The federal government has enacted a new tax law that requires unions to disclose financial information (Bill C-377, An Act to Amend the Income Tax Act, passed on June 30, 2015). The bill had been slowly progressing for four years. It was the first private member's bill to proceed to the Senate this session, and its passing was the final legislative act of the 41st Parliament.
An Act to Amend the Income Tax Act brings into effect provisions that require unions to disclose, among other things:
- details of officers or executives who earn over $100,000;
- financial statements including details of spending, borrowing and accounts receivable;
- details on all contracts over $5,000, including those with third party vendors; and
- money spent on lobbying, political activities and other non-labour relations activities.
The law will apply to fiscal periods starting on January 1, 2016. This disclosed financial information must be made available to the public by the Minister of Revenue. The enactment carries a fine of $1,000 for each day that a union contravenes the section, up to a maximum of $25,000.
Impact
The stated purpose behind the bill is to increase transparency regarding union finances, as unions receive special tax treatment under the Income Tax Act. The public, including union members and management personnel, will be able to view unions' financial information.
Whether this bill will remain in effect is uncertain. Both supporters and opponents expect that the law will be challenged in court. Most provinces oppose the bill on the grounds that it is unconstitutional because it allegedly infringes on the provincial regulation of labour. The federal privacy commissioner has taken the position that the bill is overbroad and infringes on privacy rights. Finally, the leader of the Liberal Party of Canada, Justin Trudeau, has announced that he will repeal the bill if his party forms a government in the next election.
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