CANADA: LABOUR ORGANISATIONS
the organizations themselves enjoy.
Labour organizations play a valuable role in Canadian society, promoting workplace health and safety, and good compensation for Canadian workers. In return the public provides the benefits through the tax system. Tax deductibility of union dues alone costs the treasury approximately C$500 million (£270 million) annually. Ironically, Canadian labour organizations internationally headquartered in the United States, of which there are many because of close trade ties between our nations, have been required to make disclosure to the US Labor Department since 1959. For the past decade, these filings have been posted on the internet, giving Canadians access to financial information about some, but not all Canadian labour organizations.
In fact, it was only because of these American filings that a scandal involving the federal New Democratic Party (NDP) – a party historically tied to organized labour – came to light. In Canada, donations to federal political parties by corporations and trade unions were banned in 2006. Yet filings made by US-affiliated Canadian unions to the US Labor Department revealed C$350,000 (£187,000) in illegal contributions from unions to the NDP between 2006 and 2011. The NDP admitted its wrong-doing and was forced to return the cash.
Looking further afield, it is clear that many of Canada’s key industrialized trading partners, such as Great Britain, France, Germany and Australia also require public disclosure by their domestic trade unions. The lack of public reporting requirements for Canadian labour organizations led me to introduce a Private Members
“Public disclosure is strongly supported by the Canadian public, including union members themselves. A recent survey by the Nanos polling firm
indicated that 83% of Canadians and 86% of unionized Canadians support public financial disclosure by labour unions.“
Bill in the autumn of 2011. The premise behind Bill C-377, is that the public has a right to know how the substantial benefits it provides to labour organizations are being used. Public disclosure will create greater support for the valuable work that labour organizations do as the public learns how the benefits they provide are being used.
Under C-377, every labour organization in Canada will file a standard set of financial reports each year. These will then be posted on the tax department’s website, much as Canadian charities already do. With the financial information this bill provides, the public will be empowered to gauge the effectiveness, financial integrity and health of Canada’s unions. In addition to standard financial statements, C-377 will require labour organizations to provide details on spending in the areas of lobbying, political activities, conferences,
44 | The Parliamentarian | 2015: Issue One
education and training activities, and gifts and grants. Related- party transactions, such as the sale of union property to a union executive, would require specific, detailed reporting, and any loans over $250 (£134) to officers, directors, members, employees or businesses would also be itemized.
Compensation to officers and directors, including salary, benefits, gifts, bonuses and any other form of remuneration, would be fully reported. Likewise, disclosure would also include employees of the labour organization who earn more than $100,000 (£53,500) annually.
Officers, directors and employees would also be required to provide a reasonable estimate of the amount of time they spend on political activities, lobbying activities, and other non-labour relations activities.
Some critics have suggested C-377 will place unions at a disadvantage in labour negotiations, given that management will know details about the union’s finances and its ability to sustain a strike. However, it is obvious the willingness of workers to withdraw their labour in a bargaining dispute is based on far more important considerations than simply the amount of money in the strike fund. The fact is, American and British unions, and for that matter a good number of Canadian unions which are already required to report in the US, have lived with financial transparency for a long time and it does not appear to have affected their ability to bargain effectively.
Public disclosure is strongly supported by the Canadian public, including union members themselves. A recent survey by the Nanos polling firm indicated that 83% of Canadians and
86% of unionized Canadians support public financial disclosure by labour unions. Requiring public disclosure by private organizations receiving substantial public benefits is not a new concept, nor is it costly. Canadian charities, for instance, have not found their public reporting requirements cumbersome or expensive, nor has posting those figures on-line posed an expensive burden for the Canada Revenue Agency (CRA).
Indeed, in this era of electronic record keeping, a software upgrade is probably the only expense most union book-keepers may have to incur to file to the financial reports they already compile internally. However, such modest costs are far outweighed by the advantages to Canadian taxpayers of knowing how the benefits they provide to support the work of labour organizations are being used.
On the Government side of the reporting ledger, the CRA, which would be responsible for posting the labour organization financials on its website, should C-377 be made law, has estimated minimal costs. The CRA suggests costs of C$1.1 million (£588,000) annually for the first two reporting years, mainly for the capital cost of establishing the on-line forms and reporting software, and just C$800,000 (£428,000) annually after that: a small price to pay for bringing transparency to an institutional sector with revenues between $4 billion and $5 billion yearly (£2.1 billion to 2.7 billion)
Bill C-377 was passed in December of 2012 in a 147- 135 vote at Third Reading by the House of Commons. It has passed Second Reading in the Senate and is currently being considered by a Senate committee.
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