutional concerns. It does all of that without any perceptible gain for Canadians.
Respectfully, I would strongly suggest that you follow the lead of former Conservative Senator Hugh Segal. The last time this legislation came to the Senate, Mr. Segal held principle above partisanship and fought successfully to have this bill amended. He and many others have the same concerns with this bill as the Government of Ontario. I would recommend that this bill not be passed into law.
Thank you.
The Chair: Thank you, Mr. Minister.
Ms. Channer.
Laurie Channer, Director of Industrial Relations, Writers Guild of Canada: Good afternoon, senators. Thank you for the opportunity to appear here and provide you with the Writers Guild of Canada's perspective on Bill C-377.
The WGC is the national association representing over 2,100 professional screenwriters working in English language film, television, radio and digital media production in Canada. Our members are the creative entrepreneurs behind the $3.2 billion Canadian film, TV and digital media industry.
The WGC is a small organization with a mandate to negotiate, enforce and administer collective agreements for our self-employed members. We also pursue, collect and disburse their royalties.
We resolve disputes on their working conditions, fees and writing credits. We undertake extensive policy projects and work closely with government agencies such as the CRTC to ensure that Canadians are provided with Canadian content programming.
As a small non-profit organization, the WGC is funded by union dues and other fees required by our agreements. We receive no government funding. We are self-governed by a council of elected volunteer members from every region of the country. Dues, rights and obligations are set out in our constitutional and bylaws. Members vote for their representatives, for their constitution and for their collective agreements.
We are also required to conduct yearly audits of our operations and circulate them to our members. Members have a voice through their elected representatives and their votes.
With these kinds of checks and balances already in place, what problem, then, is the bill looking to solve and at what cost?
The WGC is very concerned about the damage Bill C-377 will have on our ability to work for our members and the ability of our members to work. If this bill is passed by the Senate, it will harm our members in the following ways.
This bill will put small labour organizations like the Writers Guild of Canada and its members at a disadvantage if each disbursement over $5,000 is made public.
When we resolve disputes between engagers and writers in confidential settlements, other engagers will now know which writers have been compensated in the dispute and may blacklist them, restricting their ability to find work.
This bill will expose our collective bargaining strategies because we hire outside legal counsel to assist us with negotiations. We will lose all strategic positioning in collective bargaining when the parties on the other side can decode our plans by knowing with whom we consult. This will have direct fallout on our agreements and the scale fees screenwriters make. It tilts the playing field in the engagers' favour.
This bill, by requiring salary disclosures over $100,000, will hamper our ability to acquire and retain our talented and trained executive staff. As one of the smallest organizations in our industry, these disclosures will make it easier for larger players to entice WGC staff away.
Payments to almost every party we transact with, including the writers' insurance and retirement carrier, will be reportable, thereby exposing our members' income. Also, our landlord, our Internet provider and office cleaners, et cetera, will have their invoices disclosed for public scrutiny. Additionally, who would want to provide services to us when we are forced to collect intrusive information on their political and non-labour relations activities?
We are already stretched thin. This bill is punitive to us. If this legislation passes, we will have to spend significant resources out of our budget on new staff to gather and enter all the additional data required. We need to focus on tasks our members want us to do, not onerous reporting that we neither want nor need to do.
This bill will also place a significant cost on Canadian taxpayers who must pay for the database and compliance, which no one appears to be clamouring to do. This bill will not serve the public, only our opponents. We already are tasked to do the impossible at the CRTC to ensure that Canadians have Canadian programming on their screens. We are up against companies like Bell and Rogers that have deep pockets and teams of lawyers. We need to engage the expertise of regulatory lawyers and experienced accounting firms, some of whom will only work with us on a confidential basis, fearing repercussions — and those repercussions will come.
Without a doubt, broadcasters and telecommunications companies will search the new database to find out who we have engaged and for how much in order to thwart our efforts. This will result in a disservice to all Canadians and raze the landscape our members work in if they do not have our voice to protect them.
Please give consideration to revising this bill. It will harm union members instead of protecting them and needs to be significantly rethought.
Thank you for your time, and I look forward to your questions.
The Chair: Thank you.
Mr. Lee.
Ian Lee, Assistant Professor, Carleton University, as an individual: I thank the Senate committee today for the opportunity to appear before you and beside these distinguished witnesses.
However, in sharp contrast I must plead your indulgence for I am merely a dues paying rank and file union member who is a public servant in a public university. In short, I'm just a simple worker on the shop floor of the education factory, metaphorically speaking, so my views will likely be at sharp variance from those who operate at vastly more elevated levels at the very top, contra people such as myself at the bottom.
Quickly, I provide the following disclosures. I do not consult to anyone or anything anywhere — not corporations, not unions, not NGOs, not governments, not political parties, not persons.
Second, I'm not a registered or unregistered lobbyist.
Third, I have a zero financial investments anywhere, save my share of the pension fund at Carleton.
Fourth, I have published scholarly articles and op-eds on labour relations and specifically the public sector in Canada.
Fifth, and most importantly, I have been a dues paying member of CUASA, the faculty union, for 27 years. Moreover, I recently became a part-time regular on CBC's "The Exchange with Amanda Lang'' where I receive a very modest honorarium from which is deducted union dues for the communications union. Restated, I enjoy being a union working person so much that I belong to two unions.
I support Bill C-377 for two separate reasons. The first is fairness, which Liberal and former Liberal senators will strongly identify with in light of the Liberal leader's speech three days ago where he invoked fairness multiple times. The second is principles of democratic governance. Let's go back first to fairness.
Since the mid-1990s Ontario has forced — compelled by law — the disclosure of salaries over $100,000, not only of public servants but of people outside the public service of Ontario, including professors, teachers, instructors, health care workers, et cetera. This law was adopted at that time with strong support from the unions. I know; I was involved in the debate. I was there at the time, of course. As someone whose modest salary is disclosed annually, I find it utterly bizarre that the unions are fighting so hard to exempt themselves from the very disclosure they thought was so wonderful when they imposed it on me and many others in Ontario.
Perhaps as the late billionaire Leona Helmsley said, "only little people pay taxes.'' And possibly those opposed to Bill C-377 think that only little people should have salaries disclosed, but not important people at the top. As Napoleon said in Animal Farm, "All animals are equal, but some animals are more equal than others.''
Issue two is democratic governance. A very wise former Prime Minister, Jean Chrétien, banned corporate and union financial contributions to political parties, which I think was probably why he was so wise. Unfortunately in Ontario, my union dues can and are misappropriated against my will, and without my consent, to support causes and policies with which I do not agree, and I'm not the only one. Indeed, in the 2014 Ontario provincial election, unions spent more than all the political parties combined using my union dues and union dues of fellow workers to unfairly influence the election. This is terribly wrong, as the Ontario election commissioner stated in the latest report. If the Government of Ontario will not act to ban — not regulate — this behaviour, then in my view it's necessary to seek another path using disclosure through the Income Tax Act.
According to Finance Canada's annual tax expenditures, annual taxes foregone due to union dues deductibility is approaching $1 billion annually — a significant benefit — and unions themselves are free of taxation. If we're going to allow, as a matter of public policy, the misappropriation of union dues without the consent of the dues paying members, the very least that can be done is to compel the disclosure of this unacceptable anti-democratic behaviour.
I conclude by noting — and I say this with the greatest of delicacy and respect — that senators have developed a much deeper appreciation of the value of transparency due to the problems of Senate in the last two years. By analogy, union executives have operated behind closed doors in the dead of the night, with the lights off, with no scrutiny of the decisions concerning allocation of resources. However, unions are or should be understood, as with NGOs, to be very similar to publicly traded corporations because all three of these entities have a very large impact on the larger public far beyond the immediate stakeholders. They are not purely private organizations.
Senators have learned painfully the critical importance of disclosure. These very painful lessons should be applied to Bill C-377 and union transparency.
The Chair: Thank you professor.
We will begin with Senator Baker.
Senator Baker: Thank you to all of the witnesses who presented. I only have one question, and that's to the Privacy Commissioner. Before I ask it, I'd like to thank Ian Lee and Carleton University. He has made himself available to House of Commons committees and Senate committees over the years and contributed greatly to an understanding of legislation. I might add, however, that he neglected to mention that he is also a former banker. One can understand why we had many engaging conversations on the now infamous Baker-Lee debates nationally, and one can understand why we took differing positions after listening to his presentation this morning. But I congratulate and thank him for his continued assistance.
In view of the testimony given by a former justice of the Supreme Court of Canada before this committee concerning constitutionality and his bald statement that the Charter, as far as he could see, would not apply to this particular legislation, could the Privacy Commissioner verify to this committee that Canadians' privacy is protected by the Canadian Charter of Rights and Freedoms, specifically section 7, and 8 as well, and that it is not uncommon to see legislation challenged on the basis of privacy concerns violating section 7 after legislation is passed?
Mr. Therrien: I can certainly confirm that this legislation, as others, could be challenged under the Charter. You mentioned sections 7 and 8, which are generally relevant to privacy protection.
I would add — not to suggest that this is a foregone conclusion — that in this particular case, freedom of expression and freedom of association would also potentially be invoked by unions or others who would wish to challenge this legislation on grounds that the disclosure required by this bill would be a limit to their freedom of either association or expression.
Senator Baker: And you may be called as an intervener in those cases.
Mr. Therrien: It is certainly a possibility.
[Translation]
Senator Dagenais: I would like to congratulate Mr. Ian Lee for his courage, because he is the second member of the rank and file of unions whom we have heard from, after Mr. Pereira. We have heard from union presidents, ministers, lawyers, actuaries and leaders, and I was beginning to worry that omerta had infiltrated the unions.
Many witnesses wanted to reassure us by telling us that financial statements were issued to members or that they were available and could be consulted. That being said, how is it that the members of FTQ-Construction found out about irregularities and wrongdoing following hearings of the Charbonneau commission? They learned about this watching the hearings of the Charbonneau commission; not by studying the financial statements.
Ontario Provincial Police officers were also made aware of irregularities at the head of their union by the media. The media are the ones who informed them that the RCMP was investigating union leaders. That should not have happened. The financial statements were abundantly transparent. How is it that they did not see these problems in the financial statements? I have been asking myself that question, and I would like to hear from the witnesses on the issue. Everyone says that there is no problem, that the financial statements are given to members. However, when there are irregularities, we hear about them in commissions of inquiry or in the newspapers.
[English]
Mr. Lee: I want to deal with that because probably most of the people in this room are not unionized or haven't been for a very long time. Secondly, you may not be extremely familiar with financial statements, and as Senator Baker correctly pointed out, I was a banker for nine years, just up the street at 144 Wellington, the building that's been appropriated by Parliament, I understand, to become, I believe, the home of the Finance Committee.
Financial statements are highly aggregated. They do not break it down. There are literally five or six or seven line items on the income statement, and they're so aggregated as to be virtually meaningless. Yes, of course, they're audited, which assures they were done according to Generally Accepted Accounting Principles, but as a disclosure document, they're completely inadequate. I'm saying that as a former banker, as somebody who has been teaching this stuff in a business school for the past 27 years and as somebody who has attempted with great difficulty, by the way, to obtain the financial statements of unions for research purposes.
The unions brag that it's available to all the members, but they erect barriers. I'm not speaking for all unions; I'm just talking about my own experience. Yes, if you make an appointment three weeks later at a certain time of the day — but that's not transparency. Transparency means it's on the website, just like publicly traded corporations, which I and my students use in our research, so anyone can look them up. That's transparency.
This is fake transparency, when you have to make an appointment like a doctor to look at financial statements for your membership dues. That's what's outrageous and that's the reform that's needed. Unfortunately, Ontario won't move on this.
[Translation]
Senator Dagenais: Thank you very much, Mr. Lee. I like your response a great deal.
[English]
Senator Ringuette: I have one question for Mr. Therrien. Thank you for being here. You essentially voice the same opinion as your predecessor, Ms. Stoddart.
I looked at the Privacy Act in regard to this, and I see that there would be a two-step requirement of consent. The first would be that the union would need consent from the individual to supply the information to the CRA, and then the CRA, via the Minister of National Revenue, would require getting a second consent in order to make that public. This is a two-step process, and each step, from my perspective, would require consent of the individual.
Mr. Therrien: The consent you're referring to would be generally applicable to the disclosure of personal information relating to an individual.
My understanding of this bill, though, is that it would create stand-alone legislation, which would disclose, without consent of the individuals concerned, the highest paid officers of unions, those who are involved in certain transactions for services, lobbying, et cetera. This would be done without consent.
As a matter of statutory interpretation and relationship between this bill, if adopted, and the Privacy Act, I think that Bill C-377 would prevail and that any consent requirements that would apply under the privacy legislation would be set aside.
As a matter of constitutional law, there was a question earlier as to whether these disclosure requirements might infringe on constitutional privacy rights, and I added freedom of association in particular, because we're talking about unions. That's a different matter.
So there are two levels. At the statutory level, Bill C-377 would prevail, in my view, subject to constitutional challenges.
Senator Ringuette: Thank you.
The issue of aggregate in regard to disclosure has been brought forth, and I'm trying to remember if political parties report to the CRA in an aggregate form or not.
Mr. Lee, maybe you can provide us with that information?
Mr. Lee: I haven't looked at political parties.
Senator Ringuette: Thank you.
[Translation]
Senator McIntyre: Mr. Therrien, I would like to raise two small points with you. First of all, thank you for your presentation.
As you know, amendments were passed by the House of Commons and have been integrated into Bill C-377. Some of the amendments concern privacy. For example, the pension plans, health insurance plans and other regulated plans will not have to declare the benefits paid to participants. I understand that personal addresses will not be required either. In addition, union employees who earn less than $100,000 will not be identified unless they act in management positions.
My second point is this: if I understand correctly, according to former Privacy Commissioner Ms. Jennifer Stoddart, Bill C-377 does not constitute an invasion of privacy. Could I have your comments on these two points please?
Mr. Therrien: With respect to the first point, you are referring to amendments that make improvements in terms of privacy. However, by requiring the publication of certain salaries or certain transactions above a certain amount, is it possible to achieve transparency for unions and their leaders, who would publish this type of information, but in an aggregated way, so that union members and taxpayers could be made aware of the salaries paid and the activities of union leaders, without being able to attribute this information to individuals in particular? My main point is that a balance should be struck between transparency, which is an important value, and privacy, which is a value that is just as important. Is it important to name people, in the type of information published, to achieve transparency? It is no doubt possible to achieve transparency by publishing information in aggregate form. That is the recommendation that I would make to the committee.
With respect to the invasion of privacy, I believe that Ms. Stoddart gave an answer that was similar to the one that I gave to a question asked by Senator Ringuette, which —
Senator McIntyre: There was no conflict with the legislation.
Mr. Therrien: There was no conflict with the statutory law. I mentioned the Privacy Act, and we spoke about PIPEDA. Bill C-377 would override these other pieces of legislation. In this respect, it would be the existing law, subject to constitutional challenges.
Senator McIntyre: Thank you, Mr. Therrien, for these clarifications.
[English]
Senator Jaffer: Thank you all for your presentations. I have two questions. One is for the minister.
Minister, you have now had an opportunity to study this bill, and obviously you looked at the regime that exists in your province. Are you satisfied with the accountability and transparency that unions have in your province?
Mr. Flynn: Thank you for the question, senator. The answer would be, yes, I am.
We had something fairly similar to this. I don't think it was as severe as the proposition you have before you, but we had something in the Province of Ontario that came into effect in the 1990s, I think, and it imposed some disclosure requirements on unions. We found it was completely unnecessary. We found that existing rules and legislation we have in place in the Province of Ontario that involves our labour relations board was more than adequate to deal with the handful of complaints that came forward. They were dealt with by the OLRB, the labour relations board, in a way that satisfied the union members.
The proposal we had in place in 2005 was repealed because, simply, it was just a duplication of a process that was working in any event.
We just think that this is an unnecessary intrusion. We have tough economic times in the province of Ontario, the same as the rest of the country, perhaps not as tough as others but tough nonetheless. We need government, business and labour to be working together. This just intervenes in a way that doesn't add any value to that proposition.
Senator Jaffer: I have a question for you, Mr. Therrien. Do you know if there is any other group, institution or organization whose privacy rights are so invaded as this bill sets out? What I mean by that is somewhere where a person would have to do a statement of the hours that they have worked for political activities, for what they have done in non-labour relations activities, for community work they have done, being a Boy Scout leader. They would have to set all of that out. Have you seen those kinds of privacy rights being dealt with in any other legislation, and how do you feel about this?
Mr. Therrien: I have not in terms of Canadian legislation, for sure. Some of this information, particularly involvement in political activities, is extremely sensitive. That's why we have privacy laws in Canada. So I am very concerned about that type of disclosure being required by this bill.
Senator Plett: Professor Lee, Senator Baker usually starts off his questioning with congratulating everybody on their excellent testimony, and I know he just simply forgot, when he talked to you, about congratulating you for your excellent testimony. So I want to do that. Thank you for your excellent testimony, sir.
I do have a question or two for you. We had a witness here earlier today, Mr. Dias, who said that his union was going to make every effort to combine to defeat the present Conservative government.
Premier Greg Selinger is the premier of my province because unions helped him to win the leadership, using union dues to do that.
I would suggest that Minister Flynn is the Minister of Labour in Ontario because unions helped him become the Minister of Labour in Ontario.
The Charbonneau commission clearly is there as a result of issues with unions. The Ontario police union is now under investigation.
If unions are using taxpayers' dollars to do all of this, should they not be transparent in disclosing how they use that? And is it appropriate for unions to spend more than all political parties combined, as they did in the last Ontario election, to win for the Ontario Liberals? Why is there no limit on third party spending as there is in other jurisdictions? All of this, of course, is using union dollars. Would you comment on some of that?
Mr. Lee: I'll be brief, but in my presentation this was my point. It not only involves taxpayer funds, but it involves the funds of individual Canadians, in my instance, people in Ontario. I support collective bargaining. I support the Rand formula, and I want them to deal with what they are supposed to, which is bread-and-butter issues at the bargaining table. That's what unions were set up to do. When they start getting involved in election campaigns, you immediately have the representation problem in that not everyone in that union supports that one party. You have a clear division across the union membership, just as you do in the general population. Some support the Liberals, some support the NDP and so forth. So that's why there's a fairness issue, and then there is the issue that you raised.
I want to make one more point very quickly that I didn't have time to put in my opening comments. In many Western OECD countries, this disclosure that is proposed in Bill C-377 is common, starting with the United States of America.
The final point I want to quickly make, because I know there is a lot of discussion about privacy, is that I don't understand why Ontario is disclosing the salaries of hundreds of thousands of people if it really is a serious problem. Secondly, salaries are disclosed under the corporate disclosure laws for publicly traded companies in both Canada and the U.S. Clearly, it is legally permissible in certain situations and contexts to disclose the salaries of some people because it is being done in Ontario, in Canada, in the United States.
Senator Plett: Thank you.
Senator Joyal: Mr. Minister, welcome. I would like to come back to the fifth point in your presentation that dealt with the constitutionality of Bill C-377. You referred to the case of Snider and Northern Telecom, which are very famous cases and taught in law schools all over the country. Have you had the benefit of a legal opinion from your own department in preparing your presentation?
Mr. Flynn: Thank you, senator, for the question.
Yes, this obviously has been a point of discussion around the Ministry of Labour. When we looked forward to the bill and this presentation, something that we took very seriously was the constitutionality of it.
While I'm not a lawyer myself and rely on the expertise of others, it appears to me, from the research we've been able to do, that should this bill move forward, its constitutionality will certainly be challenged. That's what I was saying in my opening remarks. It appears that, were this bill to be successful, it would lead to costly litigation well off into the future that is going to cost unions, governments and taxpayers a lost unnecessary money.
Senator Joyal: You also mentioned the breach of freedoms of expression and of association, which are clearly Charter protected rights. Would it be the position of the Ontario government at this stage to intervene in any challenge on the constitutionality or Charter breach of Bill C-377?
Mr. Flynn: Well, as the Minister of Labour for the Province of Ontario, obviously if this bill were to be successful I would have some very hard questions for the labour experts and lawyers that associate within our ministry. Certainly if we thought that there was intrusion into an area that clearly has been outlined as provincial jurisdiction, I believe you would see some action on behalf of the government.
Senator Joyal: Thank you, Mr. Minister.
Mr. Therrien, I would like to come back to your presentation. In reading Bill C-377, some of the disclosure that is requested relates to — and I quote the bill — "other non-labour relations activities.'' It could be family activities. It could be other professional activities that have nothing to do with labour. Does the bill, in your opinion, go beyond what is acceptable in terms of privacy?
Mr. Therrien: I think it goes too far. I think accountability is an important principle that perhaps justifies the disclosure of some information, for instance, the salaries of the highest paid union leaders, but it goes too far, I think, in requiring the disclosure of non-union activities, such as those that you mentioned, and political activities, lobbying activities. I think in that way it goes too far.
Senator Joyal: In other words, the bill would clearly be in breach of the Canadian legislation in relation to that.
Mr. Therrien: From a policy perspective, it would be a bill that would go too far in terms of having a notion of accountability prevail over privacy.
Would it be constitutionally deficient? I think, as many others have said, it would most clearly be challenged, and we would have to see how the courts would react. But from at least a policy perspective in terms of what Parliament should adopt that strikes the right balance between these two important values, I think the balance would not be right.
Senator Joyal: So in the context that, as Minister Flynn has been mentioning, this bill would move forward in the present form, would it be your position that you would seek intervention to state the principle that you just mentioned to us?
Mr. Therrien: We sometimes intervene in court. Private parties can do that. We would have to assess this when the time comes, but it's certainly a possibility that we would intervene, yes.
Senator Joyal: The bill also, of course, compels those who provide services to a union to disclose. We go a circle further, I would say, into the core of the information that could be made available for any members or the public to view. In that context, don't you think that this is going much beyond the balance of transparency and the protection of privacy that should be enshrined in the bill?
Mr. Therrien: Yes. That was part of my submission. In short, my answer to your question is yes.
Senator Batters: Mr. Lee, welcome back to our committee. I would have loved to see those Baker-Lee debates, I have to say, and I think only you could work Napoleon and Leona Helmsley into the same opening statement. That takes some talent.
As a dues payer in your faculty association, would it be valuable to you to not only understand what your dues are being spent on, for example, your association's executive, but also how your executives are spending the time they are being paid for, including the already-defined terms — political activities, lobbying activities and non-labour relations activities?
Mr. Lee: Absolutely. That's why the provision — and I'm not discrediting audited financial statements. They're a very important tool. They're used by banks, Crown corporations and so forth. They're very important, but they're very aggregated and very high level. Without getting into the weeds, they don't provide the depth and breadth of information that internal management accounting does. Financial accounting is for outsiders, outside stakeholders. Management accounting provides vastly greater and much more in-depth data and analysis for inside stakeholders, for the CFO, the chief financial officer, or the deputy minister in a government.
When the Government of Ontario — and I'm not picking on this minister but just the government generally — says, "Look, we've got disclosure and we've got financial statements,'' that's for outside people. That's for external stakeholders — bankers, if the union is borrowing money, for example, or to fulfill a reporting requirement to the Government of Ontario. But the inside stakeholders called "us,'' the owners, the dues payers, should have much greater information than the outside stakeholders, and we cannot get that information even though it's our money coming off our paycheques.
Senator Batters: Absolutely. And other —
Mr. Lee: I fight all the time, I assure you.
Senator Batters: Senator Ringuette, it's my turn.
The Chair: Senator Batters has the floor.
Senator Batters: I also wanted to get on the record that under Bill C-377, unions do only have to disclose the percentage of the time spent on political and non-labour relations activities and only during the hours of employment. Isn't that correct?
Mr. Lee: That's my understanding yes.
Senator Batters: Thank you.
Senator Cowan: I have just a clarification. I didn't have a question for the witnesses, but it arises out of the point that Senator Plett made at the end with respect to the point made by Minister Regan as to the amendment that was made in the house. I just wanted to read in the record the amendment, the exemption. It says:
(b) a labour trust the activities and operations of which are limited exclusively to the administration, management or investments of a deferred profit sharing plan, an employee life and health trust, a group sickness or accident insurance plan, a group term life insurance policy, a private health services plan, a registered pension plan or a supplementary unemployment benefit plan.
I did have an email from Mr. Hunter following that which said that that was the point of his testimony, and he thought the concerns that Minister Regan expressed with respect to the disclosure of the death benefit she received following her first husband's death were warranted. I just wanted to put that on the record.
[Translation]
Senator Dagenais: I would like to address a comment to Mr. Flynn. You seem like a very nice minister. As the former president of the Association des policiers provinciaux du Québec, I can confirm that it was not always easy to negotiate with some ministers. I would have certainly liked to deal with you during negotiations.
Mr. Therrien, I would like you to take note of the decision by Justice Bastarache that the legislation is not unconstitutional. I do not know if I misunderstood, but you said that the bill could be challenged, that it could be unconstitutional. Justice Bastarache took the time to thoroughly examine the issue and he was very clear: the bill is not unconstitutional and does not harm union activities. I would simply invite you to read his decision.
[English]
The Chair: That was simply a comment.
Senator Ringuette, a very quick question.
Senator Ringuette: I have a technical question to Mr. Lee.
Since you're in two unions, this bill would require divulging political activities for each member. In your case, to which union, or would it have to be to both unions, would your breakfast fundraising for Mr. Poilievre in the region fall under?
Mr. Lee: That is a good question. I don't do any fundraising. I don't belong to any political party, nor do I donate any money to any political party. No, I don't. I don't.
The Chair: That wraps it up. I want to thank all of our witnesses for their time and their contributions to our deliberations. It is very much appreciated.
(The committee adjourned.)