Private member’s bill would force unions to file yearly financial statements with CRA
A private member’s bill that would force unions to publicly disclose extensive internal information would be both costly and burdensome for unions, says the Canadian Labour Congress (CLC) and several Canadian unions.
It’s a claim disputed by the author of the bill, Conservative MP Russ Hiebert, who says that information is already being kept by unions and needs only to be reported.
The proposed legislation is necessary to offer public transparency into how unions spend money since they receive tax breaks that, according to him, cost Ottawa $500 million in foregone revenues a year, he says.
The bill would force unions to file annual financial statements with the Canada Revenue Agency (CRA), something they do not do currently, which would then be made available publicly online.
Under the bill, unions would lose their tax exempt status if they failed to disclose transactions greater than $5,000, as well as the following information:
• the status of accounts receivable and loans payable;
• the sale and or purchase of investments and fixed assets, including a description, cost outline, book value and sale price;
• the salaries, benefits, bonuses and gifts given to officers, directors, trustees, employees and contractors;
• the costs related to labour relations activities, political activities and lobbying;
• the costs of contributions, gifts and grants;
• costs relating to conferences and conventions; and
• the names and addresses of people involved in these transactions.
Unions have accused the Conservatives of using the legislation to muzzle trade unions, and have called the bill a transparent attack on unions and on free speech.
“The CRA will have to invest millions of dollars to hire staff, set up a website and oversee compliance of legislation which isn’t needed in the first place,” says CLC president Ken Georgetti. “The federal government’s cost meter is ticking.”
So is the cost to individual unions, according to Robert Blakely, director of Canadian affairs with the Building and Construction Trades Department.
The bill requires more information than is contained in typical financial statements, as well as segregated accounting, he says.
“This requires new software and hundreds of person hours to sort it all out,” he adds. “Unions do not track all of this information. It’s complete and utter rubbish.”
Professional accountants have told his organization that complying with the bill will add 20 per cent to their budget annually in software, professional fees and employee costs to compile the information, Blakely says.
He points to a Vancouver sheet metal workers local that will be required to report 19 new categories and an Edmonton pipefitter’s local that expects it will have to report an additional 17 categories.
Many unions will have to either increase dues or offer fewer services to members to afford additional employees to meet the requirements that could take more than 500 hours of staff time to complete, Blakely says.
Hiebert accuses unions of exaggerating the cost of compliance.
The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), which represents 56 unions and 12 million unionized Americans, predicted it would cost US$1 million a year to move to similar online disclosure in the United States about a decade ago, Hiebert says.
In reality, that cost was closer to US$55,000, he adds.
“Many software applications now incorporate these disclosure requirements,” he says. “And with electronic filing, there won’t be any cost.”
Several union leaders, including Georgetti, argue this information is already available to members and question the need for more detailed information to be made public.
Only some provincial labour codes, such as those in Ontario and Quebec, require disclosure, says Norma Kozhaya, a researcher with the Quebec Employers Council.
“And when these statements are available, which is rarely the case, (this information) is not always there,” she says. “One important thing would be to distinguish between what spending relates to labour relations and what doesn’t.”
The other significant change for unions under the bill would be the disclosure of public information.
The Canadian Bar Association (CBA) has expressed concern that the bill requires unions to make details of salary benefits for union officers, trustees, employees and contractors public, as well as information about their political activities or political beliefs.
In a letter to the finance committee, the CBA wrote that “the bill lacks an appropriate balance between any legitimate public goals and respect for privacy interests protected by law.”
The benefit plans union members belong to are already subject to disclosure rules, says Michael Mazzuca, chair of the CBA’s pension and benefits law section. Only those with a “true interest” — such as plan members — should have access to that information, he says.
Charities, which must disclose their financial statements publicly, are subject only to aggregate reporting, not the specific details being called for in C-377, he notes.
