On December 12, 2012, Bill C-377 (the “Bill”), which amends the Income Tax Act to require unions to provide comprehensive financial disclosure, passed the third reading in the House of Commons and was on the verge of becoming law subject to the approval of the Senate. The contents of the Bill were described in our December 14, 2012, In A Flash which can be found here. On June 26, 2013 the Bill met resistance from the Senate.
The stated objective of the Bill is to provide transparency and accountability in labour organizations’ finances and tax exemptions. However, heavy debate in the Senate about the purpose of the Bill resulted in significant changes which have been sent back to the House of Commons for further consideration. The Senate’s proposed amendments significantly limit the potential scope of the disclosure obligations imposed by the Bill:
The Senate debate appeared to centre on privacy considerations (the names and personal information of individuals receiving salary or making disbursements above the reporting limits would be publicly disclosed) and whether the legislation properly fell within the jurisdiction of the Federal government (or whether Parliament was using tax law to indirectly regulate labour relations).
The Senate’s changes have been sent back to the House of Commons for further review. The House of Commons can either, (1) accept the amendments, (2) reject the amendments and/or make further changes, or (3) abandon the Bill. Until both the House of Commons and the Senate agree, the Bill cannot receive Royal Assent and become law.
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