One of the most contentious pieces of legislation recently was a private member’s bill, Bill C-377, which required what we believe to be hugely intrusive public reporting by labour organizations. The legislation was so contentious that event the Senate, controlled by the Harper Conservatives, initially amended the bill to effectively gut it. But the Commons passed it once again and it received Royal Assent on June 30.
It is now section 149.01 of the Income Tax Act.
Its key elements include imposing unusual public disclosure requirements on labour organizations, including trade unions, and also on “labour trusts”. A labour trust is defined to include “a trust or fund … established or maintained in whole or in part for the benefit of a labour organization, its members or the persons it represents.” There are specific exemptions for registered pension plans, deferred profit sharing plans, employee life and health trusts, private health services plans, group sickness or accident insurance plans, group term life insurance policies, and supplementary unemployment benefit plans.
However, many types of funded arrangements established by employers for the benefit of employees could potentially be caught if the employees are members of, or represented by, a labour organization. Examples of plans not specifically exempted include retirement compensation arrangements, group RRSPs and foreign pension plans.
The reporting requirements are extremely onerous and invasive. They include not only financial statements, but also, among other things, a list showing every disbursement above $5,000 with the name of the payee and purpose of the disbursement.
Remuneration paid by the trust to officers, directors and trustees earning over $100,000 must also be reported.
The full list is as follows:
3) Content of return — The information return referred to in subsection (2) shall include:
(a) a set of financial statements for the fiscal period, in such form and containing such particulars and other information as may be prescribed relating to the financial position of the labour organization or labour trust, including
(i) a balance sheet showing the assets and liabilities of the labour organization or labour trust
made up as of the last day of the fiscal period, and
(ii) a statement of income and expenditures of the labour organization or labour trust
for the fiscal period;
(b) a set of statements for the fiscal period setting out the aggregate amount of all transactions and all disbursements—or book value in the case of investments and assets—with all transactions and all disbursements, the cumulative value of which in respect of a particular payer or payee for the period is greater than $5,000, shown as separate entries along with the name of the payer and payee and setting out for each of those transactions and disbursements its purpose and description and the specific amount that has been paid or received, or that is to be paid or received, and including
(i) a statement of accounts receivable,
(ii) a statement of loans exceeding $250 receivable from officers, employees, members or businesses,
(iii) a statement showing the sale of investments and fixed assets including a description, cost, book value, and sale price,
(iv) a statement showing the purchase of investments and fixed assets including a description, cost, book value, and price paid,
(v) a statement of accounts payable,
(vi) a statement of loans payable,
(vii) a statement of disbursements to officers, directors and trustees to employees with compensation over $100,000 and to persons in positions of authority who would reasonably be expected to have, in the ordinary course, access to material information about the business, operations, assets or revenue of the labour organization or labour trust, including gross salary, stipends, periodic payments, benefits (including pension obligations), vehicles, bonuses, gifts, service credits, lump sum payments, other forms of remuneration and, without limiting the generality of the foregoing, any other consideration provided,
(vii.1) a statement with a reasonable estimate of the percentage of time dedicated by persons referred to in subparagraph (vii) to each of political activities, lobbying activities and other non-labour relations activities,
(viii) a statement with the aggregate amount of disbursements to employees and contractors including gross salary, stipends, periodic payments, benefits (including pension obligations), vehicles, bonuses, gifts, service credits, lump sum payments, other forms of remuneration and, without limiting the generality of the foregoing, any other consideration provided,
(viii.1) a statement with a reasonable estimate of the percentage of time dedicated by persons referred to in subparagraph (viii) to each of political activities, lobbying activities and other non-labour relations activities,
(ix) a statement with the aggregate amount of disbursements on labour relations activities,
(x) a statement of disbursements on political activities, (our emphasis)
(xi) a statement of disbursements on lobbying activities,
(xii) a statement of contributions, gifts, and grants,
(xiii) a statement with the aggregate amount of disbursements on administration,
(xiv) a statement with the aggregate amount of disbursements on general overhead,
(xv) a statement with the aggregate amount of disbursements on organizing activities,
(xvi) a statement with the aggregate amount of disbursements on collective bargaining activities,
(xvii) a statement of disbursements on conference and convention activities,
(xviii) a statement of disbursements on education and training activities,
(xix) a statement with the aggregate amount of disbursements on legal activities, excluding information protected by solicitor-client privilege,
(xix.1) a statement of disbursements (other than disbursements included in a statement referred to in any of subparagraphs (iv), (vii), (viii) and (ix) to (xix)) on all activities other than those that are primarily carried on for members of the labour organization or labour trust
All that is bad news, to say the least, for affected organizations. But there is some real hope: the legislation is effective for fiscal years after December 30, 2015. So there is time. And both the Liberals and the NDP vowed to repeal the legislation. So the issue will be whether, given the status of the Commons after the election, such a repeal happens, and if so, when. We believe that one way or the other this legislation will not become effective even if repeal comes only sometime in 2016.
But it is and was a nasty and pernicious attempt to muzzle labour unions who were seen, like many charities, as being enemies of the Harper government.
Doing away with this should have a priority with the new Commons.