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
FINANCIAL DISCLOSURE FOR UNIONS
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 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
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
d) Statement of aggregate amount of disbursements (essentially
any payments or benefits) to employees and contractors;
e) Statements of disbursements on political and lobbying
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
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
"RIGHT TO WORK" LEGISLATION
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.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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