Canada: New Proposed Legislation Could Alter Landscape For Unions In Canada

Last Updated: February 18 2013
Article by Kate Dearden

Most Read Contributor in Canada, September 2016

While significant financial disclosure requirements that would affect unions across Canada move closer to reality, Ontario politicians are promising to enact right to work legislation similar to legislation recently introduced in the United States.


Bill C-377, An Act to Amend the Income Tax Act (Requirements for Labour Organizations), continues to wind its way through the federal legislative process. Bill C-377 is a Private Member's Bill introduced by British Columbia Conservative MP Russ Hiebert. The legislation was passed by the House of Commons on December 12, 2012. On December 13, 2012, Bill C-377, had its First Reading in the Senate.

The Bill, if passed, would amend the Income Tax Act to require labour unions to provide financial information to the Canada Revenue Agency ("CRA") which would be made public. The key disclosure requirements are as follows:

a) Financial statements showing assets and liabilities, as well as a statement of income and expenditures;

b) Statements setting out all transactions and disbursements greater than $5,000 along with the name of the payer, payee, the purpose and description of the specific amount paid or received. This would include accounts receivable, accounts payable, loans payable, the sale and purchase of investments and fixed assets, disbursements to officers, directors and trustees, employees with compensation over $100,000, and persons in positions of authority;

c) Statement with a reasonable estimate of the percentage of time dedicated by officers, directors and trustees, employees with compensation over $100,000, persons in positions of authority, and contractors to political activities, lobbying and other non-labour relations activities;

d) Statement of aggregate amount of disbursements (essentially any payments or benefits) to employees and contractors;

e) Statements of disbursements on political and lobbying activities;

f) Statement of contributions, gifts and grants; and

g) Statement with aggregate amount of disbursements on general overhead, organizing activities, collective bargaining activities, conference and convention activities, education and training, legal activities.

The information labour unions would be required to provide to CRA under Bill C-377 would be publicly available on the Internet in a searchable format. It has been reported in the media that CRA would require several years, perhaps until 2015, to set up the administration that Bill C-377 requires. Failure to comply with the requirements of Bill C-377 could result in a summary conviction and a fine of $1,000, to a maximum of $25,000.

In his speech to the House of Commons, the Bill's sponsor Russ Hiebert commented that union dues are 100% tax deductible, and unions have tax exempt status. As a result, the federal government forgoes nearly $800 million in annual tax revenue. Given these benefits, Mr. Hiebert believes public disclosure of the finances of labour organizations is appropriate.

The disclosure requirements under Bill C-377 are viewed by critics as an attack on labour unions, and more onerous than the disclosure requirements for other organizations that are funded by tax-deductible membership dues. The Ontario Minister of Labour wrote a letter to the Senate dated January 3, 2013 in which she expressed concerns with the "inexplicably intrusive nature" of Bill C-377. She characterized the requirement as an "onerous administrative burden" on unions and government. Further, the Minister considered the Bill a threat to privacy and an "unwarranted interference" with collective bargaining. She noted that Ontario's Labour Relations Act, 1995 already provides a remedy for union members who want to see audited annual financial statements.


The Ontario Progressive Conservative Party (the "PC Party") has pledged to make significant changes to the current model of union membership. In a platform policy called "Flexible Labour Markets", the PC Party proposes that "no clauses in any provincial legislation, regulation or collective agreement should require a worker to become a member of a union or pay union dues as a condition of employment." Further, the PC Party, if elected, would require unions to collect dues from workers, rather than the current system that requires employers to deduct union dues and pass them along to unions.

The "right to work" policy proposed by the PC Party has recently been implemented by legislators in Wisconsin, Ohio, Indiana and Michigan. The legislation passed in these jurisdictions has provoked intense debate and public protest. Court challenges to the legislation on constitutional grounds are expected. It is fair to say that any "right to work" legislation that may be introduced in Ontario, or elsewhere in Canada for that matter, would produce a similar response.

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