Proposed union finances bill passes constitutional muster, ex-Supreme Court justice says
BY TYLER DAWSON, POSTMEDIA NEWS JUNE 5, 2013
A proposed bill would require all labour unions to provide the Canada Revenue Agency with financial information. That includes spending on education and training, and the percentage of time union employees spend on political activities. Some observers say the Supreme Court of Canada should test the constitutionality of the law.
Photograph by: The Canadian Press , Postmedia News
OTTAWA – A controversial private member’s bill that would require unions to reveal staff salaries, operating expenses and political activities to the Canada Revenue Agency doesn’t run afoul of the Constitution, says a former Supreme Court justice.
Michel Bastarache, who retired from the Supreme Court in 2008, wrote that “if Bill C-377 is enacted into law, it would likely be upheld by the courts as a valid enactment of (the) federal Parliament’s power over taxation.”
That view from a respected senior jurist will dismay opponents of the bill, who have argued it is invasive of privacy and would be costly to carry out. Bastarache’s view is not shared by all legal experts.
What financial information a union should disclose might be a perfectly legitimate debate, said Osgoode Hall Law School Prof. Bruce Ryder, but the reality is “most of this law falls under provincial jurisdiction.”
The bill would require that all labour unions provide the Canada Revenue Agency with financial information. That includes spending on education and training, and the percentage of time union employees spend on political activities.
Merit Canada, an organization that advocates for a union-free construction industry, commissioned Bastarache’s opinion. No one from Merit Canada could be reached for comment Wednesday.
Bob Linton, director of legislative affairs for the United Food and Commercial Workers Canada, said the big concern is the added expense of this system, as unions will need to collect and report this information, and the Canada Revenue Agency will need staff to monitor information and enforce the new provisions.
The Canadian Labour Congress, which will testify before the Senate on the bill, is also concerned about the level of personal information that would be disclosed. In a brief, CLC president Ken Georgetti said it would require disclosure of all transactions over $5,000, which, for example, could include personal information about a union member who is receiving money under a health plan for a prescription.
Ryder, the law school professor, said the proposed legislation, introduced by Conservative MP Russ Hiebert, is a “labour bill dressed up as a tax bill,” which Ryder predicted could lead to an expensive battle in the courts.
Provincial governments have the bulk of the responsibility over labour law, and the federal government has power over taxation law. It is this distinction – and, ultimately, which sort of law Bill C-377 actually is – that raises the question of constitutionality.
In a legal opinion released Wednesday, Bastarache wrote that as long as the motive of expense disclosure is “rationally and functionally connected” to an area of federal jurisdiction — that is, income tax law — then it is constitutional.
Bastarache wrote that the link between the Income Tax Act and this legislation is that there are tax benefits accorded to labour unions.
“In exchange for these benefits, it appears, the new section (of the Income Tax Act) would make public certain financial operations of these organizations,” he wrote.
However, Ryder disputed this assessment, saying there isn’t a rational connection between expense disclosure and income tax, and that Bastarache cites no examples of “benefits” or provisions under the act.
“The amount of information that needs to be disclosed is quite extraordinary, and how that has any connection to the goals of the income tax act is completely obscure,” he said. “The bill comes as (a) transparency and accountability measure for unions.”
Ryder proposed that, in light of the constitutional questions, the government should refer the bill to the Supreme Court of Canada, to determine whether or not it is constitutional.
Hiebert, the MP who introduced the bill, said the connection to the Income Tax Act lies in benefits received by unions.
“I modelled my legislation after the existing clauses within the Income Tax Act that deal with disclosure,” he said. “Union members receive benefits, unions themselves operate tax free and strike pay is also deemed tax free.”
He said that charities, for example, are already required to disclose finances. This is no different, he said.
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