“And Now — The Bill” — How Bill C-377 will cost taxpayers big bucks

The following is an article from Blacklock’s Reporter:

Tax authorities expect to penalize unions millions of dollars under legislation due to pass the Senate this week, according to confidential Canada Revenue Agency documents.

An estimated $72 million a year in penalties will be due under Bill C-377, a private Conservative measure that compels unions to publish confidential data under threat of penalties. The figures were detailed in departmental briefing papers obtained by Blacklock’s but concealed from parliamentarians. A department official denied the figures even existed, replying when questioned: “We do not make estimates or assumptions on the volume or amounts of fines.”

Revenue Minister Gail Shea’s office did not comment.

“This is outrageous,” said Senator Larry Campbell (Liberal-B.C.). “Some of these union locals have a hundred members.”

The Act To Amend The Income Tax Act requires that all unions publish senior officers’ salaries and benefits; lists of assets and liabilities; loans receivable; time and money spent on organizing activities; members’ pension payments over $5,000 and other data, under threat of $1,000-a day fines.

And it requires disclosure of payments through any trust, fund or benefit plan with union members, with all details to be published on a Department of Revenue website.

“This is one of the worst bills we’ve ever seen,” said Campbell. “If this bill passes I will be working to have it overturned; this is not going to end this week.”

Documents obtained through Access to Information show tax department staff calculated up to 40 percent of unions and fund managers will be unable to file on time – a ratio that reflects “historical non-compliance rates” for charities with less onerous paperwork. Under C-377 maximum fines are $25,000 for non-compliance. Unions and fund managers have estimated potentially hundreds of thousands of personal transactions involving more than 3 million union members in Canada must be reported each year with itemized accounts, names and addresses.

“An estimated $72 million in late penalties ($1,000 per day) will be outstanding per year,” the department calculated.

Department staff noted 10 percent of registered charities miss their filing deadlines each year, while thousands more are late by weeks or months. Staff calculated another 30 percent of groups affected by C-377 will take years to become accustomed to filing requirements.

Revenue Minister Gail Shea’s office did not comment.

“It’s huge,” said MP Rodger Cuzner, Liberal labour critic. “The burden this will place on these small union locals, who in turn have to place it back on their membership, will impose a hardship – which accomplishes exactly what they set out to do.” “

The evidence is now overwhelming this has one purpose, and one purpose only – and that’s to attack labour in this country,” said Cuzner, MP for Cape Breton-Canso, N.S.

Compiling and publishing union information will cost taxpayers $14,896,683 over four years, according to the Deputy Commissioner of Revenue.

Blacklock’s requests for information on C-377 drew heavily-censored documents from the Privy Council Office, including 32 staff emails blacked out in whole or part, and 14 pages of redacted memos. However, records show that from the introduction of the bill by MP Russ Hiebert in October 2011, senior staff were uncommonly interested in the measure at the PCO, Canada Revenue and Department of Finance.

“Hiebert couldn’t write a bill,” said Senator Campbell. “When he came before the Senate committee he didn’t appear to know what he was talking about; there is no question this came out of the Prime Minister’s Office.”

Hiebert, Conservative MP for South Surrey-White Rock-Cloverdale, B.C., was not available for comment, according to his office.

In one November 20, 2011 memo, a Privy Council advisor asked that Revenue Minister Shea and Finance Minister Jim Flaherty personally approve wording on the measure: “However, we’re happy to review if all that is missing is your Minister’s signature.”

And in a separate November 22 email, senior Canada Revenue analysts were asked for advice on “alternative language” for C-377.

Tax staff even questioned Hiebert’s comprehension of his bill. One unnamed Canada Revenue officer wrote in a briefing document, “Clearly Mr. Hiebert feels the enacting of C-377 will not have any real cost to the government or budgetary implications to CRA. However, although the enactment of C-377 may not have a significant impact on the CRA’s approximate $4.3 billion department budget I believe it will have a very real cost to taxpayers…”

The bill passed the Commons December 12, a year after its introduction.

“We never took this to be an ordinary private member’s bill,” said MP Cuzner. “We knew Hiebert was the instrument to deliver this blow to organized labour.”

The bill goes to Third Reading in the Upper House this week after being cleared by the Senate trade and commerce committee.

In an unusual protest, Conservative members of the committee voted to express “concerns” over whether C-377 is constitutional, cost-effective or justifiable under privacy laws.

Senator Douglas Black (Conservative-Alta.) read into the record a statement that, after hearing from 44 witnesses, “the vast majority of testimony and submissions raised serious concerns about this legislation.

“Principle among these concerns was the constitutional validity of the legislation both with respect to the division of powers and the Charter,” Black continued. “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. The Committee did not offer any amendments because these substantial issues are best debated by the Senate as a whole.”

Black did not take questions.

By Tom Korski