Russ’ Speech at Report Stage

Mr. Speaker,

It is a pleasure to rise today to address Report Stage of my Private Members Bill, C-377, and the amendments I have tabled to improve the bill.  I want to thank you, Mr. Speaker, for allowing my amendments to stand.

I have to say it was disappointing to see the shameful tactics of the NDP in the Finance Committee and their attempt to shut down debate and prevent these amendments from coming forward.

This is a bill that reflects the transparency that 83% of Canadians say they want to see from labour organizations.

Nevertheless, the parliamentary process is a robust process and despite the NDP’s efforts to prevent improving Bill C-377 for the benefit of labour organizations and all Canadians, the amendments I proposed are moving forward, again.

There are a number of benefits to my amendments Mr. Speaker, and before I mention each of the individual changes in the bill, I’m going to highlight a few major areas of improvement in particular.

First, there are several amendments that address the issue of privacy.

Over the course of the last year, I heard from a number of groups and individuals concerned about how various aspects of the bill might affect them.

In particular, my amendments eliminate any uncertainty about the fact that pension plans, health benefit plans and other regulated plans will not be required to report under C-377 and that benefit payments to individuals from such registered plans will not be reportable.

Let me be clear that it was never my intent that registered pension plans or health insurance plans should be reporting, or that the pension or health benefit payments that workers or their families receive would be published. 

Regardless, the amendments before the House offer greater clarity that regulated plans listed in the amendment will not report, nor will payments from those plans to individuals will be reportable under C-377.

I have also removed home addresses from the reporting requirements.

This change was particularly important to those who serve in labour organizations, particularly for police, and I appreciate the input I received from the Canadian Police Association on the importance of this change.

Additionally, union employees earning less than $100,000 annually will not be identified unless they are in a position of authority.

Mr. Speaker, you will note that the $100,000 reporting requirement reflects similar legislation that has long existed inCanada, such asOntario’s ‘Sunshine’ legislation for the public service.

The second major area of change is in the area of cost savings to government.

The opposition has been making much of the Canada Revenue Agency’s report to the Finance Committee on its estimates of the costs of implementing Bill C-377.

Of course, Mr. Speaker, those cost estimates were based on an un-amended Bill C-377.

I have determined that significant cost-savings will be achieved by removing the requirement that searches of the union disclosure data be subject to ‘cross-referencing’ and by requiring that all filings be electronic, eliminating paper filings.

Apparently, ‘cross-referencing’ is a feature that can substantially increase the cost of developing databases.

While this is a feature that some government websites certainly offer, and it may become a standard feature on such sites in years to come, I am not interested in driving up costs for the CRA just to have this feature, at this time.

Of course, requiring paperless filings can easily be seen to ensure savings.

There will be no need for clerical help to transcribe filings into a useable electronic format.

And, the CRA can take the filing data and post it on the website easily.

These two changes will reduce the CRA’s costs substantially.

Indeed, CRA has confirmed that the estimated start-up costs of implementing Bill C-377 with my amendments will be less than a quarter of what they would have been, and the ongoing costs will be less than half what they previously estimated.

A third area of change that my amendments will foster is in what will be reported.

There are two significant changes here.

The first is that less will be required to be reported about a union’s core labour relations activities.

Instead of providing details of spending over $5,000 on such activities as organizing or collective bargaining, an aggregate figure only will need to be reported.

This reduction in the level of reporting detail required should lower the cost to labour organizations of complying with C-377.

Second, for transactions where there is a potential for a conflict of interest – a so-called related party transaction – there will be full reporting on the details of those transactions.

An example of a related party transaction might be when a labour organization buys a parcel of land from one of its directors.

Bill C-377 does not comment on the appropriateness of any such transaction – it merely requires that it be reported.

I believe everyone will agree that full transparency is called for when it comes to related-party transactions.

Now, Mr. Speaker, I’d like to address a few issues that have been raised by critics of the bill during its committee consideration and elsewhere.

First, critics have asked, ‘Why should the general public be able to see the financials of unions they are not members of or contributing dues to?’

As you know, Mr. Speaker, labour organizations operate tax-free, and their members receive full income tax deductibility for their dues payments, and receive their strike pay tax-free.

Dues deductibility alone costs the federal treasury in the range of half a billion dollars a year.

I believe there is a genuine public purpose served by requiring financial transparency in all institutions that receive a substantial public benefit: We do it in government, in crown corporations, in charities and most recently on native reserves.

Now we’re extending transparency to another set of institutions that enjoy public benefits – labour organizations.

Second, critics have said $1,000 a day fines seem designed to punish unions.

Compliance with C-377 will not be an onerous burden but there has to be a deterrent for non-compliance, as the Official Opposition already implicitly recognizes.

In the present Parliament, Bill C-205, in the name of the NDP MP for Hamilton Mountain, seeks to impose a fine of one thousand dollars per day for non-compliance with a new section of the Canada Labour Code.

This is the precise amount of the fine in my own bill.

The (NDP) cannot have it both ways.

Third, critics have suggested that, other than their tax-free status, labour organizations don’t actually receive any special subsidies or public dollars.

Rather, it is their members that do.

While it is correct that many of the benefits accorded to labour organizations under the Income Tax Act such as dues deductibility are indirect, rather than direct benefits, the effect is still the same – the benefits were created to support and maintain labour organizations.

The same is true of charities.

Charities also do not receive public dollars or special subsidies.

Instead, a direct tax benefit is given to donors, and that benefit was clearly created for the purpose of supporting and maintaining charities.

And, just as it is legitimate to ask charities to publicly disclose how they spend the money that is ultimately derived from this public benefit, it is just as legitimate to ask labour organizations to do the same.

Fourth, a few have suggested C-377 will place unions at a disadvantage in labour negotiations, given that management will know details about the union’s finances and its ability to sustain a strike.

However, Mr. Speaker it is obvious that the willingness of workers to withdraw their labour in a bargaining dispute is based on far more important considerations than simply the amount of cash in the strike pay fund.

The fact is, American and British unions, and for that matter a good number of Canadian unions which are already required to report in the US, have lived with financial transparency for a long time and it does not appear to have affected their ability to bargain effectively.

Another criticism sometimes levelled against C-377 is that the list of financial items a labour organization must report is larger than that required of charities.

It is true that the list of statements that a labour organization would file is longer than that of charities, but this simply recognizes the fact that labour organizations are often more complex financial organizations that may administer a wide range of funds for activities such as training, education and so on.

Finally, some critics say C-377 is unconstitutional.

The bill nominally amends the Income Tax Act, but its real purpose is to regulate labour organizations, which is sometimes a provincial matter.

That is simply inaccurate: this bill does not regulate labour organizations and it does not tell them how to spend their money.

In fact, in requiring labour organizations to file a report with the CRA, my bill does not even require an audit.

What this bill does do is amend a federal statute, namely the Income Tax Act.

The bill is only concerned with matters that already fall under the Income Tax Act and have long been constitutional, namely the filing of financial information and the publication of data.

I would refer any critics to the existing sections of the Income Tax Act on charities and public disclosure which have existed for 35 years and which no one doubts are constitutional.

I hope all Members will consider how the amendments I’ve put forward will improve Bill C-377 and support these amendments and the bill when they come to a vote.

Thank you Mr. Speaker.