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Harper government wants to invest $60M a year to put Canadians at risk

For Immediate Release


October 29, 2014


Harper government wants to invest $60M a year to put Canadians at risk


Senator Pierrette Ringuette spoke yesterday in opposition to bill C-377, An Act to amend the Income Tax Act (requirements for labour organizations).

C-377 forces unions to disclose any disbursement that exceeds $5000 and any salary over $100,000. Disclosures will be posted to a public database and include names of the payer and payee.

It has been estimated that this law would cost the Canada Revenue Agency as much as $60 million a year.

Senator Ringuette’s remarks covered the numerous and repeated arguments against the bill, including that it is unconstitutional, unnecessary, infringes on provincial jurisdiction, restricts freedom of speech and association, breaches solicitor-client privilege, etc.

Senator Ringuette reserved the main point of her speech for the issue of the bills significant infringement of people’s privacy and that it poses significant risk for Canadians.

Senator Ringuette said that:

The name of anyone receiving $5,000 or more per year will be on the Internet for anyone to browse.

Millions of Canadian citizens, along with their revenue, will be posted online making them all targets - targets for bullying, targets for break-ins, etc.

Scam artists can look up pensioners' information — name and the money they are receiving. They could also identify from the disclosed information who is a recent widow.

This will become a database to be used by criminals and scam artists.

The full transcript of Senator Ringuette’s remarks is attached.

For more information:


Tim Rosenburgh

Office of Senator Pierrette Ringuette

(613) 943-2248





Income Tax Act

Bill to Amend—Second Reading—Debate Continued

On the Order:

Resuming debate on the motion of the Honourable Senator Maltais, seconded by the Honourable Senator McIntyre, for the second reading of Bill C-377, An Act to amend the Income Tax Act (requirements for labour organizations).

Hon. Pierrette Ringuette: Honourable senators, this public bill, Bill C-377, has neither gone away nor changed since it received first reading in the Senate in December 2012.

It did not go away because the Prime Minister prorogued Parliament before the other place received it in its amended form. It was put back on the Order Paper in October 2013, over a year before it was introduced at second reading just recently.

Bill C-377 has not changed. In other words, it is still unconstitutional; it still fails to respect privacy; it will be very costly to taxpayers; it puts Canadian workers in danger, especially those who protect us; and finally, it still creates an indefensible imbalance in employee-employer relationships.


Bill C-377 forces unions to disclose any disbursement that exceeds $5,000 and any salary over $100,000. Disclosures are made to the Canada Revenue Agency and would be posted publicly.

The disclosure includes the name and address of the payer and payee, description and purpose of the transaction, and amounts. There is also a requirement for estimates of time dedicated "to each of political activities, lobbying activities and other non-labour relations activities."

My concerns are numerous. The first one is the provincial jurisdiction of the issue. The regulation of labour relations is a provincial issue. While it has been claimed by supporters that this bill is strictly about accountability for tax benefits, the defenders of the bill use labour relations arguments frequently, including references to similar laws in other nations, most of which fall under labour relations, and not tax law.

Representatives from the Canada Revenue Agency claimed:

We are considering the focus of this measure as disclosure, not for income tax administration purposes or tax assessment purposes.

The claim that this bill is beyond the jurisdiction of the federal government has been put forward by ministers from almost every Canadian province, the Canadian Bar Association, Barreau du Québec, the Federation of Law Societies of Canada, the Certified General Accountants Association of Canada, Constitution experts such as Bruce Ryder of Osgoode Law School and Alain Barré of Laval University, among many, many others.

As a defender of our Constitution, I cannot approve such an encroachment on the division of powers between the federal government and its provincial counterpart. Private law, as is labour relations, is a provincial jurisdiction. Provinces have already enacted balanced, transparent labour relations legislation in order to foster social peace, democratic processes and economic growth.

In June 2013, Senator Nolin expressed it this way:

The main argument in Senator Carignan's speech is that we must focus on the very nature of the bill. I see that as the issue. Taxation is secondary because the very nature of the bill puts it in the realm of private law.

Then he goes on to say:

It is trying to regulate private law, which is a provincial jurisdiction, by going through the back door and using tax law. We cannot accept that, not even with good amendments.

Also in June 2013, ex-Provincial Court judge Senator Andreychuk rightly voiced:

My concerns were still about the constitutionality, the privacy issues and the Charter issues. It would appear these priority issues were not dealt with at the beginning of this process or at the House of Commons.

Then she says:

I accept that it is flawed constitutionally.

Another major issue is privacy. This bill would require public disclosure, name and address, of any disbursement that exceeds $5,000.

The amount of information and the public disclosure of that information are disproportionate to that required by other organizations. This would require the release of information of not only union business, but of third parties that do business with them. This could make it harder for unions to receive services as vendors may not want to have the details and amounts of their contracts posted publicly.

The Privacy Commissioner stated in committee that it is a "significant privacy intrusion" and "highly disproportionate," and that "requiring the names of all individuals earning or receiving more than $5,000, as well as the amounts they receive, to be published on a website, is a serious breach of privacy."


The Canadian Privacy Act specifies that to disclose private information publicly one needs consent of the individual whose private information would be disclosed and/or posted. In order to abide by the privacy legislation, the unions, the director of the Canada Revenue Agency and the minister would all have to get the individual consent for the information to be disclosed publicly. If not, any of them and/or all of them would be subject to court challenges under the Privacy Act.

The name and address of anyone receiving $5,000 or more per year will be on the Internet for anyone to browse.

Millions of Canadian citizens, along with their revenue, will be posted online, making them all targets — targets for bullying, targets for break-ins, et cetera.

Scam artists can look up pensioners' information — name, address and the money they are receiving. They could also identify from the disclosed information who is a recent widow.

This will become a database to be used by criminals and scam artists.

Senators, at a time when we must do our best to protect our citizens from any predatory scams, why would we agree to spend $60 million of taxpayer money to expose millions of innocent Canadians?

If the government has an extra $60 million of taxpayer money, it should be invested in protecting Canadians and not increasing their vulnerability.

Another issue is freedom of speech and association. It has been said that the bill may significantly violate the Canadian Charter of Rights and Freedoms.

It could have a chilling effect on the freedom of speech and association of unions and their members by separating lobbying and political activities from other union activities. The bill says:

. . . to each of political activities, lobbying activities and other non-labour relations activities,

Give me a break. This makes the biased assumption that political advocacy and lobbying is not a legitimate part of union labour relations activities on behalf of their membership. It is, as far as I am concerned, a legitimate way to bring attention to workers' concerns.

The Canadian Bar Association said that:

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 disclosure of this information will create an imbalance of information between unions and employers, diminishing a union's bargaining position. This intrusion into the inner working of the unions is a violation of the right of collective bargaining.

On this note, I would like to say that the MP who introduced this bill has misled Parliament by saying that there was similar legislation in France, the United Kingdom and Australia. In reality, the pieces of legislation referred to are under labour relations and both the employee and employer organizations are required to disclose the same information to a registrar, and its public disclosure is very limited.

Provincial legislation rightly imposes the same obligations upon unions as it does toward the employers in labour relations. This balance, or should I say this non-discriminating approach by Canadian provinces, is the proper way to achieve the required win-win negotiations.


The obligation that labour organizations would have to disclose all disbursements related to legal or medical activities, for example, violates the solicitor-client privilege that exists for members of the bar, doctors and other professions. If a member violates solicitor-client privilege, these professional associations may take disciplinary action or sometimes even impose fines. Solicitor-client privilege is the very reason that we view these professionals as credible and that we trust them as clients and as members of a democracy.

The cumbersome accountability requirements set out in this bill will result in significant costs in terms of time and money. The Canadian Labour Congress estimated that it would cost $450,000 to implement these requirements and that 2 per cent of its annual revenue would be spent on keeping the information up to date and preparing the reports.

Canada has more than 25,000 unions of varying size, including many small regional and local unions that do not have the resources to provide this kind of information.

It's also important to mention that Canadian taxpayers will have to shoulder the financial burden imposed by the costs for the Canada Revenue Agency to fulfill its obligations, as set out in Bill C-377.

During meetings, Canada Revenue Agency officials estimated their costs at more than $60 million a year. To give you some perspective, in 2013, the Senate's total budget was $104 million.

Bill C-377 will cost the Canada Revenue Agency $60 million, which represents 57 per cent of the Senate's total operating budget.

Surely you can see that Bill C-377 will cost an exorbitant amount of money to provide for the disclosure of personal information about Canadians at a time when we should be focusing our energies and public funds on protecting Canadians.

These costs are unacceptable to taxpayers. Furthermore, provincial laws already require financial statements to be made available to members of labour organizations.


On February 14, 2013, the Honourable Hugh Segal also expressed the following:

Dispatching CRA to police how trade unions spend their money, in denominations of $5,000 or more, is to increase the role of CRA and of the state in ways that create a bigger, nosier and more expensive government. As a taxpayer and as a Conservative, I oppose that kind of increase in any government's power or expenditures.


He said that on Valentine's Day.


The definition of "labour trust" means that all disbursements from a pension fund and other benefits must be disclosed if they add up to $5,000 or more per year. The names and addresses of people receiving retirement pensions, death benefits, reimbursement of medical expenses or prescription costs, sick leave benefits and other health services or products will be made public. This bill is a real disgrace. It is an insult to the concept of a free and democratic society, a deliberate attack on the privacy of our citizens. It would be easy for someone with dishonest intentions to get information about a person's health and income, not to mention that person's address.

The proposed section 149.01(1) in Bill C-377 defines a "labour organization" as follows:

. . .a labour society and any organization formed for purposes which include the regulation of relations between employers and employees. . .

It's clear that all organizations that directly or indirectly regulate labour, whether as employees or employers, are covered by Bill C-377.

On page 5 of the Canada Labour Code, there is a definition of "employers' organization" — since these are organizations — as an organization of employers the purposes of which include the regulation of relations between employers and employees. The Canadian Bar Association raised this issue in a letter that it sent to the Chair of the House of Commons Standing Committee on Finance.

Honourable senators, that definition includes, among others, the National Hockey League, doctors' associations, the Mounted Police Professional Association of Canada, the Association des policiers et policières du Québec and even — don't be surprised — the Senate Protective Service Employees Association.

Honourable senators, in March 2013, when Bill C-377 was introduced at second reading stage, I filed three access to information requests, namely to the Canada Revenue Agency, the Prime Minister's Office and the Privy Council Office, and the Department of Finance. In April and June 2013, I received a response from the Privy Council Office and the Canada Revenue Agency. In February 2014, or 11 months later, I received a response from the Department of Finance. Indeed, this department had more than 69 documents containing 408 pages concerning Bill C-377. In total, we are talking about 450 pages of obscure information.

Honourable senators, you can see for yourselves; this is a joke.

If the government were confident about the legitimacy of this bill, the 450 pages could be tabled with the Clerk of the Senate and handed out to us during this second reading of the bill.


Honourable senators, last September, Senator Runciman talked about his concerns about union spending during the Ontario provincial elections. Here again, this is an issue that should be addressed by the Legislative Assembly of Ontario by amending the Ontario Election Finances Act for third-party financing. Apples and oranges: federal and provincial divisions of power and responsibility.

I am surprised that Senator Runciman, an almost 30-year veteran MLA and minister in the Legislative Assembly of Ontario, did not try to correct this provincial issue while he was serving in that house or that he does not currently have a sympathetic Tory MLA who can propose a private member's bill to amend the Ontario Election Finances Act regarding third-party financing and political donations by unions and corporations. It's only logical.

The Ontario Election Finances Act, section 37.5, requires third parties that engage in election advertising during the writ period to register immediately once they have spent $500 or more. Sections 37.10 to 37.12 also require that registered third-party advertisers must file an audited financial report to Elections Ontario six months after polling day.

On the other hand, the Canada Elections Act, section 350, limits third-party advertising to $150,000 during a general election. Therefore, within our federal jurisdiction and in respect to our Constitution, disclosure of third-party financing is already in the Canada Elections Act. Also, no unions or corporations are allowed political donations under the Canada Elections Act.

If third-party political financing is an issue in provincial jurisdictions, then it is the responsibility of those provincial jurisdictions to legislate on the issue, as it is their responsibility to legislate balanced labour relations.

Honourable senators, Canadian workers and their employers do not need their income disclosed publicly, making them vulnerable to predatory elements in our country or abroad.

Canadian taxpayers should not pay $60 million to satisfy non-profit, non-taxpaying organizations such as Merit or LabourWatch.

Senators must review legislation with the fundamental criteria of its constitutionality, respect of jurisdiction and Charter rights along with other federal laws, such as the Privacy Act. I strongly believe that Bill C-377 is a constitutionally-flawed bill and that if it is sent to be studied further by a standing Senate committee, the appropriate one would be the Standing Senate Committee on Legal and Constitutional Affairs.