Mixed labour reaction to union disclosure bill passage

Bill C-377, An Act to Amend the Income Tax Act (requirements for labour organizations), has passed in the House of Commons, further dividing union and open shop organizations in the Canadian construction industry.

“We were very pleased that the government passed the legislation, we had been making the case why it was needed and why it is important for almost a year now,” said Merit Canada president Terrance Oakey. “It is recognition that union leaders are obliged to be accountable for very generous benefits provided at public expense.”

The federal Building Trades believe otherwise.

“I spent most of last night working on the appropriate venue to challenge the bill when it actually is passed into law,” said Bob Blakely, director of Canadian Affairs for the Building and Construction Trades Department, on Dec. 13, the day after the House of Commons voted 147 to 135 in favour of the bill.

The bill will require public disclosure of the finances of labour organizations, including unions, which would then be publicly posted on the Canada Revenue Agency website. This includes disclosing where unions spend their dues, salaries and other political activities. This is similar to what registered charities are required to do.

Several amendments were made to the bill before it passed, including keeping some personal information from public view for privacy reasons and removing provisions dealing with pensions.

Oakey pointed out that union disclosure is the norm in many countries.

“Labour organizations in Canada receive hundreds of millions of dollars in tax treatment and about four to five billion dollars in contributions that are done in a non-voluntary way, we think that requires disclosure,” he said.

The Canadian Building Trades Unions said the impacts from Bill C-377 will endanger workers’ ability to build projects across the country and create jobs as workers rely on unions to provide necessary benefits and training with the dues they pay.

With the law in place, that money would be spent on creating more government bureaucracy, says the Building Trades.

It said the bill is intended to fix a problem that doesn’t exist and that it duplicates processes that are already in place to provide accountability and transparency for workers, and would create an expanded, expensive and redundant bureaucracy.

“If you look at the stuff that is in the bill, that is not the material that you would ordinarily find in a financial statement. Yes, you may have some of that in your financial records, but you have to correlate it all,” said Blakely.

Advocates for the bill say that 83 per cent of Canadians indicate they want see transparency from labour organizations.

“Transparency and accountability are fundamental to democracy. If unions want to enjoy the dual benefits of mandatory dues collection and beneficial tax treatment, then they need to earn it,” said Oakey.

Despite the amendments, Blakely said the privacy concerns have not gone away.

“The privacy stuff is going to cost us money because there are going to be people who don’t want to have their private information disclosed so you’ve left our unions in the position of deciding which law they’re going to break, the privacy law or the income tax act.”

Oakey said the bill’s requirements are not new to the Building Trades, as they have to comply with this type of legislation in the United States.

“They’ve been able to operate in the United States with no competitive disadvantage, none of the other issues that they’ve raised with 377. They operate in the United States in a very open and transparent manner,” he said. “I think overall it’s good public policy, I don’t think it’ll have an impact on the day to day operations. It’s a broader issue than specifically to any member company.”

The bill will now have to be passed by the Senate and Blakely has vowed to take the Building Trades’ campaign to the Senate.

“We’re not going to give up,” he said.

Blakely said the bill’s passing is going to politicize building trades unions, to some degree.

“We have never really been involved in the electoral political process at all…we work with the government of the day. We’ve never had a government that’s reached out to try and actually emasculate us before.”

According to the Canada Revenue Agency, the new systems needed for the bill won’t be ready until 2015.