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The Progressive Economics Forum

Private Member Bill on Union Financial Disclosure

Conservative MP Russ Hiebert tabled his private member bill in the Commons yesterday, calling for changes to the Income Tax Act to require unions (which are income-tax-exempt under the Act … duh! since they are, after all, non-profit organizations) to publicly disclose their financial statements.

Here are a few quick points that came to mind in thinking about this odd item.  (See also the CLC’s news release responding to the bill.)

  • Under Prime Minister Harper’s top-down rule, private members’ bills (at least from his side of the Commons) are clearly no longer what they were intended to be: an opportunity for parliamentarians to table hobby-horse issues of long-standing personal interest before the whole body.  Now it is a tool for practicing “dog-whistle” politics: addressing hot-button issues that help to motivate the Conservatives’ red-meat base, but in a way that allows Harper himself to maintain some distance and appear “statesmanlike.”  [A dog whistle, of course, is a way to get your dogs to come running, but without everyone else hearing you!]  It’s inconceivable that this bill does not reflect a decision by the PMO to elevate the attack on unions that is already a defining feature of this government.  Same is true for the other hot-button issues also being pursued via Conservative private members’ bills, including genuinely dangerous ideas like eliminating the laws against hate speech or dismantling the gun registry.  If you google “Russ Hiebert” and “union finances” or “union financial statements,” you get precisely zero hits that predate this week … suggesting that this is truly a topic that has only recently caught his personal interest.
  • The actual issue contemplated by the bill (requiring unions to publicize their financial statements) is an invented non-problem.  The CAW, like other unions, discloses its audited financial statements regularly to its elected board of directors, to all union locals, and to delegates to its conventions.  Annual audited statements must be filed with government labour boards, both provincially and federally.  Individual members can request the statements from their local, from the national union, or (if they are “frightened” by the big bad union bosses) directly from the labour boards.  The whole process of auditing and disclosure, and even the pay received by the union’s president and staff, is specified right there on-line in the CAW’s constitution.
  • How ironic that the Conservative government should launch a phony crusade for financial disclosure by unions, at the moment in time when Conservative luminaries (like Tony Clement and Peter Mackay) are facing financial disclosure problems of their own.  Mere coincidence, you say?  I think not.
  • It is interesting to compare what unions disclose through their internal democratic processes, reinforced by the requirements of the labour boards, with what corporations must disclose.  Publicly-traded companies, of course, are required to disclose financial statements (some of them audited, not all), executive compensation (top 5 execs), and other details to their own shareholders (and potential shareholders), by virtue of securities regulations (not tax law).  Private companies, however, don’t have to disclose a thing.  This includes most Canadian subsidiaries of foreign firms — which are some of the most important businesses operating in Canada.  A ruthless multinational like U.S. Steel, for example, in the process of trying to starve out its workers in Hamilton, doesn’t have to divulge one line of its Canadian financial statements to the Canadians who depend on its activity and presence.  Why focus the demand for transparency against unions, who are clearly the David in these conflicts with uber-secretive Goliaths?
  • Mr. Hiebert’s justification for using the Income Tax Act as his angle for attacking unions is because, he claimed in a media scrum yesterday, unions get “hundreds of millions of dollars of benefits” from the Canadian government, and hence owe taxpayers this kind of transparency.  That’s incredible nonsense.  Unions receive almost no government subsidy or assistance whatsoever (maybe a few government-subsidized interns working in some union office somewhere? support for a few union-sponsored training programs?).  Unions don’t pay income tax, because they aren’t profit-making entities (and are thus treated just like any other non-profit organizations).  Union dues are tax-deductible for individual union members, on the reasonable assumption that you pay union dues in order to get higher wages; when you spend money to make money, you always get to deduct what you spent when you pay tax on what you make.  (That’s equally true for businesses, financial investors, and other tax entitites.)  Tax payments by union members are still higher, because their wages (even after union dues) are higher.  There’s no credible way in which Mr. Hiebert can reasonably claim that unions are significantly subsidized by Canadian governments or taxpayers.
  • The most ominous aspect of this charade was the very quick, orchestrated way in which Mr. Hiebert’s initiative was ringingly endorsed by a whole community of anti-union and right-to-work lobby groups — including Merit Canada (the union-free construction association), the Canadian Centre for Policy Studies (tiny anti-union think tank in Ottawa), and the Fraser Institute.  They all highlighted this measure as being a first needed step toward bringing unions in line.  And they all highlighted the problem of “forced dues collection” as being one of the many nefarious aspects of unions’ tawdry existence.  This is code language for an attack on the Rand formula model of union security which underpins the Canadian industrial relations system.  I suspect that these lobbyists, working quietly with Conservatives, are planning a long-term assault on the right to collective bargaining in Canada — a right which would be effectively abolished by the implementation of Mississippi-style right-to-work laws, as they propose.  The majority Harper government has already indicated its contempt for the right to strike (which, lest we forget, is supposed to be a fundamental human right, according to the UN, the ILO, and other august bodies).  I suspect that a frontal attack on the right to unionize period is their ultimate goal, and the theatrics around this bill are just an opening preview.
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Comments

Comment from Andrew Jackson
Time: October 5, 2011, 1:18 pm

The disclosure specified in the Conservative Bill is even more intrusive than Form LM-2 which has to be filed by US unions with dues of more than $250,000. Completion is estimated to require 710 hours in the first year and 536 hours thereafter – or about three months full time work. Check it out here

http://www.dol.gov/olms/regs/compliance/lm2_blankForm.pdf

Comment from Barry Cameron
Time: October 5, 2011, 2:47 pm

The reason for opening the books of charities seems simple: there are a bewildering number of charities and an enormous range of contributors. Much needs to be monitored. Only churches are, as far as I know, directly member funded within the large rubric of charities, thought eheir may be others, as unions are. In other words, charities are a different sort of fish from unions, which are exclusively member funded. I’ve used this argument in addition to the obvious one that, given the timing, this is a blatant assault on both unions and the NDP in addition to being the first volley in an upcoming major war. You are dead right.

Comment from Kelsey
Time: October 6, 2011, 10:11 am

Actually it is an excellent opportunity for Unions to make detailed comparisons between their Finances and Conservative political fundraisers and their patronage appointments. Who gives more value to their average contributor?

Attack with a Counterattack, that is the way to outwit the cunning Conservatives

Comment from Kelsey
Time: October 6, 2011, 11:31 am

Interesting timing for the Private members bill, presented right the next business day after Alison Redford became Alberta’s premier elect buoyed/bribed last minute surge from teaching staff vote…. Unionized. She was backed by just one MLA former Art Johnston who lost his PC nomination maybe like Mr Harper she will appoint him in the cabinet nevertheless. ReformConservatives appear mighty pleased with her election. There are quite a few parallels with PM Harper’s style, she tried to prorogue the legislature the day after her election and then flip flopped on this issue, and announced there will be a fall sitting after all.

Jim, you are so right, MP Russ Heibert has recently stepped into this debate. Problem is Conservative MP’s lack ego and self-worth, it never bothers their lazy minds that they are set up by the PMO all the time.

Comment from Andrew j
Time: October 10, 2011, 5:45 am

It is interesting to note that the Fraser Institute, which has been pushing for hyper detailed public financial disclosure on the part of unions for a long time, itself discloses very little on it’s charity return. Only about one quarter of their revenues come from individual tax receipted donations and the biggest chunk by far seems to come from right wing foundations. Corporate donations are not disclosed.

Comment from Kelsey
Time: October 27, 2011, 10:58 am

ReformCons are like a migraine attack, you never know where and when one may strike you. Barely, had unions dodged financial disclosure bill, Quebecor-CBC battle heats up. When CBC released a press release questioning Quebecor’s source of funds, Quebecor bristled and conveniently Federal watchdog Ethics Commissionaire Suzanne Legault steps in the debate. There is always minimally at least two pronged approach against Unions. I wonder for how long she was on this reconnaissance mission. I see that NDP’s Joy McPhail and Alexa McDonough cannot possibly repeat their past successes for the benefit of ReformCons, they have found other enthusiastic partners to do their bidding. Recall Conservative appointed the first Public Sector Integrity Commissioner Christiane Ouimet investigated only 3% of complaints her office received and was sent off with a big payoff just before AG could audit. Neither is it shocking that back in their base Alberta’s Ethics Commissioner Neil Wilkinson okay-ed Stephen Carter’s position as Chief of Staff to Premier Alison Redford despite his very recent default on business debts. So it is okay to appoint Carter in one of the most powerful position in the province if his misadventure left Calgary University out of pocket, it is okay as well to deprive public institution by private corps yet these same for profit institutions and their personnel turn around and appoint themselves as the vanguard of taxpayer funds and scrutineer of public institutions. Nice racket going on there!

Do not be fooled by Quebecor’s new mission as protector of tax payer funds or transparency, the end game here is deconstruction of Canadian psyche. That is why by flooding CBC with information requests they want to get hold of their programming strategies and use that to destroy CBC’s very being of existence. If CBC is defunded, it won’t be too long before Canadians will be instead fighting amongst themselves to keep their ignorance.

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