C-377 is constitutional, says champion of bill forcing unions to open books

OTTAWA – With his private member’s bill on union finances now before the Senate, Conservative MP Russ Hiebert is confident it can withstand a constitutional challenge.

But labour groups say they’re ready for a court fight over the legislation, which they predict could cost taxpayers tens of millions of dollars.

Bill C-377 was passed by the House of Commons on Wednesday after it was amended to remove provisions dealing with pensions. The changes will also make it less expensive for the government to implement, the British Columbia MP told a news conference on Thursday.

Almost as soon as the bill left the House, labour groups began an intense lobbying campaign to persuade senators to scrap it.

A number of labour and legal organizations have predicted the bill won’t stand up to court scrutiny, but Hiebert insisted that the experts he consulted all say it is constitutionally sound.

“In drafting the bill, we brought it to a variety of constitutional experts in Canada, ” he said.

“They assured us the way that it’s drafted would sustain any constitutional challenge.”

The bill, once passed into law, would force unions to publicly disclose how they spend the dues they collect.

It would amend the Income Tax Act to require unions to provide detailed annual financial filings to the Canada Revenue Agency, which would in turn make the information public.

The amended bill approved by the Commons will, however, keep some personal information from public view for privacy reasons.

“I believe the bill that’s been placed before the Senate is actually an improved bill,” Hiebert said.

“Several amendments were made to C-377 … that improve protections for individual privacy and reduce the cost of the bill to the government.”

Before the amendments, the revenue agency had estimated the legislation would cost over $20 million to implement and almost $4 million annually to deal with the financial files delivered by unions.

But that figure assumed that about 1,000 unions in Canada would report to the tax agency, the Canadian Labour Congress said.

The actual cost of setting up a regime and overseeing compliance could range from $32 million to $45 million a year, CLC president Ken Georgetti estimated.

“There are 25,000 labour organizations that just belong to the Canadian Labour Congress,” he said.

“Each one of those organizations will have to file 26 pages of reports to the federal government.”

That’s close to the number of union groups in the United States that send financial reports to the federal government, which spends $40-million a year to handle them.

The Canada Revenue has also said it could take until 2015 to set up the systems to enforce the bill. But Hiebert said he expected information on union finances to start flowing to the public before the next election, scheduled to be held in the same year.

The original bill would have required unions to disclose the salaries of any staff or directors who were paid more than $5,000. An amendment raised the reporting threshold to $100,000.

The federal privacy commissioner’s office said Thursday that it continued to have concerns that the legislation would inappropriately divulge private information.

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