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Canadian Bill to Force Unions to Disclose Political Activities Could Hurt Hockey and Football Players

Bill C-377, which amends Canada’s Income Tax Act, slaps new requirements on any labor organization. Everyone from the largest private-sector union in the country to the NHLPA has concerns.
July 3, 2015, 1:50pm
Photo by Helmut Fohringer/EPA

A controversial piece of legislation ostensibly aimed at increasing transparency in Canada's labor unions, and on track to become law by next week, could have negative implications for everyone from Sidney Crosby to your local shop steward, according to critics.

Bill C-377, which makes a number of technical amendments to Canada's Income Tax Act, essentially slaps new requirements on any labor organization, requiring them to disclose a sweeping amount of information.

Once the bill becomes law, every union in the country will be required to submit detailed financial records on its salaries, grants, lobbying efforts, and detail how much time its employees or contractors spent on "political activities, lobbying activities and other non-labor relations activities."

Failure to disclose the information would be a criminal offence, punishable by up to a $25,000 fine per offence.

The reporting requirements, which are significantly higher than for any other corporation, charity or organization under Canadian tax law, have been called punitive by labor groups. CUPE, the country's largest private-sector union, said C-377 is a "political attack on the right of freedom of association and free speech in Canada." They said it follows American legislation that was first introduced in the 1980s.

Member of parliament Russ Hiebert, the bill's author, defended the legislation.

"The bill does not regulate labor organizations and does not tell them how to spend their money," Hieber said in the House of Commons. He argued that, because union dues are tax-exempt (as is every sort of professional fee, under the Canadian tax code), unions should be held to a higher standard. "I believe there is a genuine public purpose served by requiring financial transparency in all institutions that receive a substantial public benefit," he said.

All this information would be published online, which unions say is just a political ploy to discredit the labor organizations, which have actively campaigned against the governing Conservative Party. They add that the increased costs associated with this new accounting could put many unions deep into the red.

There are a host of legal matters with the bill, according to lawyers, including that it may compromise solicitor-client privilege by forcing unions to publish any payments made to its legal counsel.

But an interesting group of opponents came out to oppose the bill.

In a letter sent to the Senate committee studying the bill in April, the National Hockey League Players' Association (NHLPA) raised serious concerns with C-377.

Because the NHLPA negotiates collective bargaining agreements between players and teams, it will be forced to report much of its expenses, just like any other union. The association says that, in so doing, the government will force the NHL to disclose otherwise confidential information on various deals and contracts for everything from licensing agreements to sponsored events.

"Requiring disclosure could well make it more difficult for us to conduct those negotiations, reach and administer those agreements," the letter reads.

That's not just the Canadian teams, either. The NHLPA represents every NHL team, but its offices reside in Toronto. So it may be forced to fork over information on every team from the LA Kings to the New York Rangers.

The Canadian Football League Players' Association had other concerns, outlined in their 2012 letter to the House of Commons committee that was studying the bill.

It was concerned that the language of the bill was "so broad" that it could force players to disclose how much they would be paying into their pension fund, which they say would be a gross invasion of privacy.

The whole debate has been highly acrimonious.

The legislation was originally a private member's bill, which usually don't become law. However, the government of Prime Minister Stephen Harper appeared quite eager to pass the bill into law.

After it passed the House of Commons in 2012, a highly uncommon democratic showdown ensued when the Senate — the membership of which is appointed by the prime minister and does not usually change legislation — gutted the bill in a narrow vote, to the displeasure of the bill's author.

But thanks to some quirks of parliamentary procedure, the amendments were erased and the bill went back to the Senate in its original form.

In its second time around, the Conservative majority in the upper chamber refused to allow amendments, and actively fought in defense of the bill.

Senator Don Plett sparred with one witness during committee study of the bill, after the lawyer suggested that the Senators were hypocritical to be going after unions, given that dozens of them are mired in scandal over thousands of dollars in inappropriate expenses.

The opposition members in the Senate mounted a filibuster to block the bill in late June, but were ultimately overruled when the majority actually voted to change the rules in order to curtail debate and push the bill to a vote.

So the bill is now on track to become law within a matter of days.

This is all against the back-drop of an impending summer election. In the lead-up, unions are expected to drop millions of dollars in an effort to oust the Harper government. That's made possible by unregulated pre-election spending by third parties.

Follow Justin Ling on Twitter: @justin_ling