Income Tax Act—Bill to Amend—Third Reading—Motions in Amendment and Sub-amendment
Hon. Jim Munson: Honourable senators, for weeks now we have been hearing strong evidence, and a staggering amount of it, that we should kill Bill C-377.
Some Hon. Senators: Hear, hear.
Senator Munson: The sponsor of this private member’s bill, MP Russ Hiebert, positions it as being about accountability and transparency, similar to other actions by the Conservative government.
His bill sets out, as we have heard, requirements for labour organizations to publicly disclose reams and reams of financial information, and all of it to be posted on the Canada Revenue Agency site. Here is his justification for imposing such a burden on Canada’s labour organizations:
If Canadians, both unionized and non-unionized, feel that their investment in these labour organizations, to the tune of about $500 million a year, is reciprocated with accountability and transparency, then their confidence will increase as well.
That is what he said. Here in the chamber, Senator Eaton has also argued that unions should be accountable to their members.
Both the honourable senator and Mr. Hiebert are correct. In fact, that is why the Canada Labour Code ensures that trade unions and employers’ organizations provide members with financial statements. There are similar requirements in most provinces, as well. In other words, the supposed purpose of Bill C- 377 is already covered, and quite effectively at that.
Reliable sources have pointed to the extremely low number of complaints about the process currently in place for ensuring accountability of labour organizations.
Mr. Kenneth Georgetti, President of the Canadian Labour Congress, has said this:
In the six provinces and federally where there is legislation governing the provision of financial information to union members, there were, in 2010-2011 a grand total of 6 complaints filed with labour boards, all of which were resolved.
This represents 6 complaints out of 4.2 million union members in Canada.
Honourable senators, Bill C-377 is unnecessary. It has no purpose in the public interest. As we have heard before, “this bill is a solution in search of a problem.” It is a great comment that sums it all up, save one fact — Bill C-377 itself is a serious problem.
The Canadian Bar Association, Le Barreau du Québec, the Federation of Law Societies of Canada — we have had the privilege of hearing testimony from groups essentially representing every lawyer in this country. They tell us that the bill violates Charter guarantees for freedom of association and expression, that it violates privacy law and that it encroaches on provincial jurisdiction.
Reporting requirements of this bill are excessive. They expose what should be confidential matters and jeopardize the outcomes of political activities, lobbying activities, organizing activities and collective bargaining activities; in other words, activities at the heart of what unions are and what they do.
Labour lawyers are typically involved in activities like these, which means the bill will infringe on solicitor-client privilege, a principle of fundamental justice. According to Mr. Michael Mazzuca, of the Bar Association:
Any client — whether it’s a trade union or an employer — should be confident that the information and the documents and the discussions that they have with their lawyer are protected.
Even in the face of these and other criticisms, Mr. Hiebert insists that he has received assurance from the legal community of the constitutionality of this bill.
Our colleague Senator Ringuette is quite rightly skeptical. She has specifically requested proof of this, but Mr. Hiebert has yet to come through with any.
On a question such as this, you would think that there would be some concrete evidence — even a letter — and that, as the bill’s sponsor, you would keep it handy in case someone asks for it.
As Senator Ringuette recently told the Toronto Star:
That tells me this is purely a political bill in the first place, and in the second place there is no doubt in my mind that if the Tory majority in the Senate pass this bill that it’s going to cost hundreds of millions of dollars to the taxpayer and it’s going to end up before the Supreme Court of Canada.
The Canada Revenue Agency estimates it will cost $10.6 million over the first two years to implement this bill, followed by “ongoing” — whatever that means — costs of $2.1 million.
If the legal experts we have talked to are correct — and I can only assume they are — the courts will eventually throw out the legislation as unconstitutional.
To repeat what Senator Ringuette has said, this bill will cost taxpayers millions, and for what? A waste.
Senator Segal has expressed his disapproval of this bill on several points, among them that it flies in the face of the Conservative belief in less, not more, government. He has drawn linkages between the impact of this bill and dictatorships, where tax law is used to crush independence and freedom of expression. This bill is at odds with his broader vision for Canada, for society. He is very clear in these remarks. Here is what Senator Segal has said:
As a Tory, I believe that society prospers when different views about the public agenda, on the left and right, are advanced by different groups, individuals and interests. Debate between opposing groups in this chamber, in the other place and in broader society is the essence of democracy. Limiting that debate as to scope and breadth is never in the long-term interest of a free and orderly society.
I am grateful for Senator Segal’s methods of bringing our thoughts around to the dynamics of labour relations — the relationship among unionized men and women and businesses, and the necessity for discussions and planning to happen freely.
Honourable senators, Senator Moore posed this question at a recent hearing on this bill by the Standing Senate Committee on Banking, Trade and Commerce. He said:
Do you think that it is right that a union should divulge its tactics and its thinking to the public and, obviously, to management? Where is the spirit of collective agreements negotiating — two parties, each finding their own way and working to a solution?
When I contemplate the minute and truly mind-deadening details that will have to be attended to under this bill, I can actually feel the restraints, the interruption and hindering of creativity and innovation.
The disclosure level of this bill is $5,000 for anyone doing business with a labour organization — employees, employers, creditors. They must all be named and the amounts owed disclosed on public record. This exposure will most certainly produce yet further collateral damage, a disincentive for anyone to work for a labour organization. In the words of Senator Massicotte in committee:
They do not want to see their name disclosed with an amount. Their competitor will take that information. It is not in the public interest.
Honourable senators, Bill C-377 is also discriminatory. According to Professor David Doorey of Toronto’s York University:
… it singles out only one type of association that the government would like to silence — trade unions — for an extensive array of time consuming and costly administrative measures, while leaving alone all other associations that have dues paying members who receive tax benefits.
Mr. Hiebert has likened the disclosure requirements in this bill to those that charitable organizations must respect, but the similarities are superficial at best. Unions are distinct in their purpose and the way they fulfil that purpose. The CLC’s Mr. Georgetti explains:
Other than the fact that we are called unions, we are private organizations owned by our members, who happen to get a tax benefit from their contributions. They have a right to make their own determinations, and they don’t have to be scrutinized by anyone else.
Mr. Hiebert defends his bill by comparing it to other legislative models in other countries like the United States.
Dr. John Logan, Director of Labour and Employment Studies at San Francisco State University, provided testimony on the American experience last fall to the House of Commons Standing Committee on Finance. His statements were certainly enlightening, but not in the way Mr. Hiebert and other supporters of this bill would appreciate. He stated that U.S. legislation for labour organizations, which is actually narrower in scope than Bill C-377, is very expensive and that there is no evidence that detailed financial statements from labour organizations have provided any useful service to ordinary union members. In his words:
I think the only groups that have used them were the very groups that were pushing for them in the first place, and those have been groups that have a political agenda to weaken unions and to use this information against unions, albeit often in a misleading and distorted way.
Mr. Robert Blakely, Chief Operating Officer of the American Federation of Labour and Congress of Industrialized Organizations, also attended the committee hearings with Dr. Logan. He estimated that the bill adds 20 per cent to the cost of administering the AFL-CIO. To illustrate, he explained that the pension fund alone would have to have filed a report the size of a large city’s phone book.
Speaking in terms of the immediate personal interests of his union members, he described the bill’s impact like this:
It will take money away from our ability to service people, take money away from our ability to provide pensions, take money away from our ability to look after kids’ teeth.
What Mr. Blakely describes as a worry and a threat, most of us instantly understand. I mean, of course, those very basic concerns that impact us as individuals with responsibilities to ourselves and to our families, to loved ones.
It is worrisome, honourable senators. Our country seems to be drifting from the beliefs and values that for generations have defined what is great about this country. Approximately 30 per cent of workers in Canada belong to a union. In the 1980s, almost 40 per cent of Canadian workers held unionized jobs. With membership shrinking and new pressures, such as recessions and the demand of protecting workers within a global economy, unions are definitely more vulnerable than I have ever known them to be.
Unions also have their flaws. Members might disagree with the causes and political parties their dues are used to support. The bargaining and grievance processes can be cumbersome and lengthy, but these and other shortcomings are eclipsed by the contributions of unions historically and to come.
Honourable senators, whether or not we have been members of or had direct dealings with a labour organization, we know Canada’s history. In an article entitled “Why Unions Matter,” the Canadian Centre for Policy Alternatives highlights key outcomes of union activities. It states:
… No country has ever achieved widespread prosperity and created a large middle class without strong unions.
Generations of hard-fought union struggles brought Canadians the eight-hour day and the weekend; workplace health and safety legislation and employment standards; income supports for new parents and training for unemployed workers; public pensions and minimum wages; protection for injured workers and equal pay for equal work.
Honourable senators, it seems to me that we are receiving an excellent rate of return from our investment, as Mr. Hiebert calls it, in this country’s labour organizations.
In April, the Broadbent Institute issued a report entitled “Union Communities, Healthy Communities,” with ample evidence of the positive correlation between stable economic growth and union strength within industrial countries. Here is one very pertinent conclusion from the report:
All evidence suggests that unions have been, and remain, an important defender of human rights and greater economic equality, and a major reason why extreme income inequality is less pronounced in Canada than in the United States.
If we want to pursue a Canadian society of greater equality, social justice, and social democracy, we would be better served by strengthening, not weakening, our unions.
The Hon. the Speaker pro tempore: I regret to inform the honourable senator that his time has expired. Would the Honourable Senator Munson be prepared to ask for more time?
Senator Munson: Yes.
The Hon. the Speaker pro tempore: Is more time granted, honourable senators?
Some Hon. Senators: Agreed.
The Hon. the Speaker pro tempore: Five minutes.
Senator Munson: Implementing Bill C-377 will cost the Government of Canada tens of millions of dollars. Contrary to how it has been promoted, this is far from a cost-neutral proposal. The immediate and collateral damage that will result from passing and implementing this bill will essentially cut off our unions at the knees — this at a time when the number of workers in insecure and precarious work arrangements is rising; this at a time when we could really use inspired, unencumbered discussions and activities to generate new ideas to strengthen our economy.
The only context in which this bill fits is the Conservatives’ agenda to silence voices of dissension. Senator Cowan has described at length, and in a very persuasive way, how the government has systematically muzzled and squashed organizations like those dedicated to women’s issues, international development and the environment, and labour organizations are next in line. Government does not fund labour organizations, so what we are seeing is a different line of attack. I advise senators to keep their eyes open because there must be more coming down the pike.
Honourable senators, our quality of life is very much a measure of the state of our economy. If it is stable and functioning within a true democracy, the contributions and interests of all participants matter.
In conclusion, it really comes down to things like fair wages, decent benefits and pensions, and protection from discrimination and unfair treatment in the workplace. We have to protect the very forces that protect what Canadian workers need. These are our unions.
Honourable senators, I would like to thank Senator Ringuette for what she has done, as well.
Some Hon. Senators: Hear, hear!
Senator Munson: We only have evidence of problems within and that will result from the passage of Bill C-377. A decision to support this bill is a mistake.
Honourable senators, I urge you to vote with wisdom and reason, and give yourselves and all of us within this chamber reason to feel we have reached a decision in the best interests of Canadians. Cast your vote against Bill C-377.
Some Hon. Senators: Hear, hear!
The Hon. the Speaker pro tempore: With the Honourable Senator Munson accept a question?
Senator Munson: Yes.
Hon. Pierrette Ringuette: I thank Senator Munson for his opinion with regard to Bill C-377.
When Revenue Canada estimated it would cost $10 million a year, it was with regard to 5,000 units that would have to report. There are 25,000 union units that will have to report, notwithstanding all the mutual funds that will have to report. On a yearly basis, we are looking at taxpayers spending $60 million to put forward private information of between 9 million and 11 million Canadians.
Honourable senators, I have heard Senator Munson speak so many times in this chamber about autism and the need to have a national action plan for autism. Does he think that $60 million a year would be a wiser investment in a national autism strategy than having anywhere from 9 million to 11 million hard-working Canadian workers’ information on a government website?
Senator Munson: I thank the honourable senator for that question. There is a simple response: Leave the unions alone.
In response to the other part of the question about autism, a cause that is close to many of our hearts, $60 million would be a start.
Senator Ringuette: Every year.
Senator Munson: I do not like to use the word “I,” because many individuals are now involved in dealing with autism. A national autism spectrum disorder strategy would probably be one of the most socially progressive and justified things that any government could do, beginning now. All of us know someone who has autism. As a society, I think the money would be well spent on a national autism spectrum disorder strategy and it would be a very good start.