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Bill C-377: The Conservatives’ Private Members Bill on Union Transparency

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 folks.  

The Bill

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. Indeed, if this Bill was about regulating the relationship between unions and their members, wouldn’t clearly fall into provincial jurisdiction?  The Bill’s supporters say it is about informing ‘taxpayers’–you and me.  Remember, it is a tax law.  

The law, if enacted, would cost taxpayers tens of 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. Is there nothing better the government can spend my money on?

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 concerned also that the government’s interest in Bill C-377 has less to do with informing the public, and more to do with arming the Tories and their anti-union supporters 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

MP Russ Hiebert Has Proposed Extensive Union Reporting

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:

  • Payments to any of their employees for the purpose of causing them to persuade other employees with respect to their bargaining and representation rights, unless the other employees are told about these payments before or at the same time they are made;
  • Payments for the purpose of interfering with employees in the exercise of their bargaining and representation rights, or obtaining information on employee or union activities in connection with labor disputes involving their company; and
  • Arrangements (and payments made under these arrangements) with a labor relations consultant or any other person for the purpose of persuading employees with respect to their bargaining and representation rights, or for obtaining information concerning employee activities in a labor dispute involving their company.

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.  You think American ‘taxpayers’ spend time on the Department of Labor website toiling through the reports.  Few even know it exists.  The information on the government’s website is accessed and researched not by Joe Public or even 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?



12 Responses to Bill C-377: The Conservatives’ Private Members Bill on Union Transparency

  1. Malcolm Buchanan Reply

    October 24, 2012 at 12:33 pm

    An excellent analysis of Bill C-377. Hopefully your analysis has been forwarded to the Canadian Labour Congress and to provincial labour organizations. The Federal NDP should also be forwarded a copy.

    The unfortunate fact is that there is little public awareness of the potential dangers of Bill C-377 including a violation of privacy laws, threats to client-solicitor privileges, etc.

    Is it acceptable to you to copy your article so it can be shared with others? To be able to quote you?


    Malcolm Buchanan


    Hamilton, Burlington and Oakville Chapter of the Congress of Union Retirees of Canada.

  2. Jon D. Reply

    October 24, 2012 at 12:35 pm

    “Bill C-377: Costly and Discriminatory”

    Has there been one complaint from a union member not receiving requested information?

    Has the MP or others bothered to use Google and search “union name” and audited financial reports ?

  3. Susan F Reply

    October 25, 2012 at 2:58 pm

    Wow, this doesn’t just cover certified unions, it sweeps in any association of employees that bargains collectively. I am sure employers who have fostered non-certified employee associations to avoid unionization will appreciate the added burden on their more comfortable labour relations partners.

    • Doorey Reply

      October 25, 2012 at 3:35 pm

      Hi Susan, good point.

  4. Keith W Reply

    November 30, 2012 at 1:10 pm

    What you fail to mention is that there are workers who do not belong to unions, but as a employee of a unionized shop must contribute dues to the union. Those employees, under present legislation, do not have any right to see any financial report on the union to which they are forced to pay dues.

    • Doorey Reply

      November 30, 2012 at 6:33 pm

      Thanks Keith. That’s a fair point. But you are talking about a very small percentage of people who are in a bargaining unit and not union members, according to statistics. The question then is whether the government should spend millions of dollars in taxpayer money and force unions to incur big expense and administrative burden by creating a huge bureaucratic system of information collection and dissemination, just to appease a small percentage of the population who pay union dues but refuse to become union members. If this is a pressing social problem, a simpler and far less costly law would simply require unions to provide the audited financial statements to all dues paying workers, and not just ‘union members’. In my experience, unions are not nearly as secretive as the Conservatives try to paint them. If the concern is the one you raise, then Bill C-377 is overkill in the extreme.

  5. Line Merrette (fem_progress) Reply

    November 30, 2012 at 3:28 pm

    Pretty clear this is an attempt to prevent unions from financing progressive causes like student strikes, gay rights, progressive political parties… The Cons are even after the Mennonite magazine for defending social justice.

    It leads directly to Wisconsin and right-to-work (Orwellian misnomer) legislation.

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  7. Cameron Reply

    December 11, 2012 at 2:14 pm

    Thank you for a link to the actual bill. For all the reports and stories this is the first time I’ve seen a link and read it!

    I’m sorry this level of reporting is not required for all non-profits and charities. It should be. That said, I think the government has gone a bit too far in some of the things they’re asking for. They have left a lot they could ‘concede’ and still get the law passed.

    The Ontario law about a copy of financial statement is interesting for two reasons. Here in northern Canada no such law exists, and my union is only require to ‘show’ me a copy. I cannot ‘have’ a copy, nor can I make notes about what I see. Also the information available for me to ‘see’ is at a very high level. I cannot know how much they spend on lawyers, how much money they donate or to who. I do not know how much is spent on employee training, pensions, health benefits – that is a lump sum under a heading ‘employee benefits’. Same for expenses. I know they have xmillion in cash and investments, I cannot find out how those investments are managed or why so much or so little is kept as cash and investments. In short, they really aren’t answerable to the union members.

    I would really like some answers on how my dues are being spent. For example, my union provides almost no training or development for union members, but I can’t see any line item that tells me how much they are spending on it, or to compare it to anything else. If they’re spending more on political dontions than member training that would be a good point for discussion.

    In the FP article it states:”Salaries paid to CAW and CEP leaders and staff are outlined in our respective constitutions and must be approved by our members.” This is not correct, salaries in my union are decided by delegates who are for the most part hand picked by the union exec. The average union member does not have a vote on anything in my union. Theoretically we can vote for who our delegates are, but big deal – there is almost no member involvement because they don’t feel it’s relevant to them and they don’t have a voice. The union president can veto delegates, so much for my vote.

    FP again: “Most privately held businesses face no legal requirement to disclose financial reports, executive compensation, or other internal matters.” Unions are most assuredly NOT a business. They are not for profit.

    As to transparency. Public run organizations are subject to Access to Information legislation, unions are not. Getting answers from my union is like pulling teeth. I hope for all our sakes that is an exception and not the rule.

    I think this will be the best thing ever for the labour movement. It will make them be more accountable, cause them to start engaging with members and to stop ignoring us. It may be painful at first, and I’m sure the conservative party will try to attack, but it will be best in the long run.

    I want a union, I also want to know what they are doing with the money entrusted to them to advocate for us.

    Stay tuned for the long rumoured legislation to allow employees to opt not to pay union dues. That is going to be a doozy.

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  10. David Pouliot Reply

    January 11, 2013 at 7:09 pm

    As a union member (ATU) who has been involved in a year long struggle to get financial disclosure from my union over the salaries paid to our elected officials I have mixed feelings over the Bill C-377.

    My Local has refused to provide a breakdown of the salaries and expenditures of the members of our executive board to the membership on the grounds of “privacy and confidentiality” and appeals to the International have so far fallen on deaf ears. I read about how “democratic” Canadian Unions are and that Bill C-377 is not about making unions transparent to their members, and I agree with that for the most part. But the reality is that some unions do not abide by their statutory requirements to provide information and repeatedly obstruct the rights of their members and outright refuse to provide this basic financial information as was the case in Hubner et al. v. UFCW, Local 247 (a decision of the B.C. Labour Relations Board).

    What Bill C=377 also overlooks is the protections provided to union members in the Labour Management Reporting and Disclosure Act (LMRDA)to free speech and due process, to criticize union officials, to express any viewpoint at union meetings, to distribute literature outside the union hall, and to hold separate meetings without interference from union officials. Members of CUPE Local 1974 in Kingston were sued by the officers of their Union for distribution a flyer raising questions about the locals finances (Rodriques v. Toop, 2011 ONSC 794 CanLII). There is also a great hostility by the Union leadership to the use of the internet by rank and file activists to communicate issues of concern with other members. Take the case of Perry Speranza a 32 year electrician and active member of IBEW Local 353 in Toronto, Canada, who, in February 2006, was brought up on union charges for operating an “open forum” type website called OurLocal353. Speranza was charged and convicted in Canada, and as law professor Michael Lynk, of the University of Western Ontario, explains “unions in Canada have fewer restrictions on how they deal with membership dissent under Canadian labour law… When a union member runs into problems after criticizing a union executive, his or her only legal remedy would likely lie in convincing a court that the union violated its own constitution by imposing discipline for non-slanderous speech.” For Speranza this is all really about fear of the members, a fear which can only harm the union. Speranza subsequently brought a motion in his local that they should campaign for a Canadian version of the LMRDA.

    Unions in Canada should oppose Bill C-377 from the point of view that it does not do enough to expand the democratic rights of union members, and don’t let the right hijack this by restricting it to an issue of “opening the books.”

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