Canadian Lawyer

LEGAL REPORT/LABOUR & EMPLOYMENT The legal side of the union dues disclosure dispute BY JUDY VAN RHIJN commentator with an opinion on Canada's unique labour structure has taken it as an excuse to air their views. Every topic from mandatory dues to privacy rights has been aired — raising controversy in an area that has been relatively stable and peaceful for the last 40 years. Now lawyers are weighing in on whether this political dispute has any credence in law. The most obvious dose of legal S dues disclosure bill, every politician and ince British Columbia MP Russell Hiebert tabled the union direct funding. But unions do not receive government funds. They are completely funded by mem- bers and should only have to be accountable to members." Tremayne believes the legisla- tion is necessary for reasons of transparency and the use of the Income Tax Act is preferable to province-by-province amend- ments. "You would end up with a patchwork, much like labour law provincially is a patchwork. Bargaining units might move to jurisdictions reality is there is already a legislative requirement for financial disclosure to union members in every juris- diction in the country. In fact, bill C-377 overleaps provincial jurisdic- tion by amending the Income Tax Act. The long list of items to be disclosed does not stop at mere financial infor- mation but requires identification of the name and address of the payer and payee, the purpose and description and amount of every transaction paid or received over $5,000, as well a record of the percent- age of time employees have dedicated to political activities and lobbying activities. During the political rhetoric regarding more favourable. Amendments to the Income Tax Act will create a level playing field. they thought were are required to provide a large amount of information which is then posted on the Canada Revenue Agency's website. "The position is that because union the proposals, unions have been compared on the one hand to charities and to private corporations on the other, when in fact they are tax-exempt entities, more akin to professional trade organizations and think-tanks, which are noticeably absent from the union-specific legislation. While the courts have repeatedly characterized trade unions as private entities, this leg- islation attempts to move unions into the same sphere as registered charities, which dues are deductible, there is a beneficial tax position," explains Andrew Tremayne, a partner at Emond Harnden, a manage- ment-side labour and employment law firm in Toronto. "The dues are not treated as income, so there is taxpayer subsidy to a degree. fully comparable to charities. "Charities are funded by donors and the donors get the tax benefits, but unions need to be a little more transparent than other private companies because of the analogy of ben- eficial treatment." Tony Glavin, of Glavin Gordon " But, he says, unions are not take away the tax exempt status for labour organizations and labour trusts if they did not comply with all of its disclosure requirements. That bill was withdrawn by the Speaker of the House of Commons. In his opinion, the bill amendments would have created a new category of labour organization constituting a class of taxpay- er that does not currently exist, so should have been brought as a government bill. "Bill C-317 was peripherally involved Clements in Vancouver, disagrees. "Charities are held to public account because tax dollars are used to assist them, whether through the use of tax receipts or in tax matters," recalls James Harnum, a pension and benefits lawyer at Koskie Minsky LLP in Toronto. "Bill C-377 is no longer in any way related to taxation. It is using the Income Tax Act to attack unions, which the federal government is not generally able to do because it is not their jurisdiction. They've said: 'Okay, we can't take away your tax exempt status so we'll just penalize you. ' It simply serves as www.CANADIAN Lawyermag.com N O VEMBER / D ECEMBER 2012 43 of the tax act for purposes unre- lated to taxation. The first incarna- tion of this legislation, tabled in bill C-317 in late 2011, purported to Other lawyers question the use " mAtt dAley

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