Last December, Bill C-377—a bill amending the current Income Tax Act which requires unions to give full financial disclosure—passed through the third reading in the House of Commons. In other words, it was essentially on its way to becoming law.
The bill was originally designed to help provide greater transparency and accountability in labour organizations’ finances and tax exemptions.
On June 26th, however, Bill C-377 met with some resistance from Senate. Unclear about its overall purpose, the Senate concluded that the Bill should be sent back to the House of Commons for further consideration. They also gave a list of proposed amendments to help shape the revision process.
The Senate’s proposed amendments alter the potential scope of the Bill in the following ways:
- Unions would only be required to disclose disbursements and transactions over $150,000, along with the identity of the payer and payee, up from the $5,000 reporting threshold proposed in the original Bill;
- Only those officers, directors, trustees, and employees of a labour organization making $444,661 or more would be required to have their names and salary disclosed and published, up from the original $100,000; and
- The disclosure obligations would only apply to labour organizations with 50,000 members or more.
The primary issue(s) the Senate had with the Bill involved two main things: privacy and jurisdiction. On the question of privacy, the Senate was concerned with having the names and personal information of individuals that received a salary above the reporting limit publicly disclosed. With regards to jurisdiction, they wondered whether the legislation properly fell within the jurisdiction of the Federal government, or if this would be an inappropriate use of tax law to regulate labour relations.
Ultimately, the proposed changes have been sent back for review and now only time will tell what the next step will be. The House of Commons has three choices: to accept the amendments; to reject it and make their own changes; or to throw out the Bill entirely.
For more information about how Bill C-377 could impact your workplace, or to learn about the strategic staffing solutions we provide, contact Employment Professionals Canada today!