There’s a Private Members Bill working its way through the legislative machinery in Ottawa filed by a Tory MP that would require unions to prepare and file dozens of forms listing receipts and expenses paid during a year. Anyone that does business with a union for an amount greater than $5000, including presumably the union’s lawyers, will find their names and bills posted on line for the world to inspect. The reports must also state “the percentage of time dedicated to political activities”, whatever that means.
I have serious doubts about whether the Federal taxing jurisdiction can be stretched so far into the private employment relationship between a union and its employees, since the regulation of employment and labour falls within provincial jurisdiction. But I’ll leave that one to the division of powers people. I also think this Bill raises Section 2(d) freedom of association issues under the Charter, in that it singles out only one type of association that the government would like to silence–trade unions–for an extensive array of time-consuming and costly administrative measures, while leaving alone all other associations that have dues paying members who receive tax benefits. For example, my mandatory law society dues are tax deductible in the same way my faculty union dues are, so why doesn’t the law apply equally to the law society? If governments can single out specific associations that are critical of them by imposing big administrative burdens on them, then freedom of association really is a weak, and mostly empty vessel.
Here is Bill C-377. It’s short, but very detailed. Give it a read. It’s an interesting piece of lawmaking for law students to study because it shows creativity (in trying to stretch taxing powers into places they do not belong), and how governments try to use regulation to punish their foes–in this case, unions, which have long been a thorn in the side of the Conservative Party.
Critics and Proponents of the Bill
The Bill has been roundly criticized by opponents, including law professors and law students, as an attempt to bog down unions with forms and expenses, and praised by anti-union lobbyists like the corporate funded Canadian Labour Watch Association, whose sole objective is to eliminate and weaken unions.
Note that there are already provincial laws to ensure that union members can get access to a union’s financial statements. For example, the Ontario Labour Relations Act requires a union to provide any member who so requests with a full set of audited financial statements. So Bill C-377 is not about making unions transparent to their members, though the Conservatives keep saying that. It is about imposing an administrative burden on unions, and apparently about informing ‘the public’ about a union spends its time and money. The law, if enacted, would cost taxpayers millions of dollars to develop, maintain, and police the huge database it would create. The Feds own people peg it about $20 million dollars of my taxpayer money in the first 2 years alone to tell the public how much unions spent on office supplies and conference hotel bookings. Geez.
Not surprisingly, union leaders are unhappy with the Bill. Check out this editorial by two union leaders. This shouldn’t be surprising, since the Bill would impose substantial administrative burdens on unions. Bill C-377 is government red tape on steroids. Just like employers who resist regulations that add red tape and administrative costs, so too unions are opposed to this Bill. Business leaders respond to new regulations by threatening to leave or layoff workers. When unions complain about the extensive red tape created by this Bill, the Bill’s proponents, including the MP Russ Hiebert, accuse unions of ”hiding something”.
Unions are probably concerned also that the government’s interest has less to do with protecting union members and more to do with arming the Tories and union opponents with information to spin in their ongoing pursuit of a weakened labour movement. They are probably correct in this regard. Hiebert says his Bill is based on the American Landrum-Griffin Act. That law has been around since 1959, but the George W. Bush Republicans extended the reporting requirements as part of their strategy to bog down unions in paper work and hopefully weaken the labor movement’s ability to campaign against Republicans. This story is explained nicely in this report exploring how the Republicans planned to burden unions with piles of disclosure requirements as a tool for weakening the labor movement. No doubt Hiebert and his allies are well aware of these strategies.
The Vast Expanse of this Transparency Bill
The MP (Russ Hiebert) who introduced the Bill has explained in this Toronto Star comment that “83 % of Canadians support greater transparency by unions”. That’s hardly surprising. If you ask people whether they think there should be more ‘transparency’ of institutions, they will say yes. Ask people if they want corporations, politicians, or think tanks, like Labour Watch, to be more transparent about where their money comes from and what they do with it, and you’ll get the same high positive responses. Transparency as a concept is good. It’s like asking if you support cleaner air. I’m often pushing for greater transparency myself. The real question is what’s the best way to achieve more transparency, to protect whatever pressing interest we’re trying to guard against, without also unnecessarily imposing costs or burdens on the organizations that must collect and disclose the information, and taxpayers who must police and maintain the system.
Unions, like businesses, require oversight to ensure that they are not engaging in illegal activities, which was the concern that prompted the American legislation that is the inspiration for Bill C-377. The devil is in the details of the laws chosen to perform this overseeing role. As I noted, we already have laws requiring financial disclosure by unions to their members in this country.
So now we have to ask what great benefit to society results from a law that would impose tens of millions of my taxpayer money on only one type of association–trade unions–which the Conservative government just happens to despise. The disclosure laws would not apply to any other association–not professional dues collecting associations, like law societies, not charities, not membership based corporate lobby groups. Only unions. The fact that the Canadian Taxpayers Federation supports the Bill says a lot about its ideological nature–this is a huge waste of taxpayer money used simply to create piles of information that hardly anyone will read. The only reason the CTF supports spending $20 million dollars of taxpayer money on this ideological boondoggle is because they side with the Tories in their dislike of unions. So anything that attacks unions is cool, regardless of costs to me and my fellow taxpayers.
Read the Bill. It doesn’t just require unions to publish a year end statement of accounts, or its top officials’ salaries, or to have its accounts audited like companies. Laws requiring that sort of thing already exist in Canada. Instead, the Bill requires unions to publish the name of any person or business that is involved in any transaction with a union of more than $5000. The union must prepare a itemized report of purchases from Staples for the purchase of paper, pens, and staples. That information will then be published by Big Brother on a website.
And the Bill doesn’t stop at financial matters. It also requires unions to tell the world the precise percentage of time that each and every employee has spent performing “political activities”. I don’t know what is considered ‘political’ and what isn’t. Is writing a blog explaining a law ‘political activity’? This part of the Bill seems way outside of the tax jurisdiction of the Federal government. A receptionist spends 10 percent of her time typing letters to a variety of MPs from all political parties asking politicians to support a local charity. Is forcing her employer to tabulate, report, and publish that percentage a matter of taxation under the Constitution? If it is, then the Feds have way more power over the regulation of private employment relationships than I thought they did. Division of powers scholars?
Cherry Picking from the American Law — What Happened to the Employer’s Reporting Obligations?
The American legislation that inspired this Bill was introduced in 1959 following revelations of corruption in some of America’s unions. Note that the American legislation, which Bill C-377 loosely copies, is a LABOR RELATIONS law, not a tax law. Labour relations falls within federal jurisdiction in the U.S., so there is no Constitutional issue there. Labour relations is a provincial matter in Canada, and as noted, the provinces have already legislated the precise issue that Bill C-377 targets: union transparency. So the Tories drafted Bill C-377 hoping to pass off what is really a labour relations law regulating unions as a tax law, so as to bring it within Federal powers over taxation. Look for a Constitutional challenge.
Perhaps the Tories will argue that union transparency is a matter of joint Constitutional powers. Would be funny if a court found that, in fact, jurisdiction over union transparency is Federal, and that therefore all of the provincial union transparency laws are unconstitutional. Then all the labour movement would need is a future Liberal or NDP government to repeal the Bill C-377 law–both parties are opposed to the Bill–and there could be no law left regulating union transparency at all.
Hiebert and the Bill’s supporters have conveniently failed to tell the public and Parliament that the American legislation they claim they are importing into Canada requires unions and EMPLOYERS to file reports. The US government thought the public and employees should know when employers spend money on efforts to undermine and defeat efforts by workers to exercise their legal right to join and form unions. The union and employer reporting obligations came as a package in the US, designed to educate workers not only about their unions’ activities, but also the activities of their employers aimed at interfering with their individual right to decide if collective bargaining is good for them. So Mr. Hiebert has cherry-picked only those parts of the American law that apply to unions, ignoring the parts that apply to employers.
Why do you think he did that?
American employers must still disclose any payment to a union or union employee, and the following information:
You can search some recent filings by employers here. For example, here’s a filing by that upstanding employer, Caterpillar. It tells the world that the company paid $12,465 one year to Permanent Solutions Labor Consultants, an organization that specializes in helping employers defeat union organizing campaigns for a fee, for the following reason:
The … payment was made for consulting services and travel expenses pursuant to a verbal agreement. The services were related to a union organization effort at a Caterpillar logistics facility which resulted in an election supervised by the NLRB. Services included educating employees regarding their rights under the [NLRA] to form, join, or assist labor organizations to bargain collectively or engage in other activity for their mutual aid…and to engage the business literacy of the workforce and encourage employees to be informed and vote.
Since Bill C-377 is all about protecting employees’ interests, and he claims to be trying to bring Canada in line with the American model, do you think the Honourable Mr. Hiebert should amend his Bill to include these reporting requirements for employers as well? Do you think he will?
Can Disclosure Regulation Produce Too Much Information?
The American law gives us a glimpse into what Bill C-377 would produce. The sheer volume of reports and documents produced makes them almost impenetrable to the average worker. Grab a beer and then read some the union’s filings under the LMRA. You can search unions here. How about, say, the United Auto Workers. Scroll down to the UAW. Come back here when you’re done.
We know from behavioural studies of disclosure laws that schemes that produce too much information can actually make people less informed. They tune out and the information becomes static noise. That could be the result here. I doubt very many American workers spend time on the Department of Labor website toiling through the reports. I suspect few even know it exists. The information on the government’s website will be accessed and researched not by union members, but primarily by politicians and antiunion lobbyists, who are paid by corporations to campaign against and undermine unions. And by employers, who will scour the documents looking anything that could be used to attack a union trying to organize its workers or that can help them in their collective bargaining strategies.
The policy question for debate is whether that is a proper use of the law, or not. Maybe you think it is. Explain why. If not, why?
Does Bill C-377 strikes a reasonable balance between the concern for protecting union members from corruption, and ensuring that unions are not bogged down by administrative burdens that interfere with their ability to perform their function, which is to advocate on behalf of working people?
Would you draft a law that looks different than Bill C-377? How so?
Should governments also follow the American lead, and require Employers to report on all activities and money spent on efforts to impede union organizing and access to collective bargaining?