Bill C-377

2nd Session, 41st Parliament,

62 Elizabeth II, 2013

house of commons of canada

BILL C-377

An Act to amend the Income Tax Act (requirements for labour organizations)

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

INCOME TAX ACT

1. The Income Tax Act is amended by adding the following after section 149:

149.01 (1) The following definitions apply in section 149 and in this section.

“labour organization” includes a labour society and any organization formed for purposes which include the regulation of relations between employers and employees, and includes a duly organized group or federation, congress, labour council, joint council, conference, general committee or joint board of such organizations.

“labour relations activities” means activities associated with the preparation for, and participation in, the negotiation of collective bargaining agreements and the administration and enforcement of collective agreements to which the labour organization is a signatory.

“labour trust” means a trust or fund in which a labour organization has a legal, beneficial or financial interest or that is established or maintained in whole or in part for the benefit of a labour organization, its members or the persons it represents.

(2) Every labour organization and every labour trust shall, by way of electronic filing (as defined in subsection 150.1(1)) and within six months from the end of each fiscal period, file with the Minister an information return for the year, in prescribed form and containing prescribed information.

(3) The information return referred to in subsection (2) shall include:

(a) a set of financial statements for the fiscal period, in such form and containing such particulars and other information as may be prescribed relating to the financial position of the labour organization or labour trust, including

(i) a balance sheet showing the assets and liabilities of the labour organization or labour trust made up as of the last day of the fiscal period, and

(ii) a statement of income and expenditures of the labour organization or labour trust for the fiscal period;

(b) a set of statements for the fiscal period setting out the aggregate amount of all transactions and all disbursements —or book value in the case of investments and assets — with all transactions and all disbursements, the cumulative value of which in respect of a particular payer or payee for the period is greater than $5,000, shown as separate entries along with the name of the payer and payee and setting out for each of those transactions and disbursements its purpose and description and the specific amount that has been paid or received, or that is to be paid or received, and including

(i) a statement of accounts receivable,

(ii) a statement of loans exceeding $250 receivable from officers, employees, members or businesses,

(iii) a statement showing the sale of investments and fixed assets including a description, cost, book value, and sale price,

(iv) a statement showing the purchase of investments and fixed assets including a description, cost, book value, and price paid,

(v) a statement of accounts payable,

(vi) a statement of loans payable,

(vii) a statement of disbursements to officers, directors and trustees, to employees with compensation over $100,000 and to persons in positions of authority who would reasonably be expected to have, in the ordinary course, access to material information about the business, operations, assets or revenue of the labour organization or labour trust, including gross salary, stipends, periodic payments, benefits (including pension obligations), vehicles, bonuses, gifts, service credits, lump sum payments, other forms of remuneration and, without limiting the generality of the foregoing, any other consideration provided,

(vii.1) a statement with a reasonable estimate of the percentage of time dedicated by persons referred to in subparagraph (vii) to each of political activities, lobbying activities and other non-labour relations activities,

(viii) a statement with the aggregate amount of disbursements to employees and contractors including gross salary, stipends, periodic payments, benefits (including pension obligations), vehicles, bonuses, gifts, service credits, lump sum payments, other forms of remuneration and, without limiting the generality of the foregoing, any other consideration provided,

(viii.1) a statement with a reasonable estimate of the percentage of time dedicated by persons referred to in subparagraph (viii) to each of political activities, lobbying activities and other non-labour relations activities,

(ix) a statement with the aggregate amount of disbursements on labour relations activities,

(x) a statement of disbursements on polit­ical activities,

(xi) a statement of disbursements on lobbying activities,

(xii) a statement of contributions, gifts, and grants,

(xiii) a statement with the aggregate amount of disbursements on administration,

(xiv) a statement with the aggregate amount of disbursements on general overhead,

(xv) a statement with the aggregate amount of disbursements on organizing activities,

(xvi) a statement with the aggregate amount of disbursements on collective bargaining activities,

(xvii) a statement of disbursements on conference and convention activities,

(xviii) a statement of disbursements on education and training activities,

(xix) a statement with the aggregate amount of disbursements on legal activities, excluding information protected by solicitor-client privilege,

(xix.1) a statement of disbursements (other than disbursements included in a statement referred to in any of subparagraphs (iv), (vii), (viii) and (ix) to (xix)) on all activities other than those that are primarily carried on for members of the labour organization or labour trust, excluding information protected by solicitor-client privilege, and

(xx) any other prescribed statements;

(c) a statement for the fiscal period listing the sales of investments and fixed assets to, and the purchases of investments and fixed assets from, non-arm’s length parties, including for each property a description of the property and its cost, book value and sale price;

(d) a statement for the fiscal period listing all other transactions with non-arm’s length parties; and

(e) in the case of a labour organization or labour trust having its headquarters situated outside Canada, a statement in the prescribed form and containing such particulars as may be prescribed showing

(i) amounts paid or credited to the labour organization or labour trust in the fiscal period by, on behalf of or in respect of taxpayers resident in Canada, and

(ii) expenditures made by the labour organization or labour trust in the fiscal period inside or outside Canada and recorded separately in the accounts of the labour organization or labour trust as being directly related to its operations in Canada.

(4) Despite section 241, the information contained in the information return referred to in subsection 149.01(2) shall be made available to the public by the Minister, including publication on the departmental Internet site in a searchable format.

(5) For greater certainty, a disbursement referred to in any of subparagraphs (3)(b)(viii) to (xx) includes a disbursement made through a third party or contractor.

(6) Subsection (2) does not apply to

(a) a labour-sponsored venture capital corporation; and

(b) a labour trust the activities and operations of which are limited exclusively to the administration, management or investments of a deferred profit sharing plan, an employee life and health trust, a group sickness or accident insurance plan, a group term life insurance policy, a private health services plan, a registered pension plan or a supplementary unemployment benefit plan.

(7) Subsection (3) does not require the reporting of

(a) information, regarding disbursements and transactions of, or the value of investments held by, a labour trust (other than a trust described in paragraph (6)(b)), that is limited exclusively to the direct expenditures or transactions by the labour trust in respect of a plan, trust or policy described in paragraph (6)(b);

(b) the address of a person in respect of whom paragraph (3)(b) applies; or

(c) the name of a payer or payee in respect of a statement referred to in any of subparagraphs (3)(b)(i), (v), (ix), (xiii) to (xvi) and (xix).

2. Section 239 of the Act is amended by adding the following after subsection (2.3):

(2.31) Every labour organization or labour trust that contravenes section 149.01 is guilty of an offence and liable on summary conviction to a fine of $1,000 for each day that it fails to comply with that section, to a maximum of $25,000.

COMING INTO FORCE

3. This Act applies in respect of fiscal periods that begin after the day that is six months after the day on which this Act is assented to.