Bill C-377: Déjà Vu All Over Again

On November 4th, Hon. James S. Cowan (Leader of the Senate Opposition) rose to speak on Bill C-377 at second reading. Senator Cowan clearly points out, as have many of his colleagues in the past, the problems with this Bill including:

Following are some key excerpts from Senator Cowan’s argument. The fulltext of his speech is available on the Senate Hansard Site.

Groundhog Day:

This is a debate I had hoped we had seen the last of. Certainly it has been many months — indeed, it has been more than a year — since we thought we had disposed of this bill. Now, all these months later, we find ourselves back at square one — the parliamentary equivalent of Groundhog Day. While Bill Murray’s character in that movie was forced to relive the same day until he had changed for the better, we’re being forced to redo our consideration of the bill in the hope that we will agree to change for the worse. That would be a mistake, colleagues.

After this extensive examination, the committee prepared a very unusual report. Let me remind everyone what it said:

While the Committee is reporting Bill C-377 without amendment, it wishes to observe that after three weeks of study — hearing from forty-four witnesses and receiving numerous submissions from governments, labour unions, academics, professional associations and others — the vast majority of testimony and submissions raised serious concerns about this legislation.

Principal among these concerns was the constitutional validity of the legislation both with respect to the division of powers and the Charter. Other issues raised include the protection of personal information, the cost and need for greater transparency, and the vagueness as to whom this legislation would apply.

The Committee shares these concerns.

To finish the story, it was on June 26, 2013, that we amended Bill C-377 and ordered that a message be sent to the other place informing them that we had passed their bill with amendments, to which we desired their concurrence. However, colleagues, Parliament was prorogued before the other place had an opportunity to consider our amendments. They never had an opportunity to read our observations and consider the many issues raised in our debates. It is as if our message and amendments simply disappeared into outer space.

Colleagues, I believe the members of the other place should have the opportunity to consider and pronounce upon our amendments. The many Canadians who took the time to present their views to our committee, whose voices were reflected in our committee’s observations, in our debates here in the chamber and then in the amendments themselves deserve to have their contributions considered by the other place.

My own preference would be to once again quickly send our amendments down the hall for consideration, without first having to go through the whole process here all over again. I’m curious whether the new sponsor of the bill in this chamber, Senator Runciman, would be agreeable to such an approach.

As I studied Senator Runciman’s speech, I was struck by what wasn’t there. There was no attempt to argue that circumstances have changed since we last considered Bill C-377. No new arguments were raised to answer the many, very serious concerns with the bill held by senators at that time on both sides of the chamber.

So what were those very serious concerns? Senator Runciman’s decision not to raise or deal with them doesn’t mean that they no longer exist, or that they were magically resolved while our attention was diverted elsewhere. I’d encourage colleagues to reread the excellent debates we had last year to be reminded of what is at stake. For now, I’ll just take a few minutes to remind honourable senators of just a few of the very troubling problems we found.

On the Disclosure Requirements:

Our former colleague Senator Segal put it well when he said:

At the disclosure level that is now in the bill — $5,000 — a two-year supply of coffee, a used car, a new computer system or printer, or the replacement of plumbing or a boiler at a union headquarters would qualify for explicit disclosure. Is this all that CRA has to do?

Under this bill, every small business that has a contract for more than $5,000 with a labour union must have the value, purpose and description of that contract posted on the Internet for its competitors to examine and then undercut. Is this the way to help our small- and medium-sized businesses to thrive, or foster fair competition in our economy, to force some businesses, simply because they happen to do business with a labour organization, to open up confidential details of their private business contracts to their competitors?

Subsection (vii) is particularly problematic. Not only is there an obvious punctuation error, but the names of countless individuals identified must be posted on the Internet, with their salaries, for the world to see. Here’s what it says:

As drafted, the subsection would require disclosure of disbursements to officers, directors and trustees, and to employees earning more than $100,000. That’s clear enough. But what about the phrase:

. . . persons in positions of authority who would reasonably be expected to have, in the ordinary course, access to material information about the business, operations, assets or revenue of the labour organization or labour trust . . . .

Many people would presumably have “access” to “material information about the business . . . of the labour organization or labour trust.” That could include anyone who has access to a filing cabinet, where normal documents concerning day-to-day operations are kept. What is meant by “persons in position of authority”: Authority over what, or whom? Clearly it is someone other than officers, directors or trustees as they have already been covered.

Interestingly, when the Minister of National Revenue was asked in the other place to produce the same information listed in Bill C-377 with respect to the people in the Canada Revenue Agency who administer its searchable charitable database, the minister replied:

. . . the Privacy Act precludes the CRA from disclosing personal information about its employees.

Last spring, a question was placed on the Order Paper in the other place asking how many staff in the Prime Minister’s Office earned salaries over $150,000 annually, over $200,000 and over $250,000. It also asked about bonuses paid to those staff. Notice, colleagues, it didn’t ask for names or individual salaries but just how many staff were in each category — significantly less information than is asked for in Bill C-377. The Prime Minister’s Parliamentary Secretary, the notorious Paul Calandra, tabled the following response on March 6, 2014:

Mr. Speaker, in processing parliamentary returns, the government applies the Privacy Act and the principles set out in the Access to Information Act, and the information requested has been withheld on the grounds that the information constitutes personal information.

On Privacy:

The Privacy Commissioner was very clear when she testified about Bill C-377 before our Banking Committee. She said that naming individuals as proposed in this bill would be

. . . a significant invasion of their privacy. By not restricting web searches in some way, given the power of web searches these days and the ultimate replicability of information on the web, since the web never forgets and people have the right to be forgotten and other issues like that, I think I would have problems with the bill. I would have problems with it.

Bill C-377 would also require labour organizations to disclose information protected by solicitor-client privilege, a fundamental and critical privilege in our legal system. The Federation of Law Societies of Canada, the national coordinating body of the 14 provincial and territorial governing bodies of the legal profession in Canada, came before our Banking Committee in May of 2013 to express its grave concern about this.

I mentioned that the disclosure obligations set out in the bill apply not only to labour organizations but also to labour trusts. Ralf Hensel, General Counsel and Director of Policy for the Investment Funds Institute of Canada, testified before our Banking Committee in June 2013. Let me read to you what he said:

Labour trust is cast in so broad a manner that we believe on a fair and reasonable interpretation it captures any trust or fund offered to the public in which there is a single unit holder or beneficiary who is a member of a labour organization. That fund would then be subject to the bill’s full disclosure requirements.

At its essence, then, any mutual fund that has just one investor who is a member of a labour organization would be tainted and therefore subject to the bill. Whether the tainted fund would need to report on the personal investments of only those who are members of a labour organization or all the investors in that fund is not entirely clear, but we cannot believe that requiring public reporting by public mutual funds on the personal investing and savings activities of investors, whether or not members of labour organizations, was the intent of the drafters and promoters of this bill.

On Wasting Time and Money

Let’s be clear, colleagues. Bill C-377 is not really about who must account for a taxpayer-subsidized benefit. Bill C-377 is an anti-union bill. It is designed to bury labour unions in so much paperwork that they will not be able to represent their workers as fully and capably as they do now. Why labour unions? The conclusion being reached by many Canadians is that it is because unions have been less than enthusiastic about how this government has handled labour relations. Bill C-377 is really a message to Canadians that it is no longer safe to disagree with the Government of Canada. It’s a message that if you disagree, then the heavy arm of the law can and will be brought down upon you. The bill uses the Income Tax Act, but no one should be, and frankly no one is deceived by that.

We have all heard our colleague, Senator Downe, press the government repeatedly about the need to go after the very significant sums of tax owed to Canadians taxpayers but hidden offshore. Canadians learned a few days ago from the government’s own Public Accounts that last year alone tax cheats cost federal revenues $220 million, and CRA has so far recovered only $2.2 million with hopes of collecting another $9.2 million. In other words, approximately $210 million is owing to the CRA that may never be collected. The government’s budget cuts have meant that the CRA has already downsized several times, trying to make do with less. Do we want CRA employees investigating and collecting the hundreds of millions of dollars owed in unpaid tax taxes? Or do we want them to spend their time checking whether a particular union local of six members fully disclosed to the world at large all its spending on education and training, as required under subsection 18?

Labour unions are already required, by law in most provinces and by their own constitutions, to provide their members with financial information and that is how it should be. A corporation is responsible to its shareholders and a labour union is and should be responsible to its members. Senator Runciman took issue with this because, in his words, “Disclosure provisions are in place in only 8 of Canada’s 14 tax jurisdictions, and they are limited in their scope and vary from province to province.”

On Constitutionality

This brings me to a critical problem with Bill C-377, namely that it’s an attempt by the federal government to impose on the provinces its own view of what provincial legislation should be, and that is unacceptable.

This is not a situation, colleagues, where provinces have been silent or where there is a legislative void waiting to be filled. The provinces have spoken. The problem is that this federal government does not like what the provinces have said. Several constitutional experts testified before our Banking Committee that Bill C-377 is an unconstitutional intrusion into the areas of provincial legislative responsibility under the division of powers in our Constitution. Bruce Ryder is a constitutional law professor at Osgoode Hall Law School. He taught constitutional law for more than 25 years.

This is what he told the committee:

I am here to share the bad news that Bill C-377 is beyond the legislative jurisdiction of the Parliament of Canada. Its dominant characteristic is the regulation of the activities of labour organizations, a matter that falls predominantly within provincial jurisdiction to pass laws in relation to property and civil rights pursuant to section 92.13 of the Constitution Act, 1867. If Bill C-377 is passed by Parliament, it will be declared unconstitutional and of no force and effect by the courts.

Professor Ryder was not alone in his opinion. Other constitutional experts expressed the same view, and so did several provinces that sent representatives or wrote to the committee. Five provinces, large and small, with governments of all political stripes — Liberal, NDP, Parti Québécois and Conservative — said this bill is not constitutional, it’s not needed and in fact it would disrupt labour relations in the province. A provincial minister who flew to Ottawa to testify before our committee described the bill as “a grenade in the room of collective bargaining.”

And his conclusion:

Colleagues, in June of last year, the Senate spoke with a powerful, cross-partisan, independent voice. We spoke up for the provinces we represent, five of which told us that the bill is not constitutional.

We spoke up for the Canadian value of privacy, against a bill that would force the public posting on the Internet of private citizens’ salaries for all neighbours, friends, relatives and co-workers to see.

We spoke up for principles of basic fairness. One newspaper referred to Bill C-377 as “a witch hunt.” In 2013, we stood as a chamber and refused to participate in that hunt.

I’m very disappointed that the government has chosen to bring this bill forward for debate. When it sat on the Order Paper for a full year, I hoped that it would die a well-deserved death. But, colleagues, if we’re going to be forced through the government’s version of Groundhog Day, let’s make sure we do the job properly.


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