Bill C-377, which aims to amend the Income Tax Act (ITA) and create stringent reporting requirements for labour organizations, was passed by the House of Commons in December, 2012 and is now the subject of hot debate in the Senate. So heated is the debate that even some Tory members are uncharacteristically supportive of the Liberals and the NDP in their efforts to amend or block the Bill.
Many see the bill as an attempt to covertly use the Canada Revenue Agency to attack unions. It is a hugely intrusive bill that seeks to force labour unions to publicly disclose much of their internal information, including salary details. The reporting requirements the bill seeks to impose would be time-consuming and costly not only for unions but for tax-payers across the country. Scrutinizing unions would require the CRA, by its own estimate, to take on additional staff and require roughly $2.5 million in operating funds. The CRA would also require an additional $800,000 in funding per year for this undertaking.
The bill is wholly lopsided in its effects, encumbering unions in a sea of bureaucratic paperwork without likewise troubling employers. As Senator Hugh Segal has pointed out, a proposed subparagraph to be included in the amendment to the ITA would require unions to declare monies spent on labour relations activities, “…with no concurrent disclosure imposed on the management side.”
Why the CRA needs to be involved in the expenses unions incur for labour relations activities is either left vague by proponents of the Bill or is couched in antipathy toward mandatory union dues and thinly veiled right-to-work rhetoric.
Further, there is no like requirement being placed on other groups that engage in political expression. Only labour relations activities are targeted. According to NDP MP, Yvon Godin: “…with Bill C-377, the Conservatives are going after unions the same way the IRS went after the Tea Party in the United States.” Indeed, the bill appears designed to damage unions. The Canadian Bar Association has acknowledged as much, noting that Bill C-377 may infringe the Charter-protected rights of unions:
The Bill interferes with the internal administration and operations of a union, which the constitutionally protected freedom of association precludes, unless the government interference qualifies as a reasonable limitation upon associational rights. It is unclear from the Bill what the justification is for these infringements.
The CBA has also raised a red flag regarding the underhandedness of the Bill, stating that it: “could have a serious impact on the operations of labour unions, yet these processes are embedded in amendments to the Income Tax Act”, concluding that “it is inappropriate for operational restrictions to be brought forward as amendments to taxation legislation.”
To highlight the absurdity of empowering the CRA to single out unions in this way, Senator Segal posits a chilling question: “If CRA is to become the political judge of what expenses are appropriate, what are the guiding criteria?” He then notes that “the bill is silent on that.” With the recent IRS scandal dominating the American political landscape, we must all be wary of the powers of taxation authorities to stifle political expression.This goes to the heart of a properly functioning democracy. If passed, this bill will change the democratic face of Canada that we all hold so dear. And we will all be the poorer for it.
One of the goals touted by Conservative and other supporters of this bill is transparency. If this were indeed the goal one would think the Conservatives would be more transparent in their motives for seeking to amend the ITA. Surely, that’s the least Canadians have a right to expect from their government. For now Bill C-377 is stalled in the Senate, and this is exactly where it belongs.