The date, 12-12-12, was likely the last great repeating date to occur in most of our lifetimes. While many said it was a harbinger of good luck, it certainly brought no such thing to labour organizations across the country. The date marked the passage of Bill C-377 — An Act to amend the Income Tax Act (requirements for labour organizations). The bill was approved in the House of Commons by a narrow vote of 147 to 135 and is now before the Senate.
The bill purports to increase the accountability and transparency of labour organizations for the public benefit. It requires them to file annually with the Canada Revenue Agency 29 schedules of detailed information about the organization’s finances and its activities, including activities such as political, organizing, lobbying, education and training and other non-labour relations work. The entirety of this information will be posted online for full public disclosure. The penalty for non-compliance is $1,000 a day until proper filings are submitted.
Ostensibly, public disclosure is necessary because dues paid to unions and non-unionized employee associations are tax deductible. The rationale is that labour organizations are, thus, partially subsidized by public dollars through the income tax system and, accordingly, the public has a right to know how its tax dollars are being used by them.
But no similar reporting requirements are imposed on any other type of organization, including private, public and non-profit corporations, charities, nor even the federal government. The compliance costs in time, money and resources for local, provincial and federal labour organizations are enormous.
As for the Canadian taxpayer, Canada Revenue has estimated it would cost about $2.5 million in the first two years to implement the legislation and almost $1 million a year to enforce the regulations. In its estimate, Canada Revenue assumes only about 1,000 organizations would be required to comply, but a report from the Parliamentary Budget Officer indicates more than 20 times this number will be required to file under Bill C-377.
The passage of Bill C-377 by the House was a rare event in Canadian legislation-making. First, it was introduced as a private member’s bill, a type of bill which almost never becomes law in Canada. Second, it has significant costs attached to it. Private members bills are not supposed to allocate new spending or create new functions or programs that require resources.
When the bill was challenged in the Commons as being out of order on this point, the Speaker ruled that its implementation would not create new spending or functions for Canada Revenue whose ongoing mandate was said to already include administering filing requirements and making information available to the public.
One might rightly wonder just how it garnered almost full government support and moved through the House so quickly when the odds should have been well-stacked against it. The answer is that the bill had the full support of the Prime Minister’s Office from its inception — unlike the typical, special-interest bill of a single government backbencher.
For instance, in a rare move, the government intervened following committee consideration of the bill to ensure amendments could be made at the report stage. The amendments made the bill slightly less egregious going into a third reading vote, in order to garner support from Conservative MPs who had been balking at support for the bill. Interestingly, government backbenchers allowed their own private members’ bills to be moved down the agenda on two occasions to allow C-377 to move from the committee stage to final House approval in less than a week.
Other questions seem pertinent as well.
Why is the federal public disclosure under this bill even necessary? Labour organizations already comply with normal reporting requirements under provincial legislation and are already accountable to their members through democratic processes for their financial and other activities.
Why does this legislation apply only to labour organizations and not to the many other organizations, including employer groups, which similarly benefit through the income tax system? Professional organizations for doctors, lawyers, accountants and many other professions are not being targeted. In fact, a motion to amend the bill to include employer organizations was defeated by government members, making clear the discriminatory, anti-labour nature of the bill.
And finally, how can the government justify the significant costs to implement and maintain this bureaucracy at a time when it is preaching austerity and cost management? In the last federal budget, more than $5 billion in cuts were made in the name of austerity, including the elimination of more than 19,000 public sector jobs. Funding for basic academic research in this country has been seriously eroded. As one example, funding to the Experimental Lakes Area — a unique and internationally acclaimed aquatic research station in northwest Ontario — was recently cut to save $2 million a year.
The reason for Bill C-377 is simple. It is part of a broader attack on the Canadian labour movement designed to diminish the groups’ capacity to oppose neo-liberal policies of right-wing governments. Throughout its history, the labour movement has been a strong change agent for better and more equitable working conditions for everyone. It has also been a successful champion for economic, political and social reform for the benefit of society at large. In a country with little distinction among the philosophies of our political parties, the labour movement voice is a real threat to the status quo.
It is no coincidence then that this needless legislation provides employers with key strategic information about labour’s operations and seriously hinders the political work labour organizations are able to do. The intent is simply to undermine the ability of labour to play its traditional role in public policy making.