Senate passes union finance disclosure bill

Organized labour plans to legally challenge Bill C-377

On the night before breaking for summer, Canadian senators passed a union finance disclosure bill, much to the chagrin of organized labour.

On June 30, the Senate voted 35-22 to pass Bill C-377, a private member’s bill they had initially rejected from the House of Commons two years prior.

Under the new legislation, the Income Tax Act would be amended so unions would be forced to publicly disclose any spending of more than $5,000, and divulge which officers or employees earn more than $100,000 a year.

The information provided to the Canada Revenue Agency would then be posted on its website.

The bill, according to its creator Russ Hiebert, a Conservative backbencher and MP for Surrey, B.C., is aimed at increasing transparency and accountability.

"The whole purpose of the bill is to allow the public to gauge the health and effectiveness of these institutions," he said. "In light of the fact that we provide national benefits to them, in the form of tax deductibility — unions operate tax-free — so I’m optimistic that with these disclosures… we will hopefully build confidence."

But Bill C-377 has raised the ire of organized labour and has unions denouncing the legislation as a union-busting attack.

According to the Canadian Labour Congress (CLC), the move was another attack on the labour movement by Prime Minister Stephen Harper’s Conservatives.

Hassan Yussuff, president of the CLC, said C-377 has little to do with transparency and more to do with weakening labour, calling Hiebert’s argument "phony."

"At the end of the day, are we displeased? Yes," Yussuff said, adding that the bill will result in more red tape and divert time and resources to produce expense reports.

"Fundamentally, we believe our members are entitled to financial information from their union — but that’s our members who are entitled to that information. If you do not belong to our organization, it’s none of your business, to be honest with you," he said.

Unions, like business or corporations, should be treated as democratic, private entities that are only accountable to members, he said.

"Are the enemies of the labour movement entitled to have information about the labour movement, so that information can be used to bring harm and try to weaken the labour movement? We don’t believe so," Yussuff said.

But Hiebert denied any purported attack on labour.

Instead, he maintained the changes will provide the same transparency Canadians have grown accustomed to for First Nations, Crown corporations and charities.

Because the new rules were modelled after U.S. law, any changes should be well-received, Hiebert said. Unions south of the border must report similar financial information to the U.S. Department of Labor, and that includes Canadian or international unions that are affiliated with American unions or companies.

"It’s disingenuous for (unions) to suggest that this is an attack, when they’ve been living with this disclosure for a very long time in the United States," Hiebert said.

"If it’s such a problem, then why are they not fighting the U.S. Department of Labor?... Now, all unions will have to disclose this information — but to a Canadian authority."

Constitutional challenge

The road leading up to the somewhat hurried passage of Bill C-377 could have something to do with its constitutional viability, something that raised the eyebrows of certain senators during the debate.

From a legal perspective, the legislation is unconstitutional on two levels, according to Paul Cavalluzzo, a labour lawyer in Toronto who denounced the bill when he addressed the Senate earlier this spring.

He said the constitutional challenge is two-fold. First, the bill could be tested against freedom of association rights under the Charter of Rights and Freedoms. As well, it raises concerns over division of powers with the provinces.

"It is clearly unconstitutional as far as provincial unions are concerned, because the legislation essentially deals with the regulation of trade unions, and under our constitution system, labour relations, generally speaking, falls within provincial jurisdiction," Cavalluzzo said in an interview.

That C-377 was passed via unorthodox methods is further muddling the matter. The Tories used their majority to overrule the Senate speaker — who had ruled against the government’s motion to forego the debate — and force a final vote.

"There’s no question it’s a political attack on unions — and why the government had it passed illegally, contrary to Senate rules, is because it wanted to have it on its election plan," Cavalluzzo said. "It has absolutely no substance to it."

Yussuff said C-377 will have to stand on many fronts, and confirmed the CLC intends to legally challenge the legislation.

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