Later today the House of Commons will vote on amendments and then on an amended Private Member’s Bill, which would force Unions and other Labour Organizations to disclose how they spend their members’ dues. The purpose of Bill C-377 is laudable: to force union transparency and to make union leaders accountable for how they spend their members’ dollars. This would be accomplished via a publically assessable website. But the question remains: accountable to whom??
I have previously posited in this blog (and to the over 400 constituents) who have called, written and e-mailed me, asking that I not support Bill C-377, that I absolutely agree that union members ought to have an unfettered right to see how their union bosses spend their cash. What is less clear to me is that members of the public generally have a similar right.
As a non-member of every union in the world, what possible interest do I have in how unions spend their cash?? Well, the proponents argue that because unions operate tax free, because strike pay is non-taxable and most importantly, because all of it is funded by union dues that are tax deductible, that somehow the public has a legitimate interest in how these forgone tax dollars are spent.
It’s not the worst argument ever proffered; in fact it is pretty clever. The problem is it’s fallacious.
The reality is that the public is generally not entitled to this type of disclosure from private organizations who receive even direct funding from government. Although it is public information that the Aboriginal Multi-Media Society of Alberta recently received money from Heritage Canada to promote aboriginal language radio programming, the Society is not required to open its books to the public. Similarly, when the Edmonton Women’s Shelter receives grants to combat violence against women, they are not required to disclose publically how much they pay their Executive Director.
Regardless and notwithstanding that unions do not receive direct financial assistance from government, the brains behind Bill C-377 argue that tax deductible union dues are “akin to public dollars”. Well they aren’t (not if akin means equal to). The cost to the federal treasury of a union due dollar is the marginal tax rate of the employee from which it is deducted. Even for highly paid building tradesmen, that is well under 50 cents.
But that really misses the point. The list of entities that benefit from being operated on dollars that are not taxable in the hands of the person or entity cutting the cheque is indeed a long one. The Law Society, The Bar Association, even the Chamber of Commerce operate entirely on fees that were tax deducted by the person or company paying those fees. As a lawyer, my corporate clients wrote off the cost of legal advice and my law firm deducted the salaries of our staff and our rent before the partners calculated “taxable income”. In fact, hockey tickets and drinks before the game for clients are a hospitality expense and entitled to a 50% tax deduction. Yet, neither the Law Society, Bar Association, Chamber, the law firm, my secretary, the firm’s landlord, the Oilers nor the nearby pub have to disclose how they spend “tax deducted dollars”.
Why?? Because tax deductibility is not the same thing as public dollars. If it were otherwise, every dollar not subject to taxation theoretically would be a public dollar. I find the notion troubling that the public somehow has an interest in tracking every dollar including those not subject to taxation. There can be no public interest in how private entities spend private money legally.
The inability of the public to do anything with this information reinforces the notion that only members of the club ought to have access. If it is disclosed that a union president’s salary or expenses are exorbitant or that the union is spending money on “questionable” political activities, what is a member of the public to do with that information?? Only members of the club can vote in new leadership to change the direction of how the dues are spent.
I suspect that amendments to Bill C-377 will improve the bill considerably. By changing the threshold from $5,000 to $100,000, removing addresses of recipients and allowing electronic filing, certainly address some of the privacy concerns and the cost of compliance.
However, the Bill is still based on a fallacious premise—that tax deductibility creates a public interest. As a member of the public, who has no intention of ever joining a union, I am just not that interested nor entitled and certainly not as interested as those who are promoting passage of this legislation, who claim to be entitled.