THE STANDING SENATE COMMITTEE ON LEGAL AND CONSTITUTIONAL AFFAIRS
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.
SenatorBob Runciman (Chair)
in the chair.
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 thenational 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
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
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.
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
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
Mr. Dias: I've got five minutes; I've got
ten minutes worth of comments.
The Chair: The interpreters are having a
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 377 only
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
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
For all these reasons, in addition to the many
put forward by other witnesses, we urge you to reject this piece of
The Chair: Thank you.
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
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
. . . 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.
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
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
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: 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?
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.
Senator Dagenais: When you have two lawyers
in the same room, you can get two different opinions. Thank you for your
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
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
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
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
Senator Plett: My questions are for Mr.
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
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
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
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.
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
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
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.
Senator Boisvenu: I know that unions inform
Mr. Dias: I'm getting there; let me answer
Senator Boisvenu: I want to know if the
information should go beyond the members, and if it should be open to all
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
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
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
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
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: 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
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
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
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, MLA, 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
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
With that, I will conclude my comments and take
any questions you may have.
The Chair: Thank you very much.
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
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
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
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
The Chair: I will have to ask you to wrap
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.
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
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.
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
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
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
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
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
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
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
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.
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?
Mr. Hunter: Yes, that's correct.
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
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.
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?
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
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
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
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
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
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
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
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,
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
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
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
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
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
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 theCanadian Charter of Rights and
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?
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
Thank you all for being here. We will begin
with Commissioner Therrien, followed by Mr. Flynn, Ms. Channer and Professor
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
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
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.
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.
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
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
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.
The Chair: Thank you, Mr. Minister.
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
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
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
Thank you for your time, and I look forward to
The Chair: Thank you.
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
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
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
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
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
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.
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.
Senator Dagenais: Thank you very much, Mr.
Lee. I like your response a great deal.
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
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
Mr. Lee: I haven't looked at political
Senator Ringuette: Thank you.
Senator McIntyre: Mr. Therrien, I would
like to raise two small points with you. First of all, thank you for your
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.
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
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
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
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
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
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
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
Senator Batters: Senator Ringuette, it's my
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.
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.
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.