I do not understand why the opposition would be opposed to labour organizations. It seems that we are getting some heckling from members on the other side who do not agree with us when we say that they play a crucial, multi-faceted role in our society. They contribute to the Canadian workplace in many ways. Currently there are over four and a half million workers who are union members, representing over 25% of Canada's civilian labour force.

Strong labour management relations contribute to our country's economic prosperity and the economic security of all Canadians. Labour organizations play a direct role as advocates for organized labour. They are also important in the negotiation and enforcement of collective agreements and labour standards. Further, these organizations have played a pivotal role in the past in advancing some of the most fundamental improvements in the workplace. Issues they have contributed to include advocating for fair wages, reasonable working times, providing training and learning for employees, protecting vulnerable workers, improving working environments for women and promoting compliance with and enforcement of labour laws across Canada.

As a part of that, these organizations are given generous benefits through the tax system. Labour organizations are exempted from tax on their income, and members are entitled to deduct any dues paid to such organizations. Notwithstanding these generous tax benefits, labour organizations are not required to disclose their financial activities in any significant detail. This is despite the fact that they are democratic organizations supported by dues-paying members and are subsidized by the Canadian tax system.

We believe that democratic values go hand in hand with openness and transparency. Today's bill proposes to amend the Income Tax Act by requiring labour organizations to file a standardized public information return with the Canada Revenue Agency each year. Currently, there is no separate information return for labour organizations. By requiring such a return, the bill promotes better accountability to Canadians.

The bill will also improve the quality of information provided by labour organizations to their members and to the public at large. This would be done by requiring such organizations to submit not only their financial statements but also separate schedules that provide specific details on the activities in which a labour organization engaged in any given year and the amounts devoted to those activities. Examples of the information a labour organization would be required to report include details on any loans it made, its investment activities, the amounts spent on labour relations activities, as well as amounts paid to executives and on general administration.

Information submitted by labour organizations would be made available on the website of the CRA in a searchable format. In this regard, today's bill would enable members of labour organizations to satisfy themselves that their organization is operating in an appropriate manner. Canadian taxpayers would also have access to this information, making labour organizations more accountable for the generous tax benefits they are provided.

Finally, the bill proposes that any labour organization that did not file an annual information return within six months from the end of its fiscal period would be subject to a monetary fine for non-compliance. Quite simply, we believe that since labour organizations are provided the privilege of a tax exemption, they should be accountable to Canadians on how they operate and spend their funds.

In addition, there is concern about the quality of the information being provided by labour organizations. Even where disclosure requirements exist, these are often limited in scope. While some jurisdictions require that audited financial statements be disclosed to members, this, again, is not uniform across Canada. Further, financial statements present only limited financial information and may not provide information about the amount spent by labour organizations on particular activities important to their members, such as salaries paid to the executives or details of their political activities.

The level of detail disclosed in financial statements is generally left to the discretion of the organization. While members not satisfied with the disclosure may be able to approach their labour relations board to require their union to provide additional more-detailed information, this may be a cumbersome and expensive process and may deter many workers from accessing the information.

I will also highlight that registered charities are required to provide information to the CRA that is subject to public disclosure. Registered charities are also given generous tax advantages by the tax system.

First, as are labour organizations, registered charities are exempted from paying income tax. Second, in recognition of the valuable services provided by charities, the Income Tax Act provides special incentives to encourage Canadians to donate. Registered charities are given the privilege of being able to issue official donation receipts for any gifts that they receive. Donors then use these receipts to reduce their taxes payable. To ensure that registered charities are accountable to Canadians for these tax privileges, all registered charities are required to file a registered charity information return, which is published on the CRA's website. This information enables the CRA to ensure that registered charities are operating in compliance with the rules and that they devote their resources exclusively to charitable activities. Transparency around this information also enables donors to verify their donations are being used appropriately and to determine which organizations they want to support. Through enhanced disclosure, Canadians can give with confidence, knowing that donations of their hard-earned dollars are used to support legitimate charities.

The registered charity information return contains information similar to that which has been proposed by the hon. member for South Surrey—White Rock—Cloverdale. In addition to filing financial statements, which are available to the public, registered charities must file detailed information as to how they carry on their activities each year. While I am not proposing to provide an exhaustive list of these requirements, I will take a minute to highlight a few.

All registered charities are required to provide information regarding the charitable programs they carried on throughout the year, including details on any new programs. Charities must also provide detailed financial information regarding their financial activities during the year. The information generally includes: the charity's assets and liabilities; the charity's sources of revenues, including the total amount for which it issued donation receipts; income earned from business activities and the amount of government grants received; and the charity's expenditures, including the aggregate amount spent on charitable activities, administration, fundraising and political activities.

Further, to ensure that charitable resources remain within the charitable sector, when a charity makes a gift of its funds to other charities or other qualified donors it must attach a detailed statement that lists the organization to which it gifted the funds as well as the amount given. Charities are also required to provide specific details around other issues of importance to Canadians, such as the amounts they devote to foreign charitable activities, the salary levels paid to their highest-compensated employees as well as the amounts they pay to professional fundraising companies. The transparency regime for registered charities is an important tool in helping to ensure that Canadians can give with confidence to registered charities and that those charities are accountable for the tax privileges granted to them under the Income Tax Act.

In summary, I believe the proposals contained in the bill are consistent with those principles of transparency and accountability. These organizations are provided generous tax benefits in the form of exemption from income tax and the deductibility of dues paid by members. These organizations should be accountable to the public as well as to their members as to how they carry out their activities and how they are spending their resources. I therefore encourage all members to support the principles of the bill.

David Anderson

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