Bill C-377, which would require unions to publicly disclose payments made to outside groups or individuals in excess of $5000 and employee salaries over $100,000 was recently passed by the House of Commons with Government support. However, in a surprising move, an amendment introduced by Conservative Senator Hugh Segal and passed by a majority of Senators, including 15 other Conservative senators, gutted the key substantive provisions of the bill. It raised the salary disclosure threshold to $444,641, and changed spending disclosure threshold to $150,000. It also created an exemption for unions with fewer than 50,000 members, and inserted a provision requiring that solicitor-client privilege be respected in the course of any disclosures.

Justifying the Labour Bill
The official reasoning behind the original bill’s disclosure requirements, which are common in the United States, is that unions are tax-exempt, and union dues are tax-deductible. However, unions and some politicians were quick to point out that many individuals, businesses, and other organizations benefit from myriad tax deductions and do not have to contend with similar disclosure requirements. This bill also singles out unions for disclosure without making similar requirement of businesses.
The constitutionality of Bill C-377 is very much in question. Unions are funded by their members’ contributions, not taxes. Bill C-377 may very well violate constitutional freedoms of association and expression, as well as the constitutional division of powers between the federal and provincial governments. Privacy rights are also likely to come into play.

Will the Labour Bill Pass?
The House of Commons is on summer break, so this bill is unlikely to see debate until the fall at the earliest. Once the House votes on the bill as amended by the Senate, it will return to the Senate for another vote. The bill still has Government support, so it is expected that the House will vote to restore the bill to its pre-amendment status. Current thinking is that the rebelling Conservative senators will not block its passage a second time, and the bill will pass into law. At that point, a court challenge would become a distinct possibility. Canadian courts have tended to be protective of workers’ rights to organize in unions, but the result in any court challenge is never a sure thing.
Further developments in this case are something that all invested parties will want to watch closely.

This post was guest-authored by Nathan Rayan