Bill C-377 is Just Bad Legislation
Nov 01, 2012
377, association, bar, gdp, trust
Bill C-377 – An Act to amend the Income Tax Act (requirements for labour organizations) will enter third reading soon. If it becomes law, it will force unions to provide an onerous level of detailed financial disclosure about their work on behalf of their members.
Under the bill, every labour organization (local union, labour council, branch, lodge) and every labour trust (pension plan, benevolent fund, training fund, and health and welfare fund) would be required to file a public information return with the Canada Revenue Agency. It requires all unions and each of their locals, area councils, etc. to disclose detailed financial information, salaries, supplier contracts, loans, accounts receivables, investments, and spending on organizing, collective bargaining, education and training, lobbying and all political activities.
As outlined in an earlier blog, the legislation would apply to all national, international, and regional unions, components and local unions along with Federations of Labour and Labour Councils – approximately 25,000 organizations in total. All of this information gathered would then be made available on a federal government website. Failure to comply with the legislation would mean a fine of $1000 for each day not in compliance.
Recently, the Canadian Bar Association (CBA) wrote an open letter to MP James Rajotte, Chair of the Standing Committee on Finance. In it, the CBA lists a litany of reasons why the Bill is a particularly bad piece of legislation.
Perhaps most tellingly, the letter opens by stating that “...it is unclear what issue or perceived problem the Bill is intended to address.” The CBA then points out that a bill that will have a significant impact on labour organizations is oddly embedded in amendments to the Income Tax Act.
The CBA first takes aim at their privacy concerns with regard to the Bill. It notes that it would oblige the disclosure of financial information “which is normally considered among the most sensitive” and could result in “a direct privacy impact.”
Without greater clarity on the “problem” the Bill is designed to address, the Bill “lacks an appropriate balance between any legitimate public goals and respect for privacy interests protected by law.” And in a most direct statement, the CBA says that the Bill “appears to directly target activities protected by the Canadian Charter of Rights and Freedoms by requiring disclosure of time spent on political activity.” Given that privacy is recognized as a fundamental constitutional right under Canadian law, the Bill has the potential to invite constitutional challenge and litigation.
The CBA then points out that the onerous disclosure requirements of the proposed bill impose obligations on organizations that are quite extensive. More directly, it says that “the governance and transparency of the organization should be a matter of general concern to its membership, not the public at large.”
The letter goes on to outline other requirements of the Bill that would likely be deemed unconstitutional, in addition to its effect on pension and benefit plans (since its definition of “labour trust” includes a very broadly worded definition that would capture any pension or benefit fund that has any unionized beneficiaries.
In addition to all that, the CBA points out that the disclosure required under the Bill “will be staggering, and there will be significant compliance costs.”
The letter ends pretty much as it begins – by questioning the intent of the legislation, since “these funds are already subject to significant public disclosure under provincial labour and pension legislation and under existing provisions of the Income Tax Act.”
As many of others continue to argue, this Bill is just plain bad legislation. The entire letter can be viewed here.
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