Bill C-377: An Act to amend the Income Tax Act - requirements for labour organizations

Bill C-377: An Act to amend the Income Tax Act - requirements for labour organizations


19 January 2017 - On January 28, 2016, MaryAnn Mihychuk, Minister of Employment, Workplace Development and Labour, introduced Bill C-4 into the House of Commons. Its purpose is to repeal legislation passed by the previous Conservative government that was widely seen as an attack on the labour movement. The first of the Conservative bills was Bill C-377, and among other things, it created onerous reporting requirements of labour organizations and labour trusts under the Income Tax Act. The second one, Bill C-525 made the certification process more difficult by introducing a mandatory secret ballot vote for federal employees and simultaneously lowering the threshold for initiating a decertification process.

The Liberal government’s election platform had included restoring fair and balanced labour laws that recognize the important role of labour unions in society. They had no intention of allowing Bill C-377 to come into effect on December 31, 2015 as the Conservatives had planned. According to an announcement on December 21, 2015 by Diane Lebouthillier, Minister of National Revenue, the Liberals waived the reporting requirements for labour organizations throughout 2016 and announced their intention to repeal the legislation.

Bill C-4 is currently winding its way through the legislative process, having most recently been referred to the Committee on Legal and Constitutional Affairs on December 15, 2016, after having been through two readings in the Senate. There had been some concern when the process began that the Conservative controlled senate, which had only recently passed Bills C-377 and C-525, would block the passage of Bill C-4. Since then the make-up of the senate has changed, and that concern has abated.

While unable to prevent this repeal from occurring, some conservative commentators have remained critical of this otherwise welcomed action. Members of the Fraser Institute maintain that the changes made in Bill C-377 make unions more democratic and increases their financial accountability. They continue to caution against the presence of a silent majority of workers who require the veil of anonymity a secret ballot can provide to voice their reluctance to join a union. They also worry that union members are not fully aware of how their union dues are being spent.

These concerns contrast starkly with reality given that laws already exist that require unions to disclose financial information to their members. The Supreme Court has also previously interpreted the freedom of association in the labour context, as well as the freedom not to associate, where they addressed similar concerns about democratic values, the rights of the individual, and ideological coercion of members.

What Happened

Bill C-377, passed unamended by Conservative majorities in the House of Commons (2012) and in the Senate (2015), makes unprecedented changes to the Income Tax Act, which will come into effect 30 January 2016. For the first time, unions, labour organizations, labour federations, organizations comprised of different unions, labour trusts and professional associations are required to make public and itemize the details of all expenditures over $5000. Despite its potential to include a broad (and unknowable) swathe of targets, from the National Hockey League Players Association to Doctors Nova Scotia, the real Conservative intent is, as the president of the Canadian Labour Congress recognized, “to single out, interfere with and weaken unions across this country” (Yussuff).


Since it surfaced on 5 December 2011 at the hands of Russ Hiebert, a BC Conservative evangelical Christian MP with close ties to Stephen Harper (Gutstein, 98), the use of the Income Tax Act “as a Trojan Horse to regulate unions” and a wide range of other labour and professional groups (Professor Bruce Ryder, Osgood Hall School, quoted in “Union Bill Unlawful”), has generated widespread outrage and recognition of its attack on fundamental rights. On one side stand anti-labour champions such as the Fraser Institute, LabourWatch Canada, Real Women, the National Citizens Coalition and Merit Canada. In opposition stand unions, professional societies, many legal scholars, the Canadian Bar Association, democratic activists, Canada’s Privacy Commissioner, and at least seven provinces, since labour law is constitutionally largely beyond the jurisdiction of the federal government.

The course of parliamentary consideration of Bill C-377 has been effectively outlined by the Liberal Opposition leader in Senate, the Hon. James S. Cowan. As a private member’s bill, Bill C-377 “did not receive any constitutional vetting by the Minister of Justice or the constitutional experts in his department” and “received very little scrutiny” in the Commons. It nevertheless passed the Commons without amendment. When it first arrived in the Senate in December 2012 it received far closer examination, including public hearings by the Banking Trade and Commerce Committee. Major concerns over the bill’s constitutional legitimacy, the protection of privacy, the “cost and need for greater transparency, and the vagueness as to whom this legislation would apply” led to a bipartisan majority in June 2013 in favour of significant amendments. An amended Bill C-377 was next sent to House of Commons but the prime minister’s subsequent prorogation of Parliament meant the original bill, which was summed up by then-Conservative senator Hugh Segal as “badly drafted legislation, flawed, unconstitutional and technically incompetent,” returned once more to the Senate (Cowan).

Here its second consideration proved far more partisan as the Conservative majority largely closed ranks. The Canadian Union of Public Employees (CUPE), Canada’s largest union, was among many excluded from testifying; permitted witnesses, including the Privacy Commissioner, were limited to a few minutes (Cowan). When Liberal senators attempted a filibuster to prevent the bill’s passage, Bill C-377 was pushed through despite the fact that Senate rules allowed the limiting of debate only for government business, not for such private members’ bills (Bryden). The Conservative majority in the Senate accomplished this by overruling its own Speaker’s attempt to uphold traditional Senate rules. In contrast, other private bills, including one “aimed at stripping convicted parliamentarians of their pensions” died on the order paper in the same sitting (The Canadian Press).

In the period leading up to the federal election, required by law to take place in October 2015, Bill C-377 confirmed yet again the Conservative government’s abuse of legislative power and, ultimately, its hostility to working people.

History of a growing anti-union movement

Few Canadian governments have been supportive of unions or collective bargaining. At every level, they have a significant history of employing the military, the police and the law against unions and workers (Gutstein; Jamieson; Morton; Pariseau; Stevens and Nesbitt; Whitaker, Kealey, and Parnaby). Conflict has nevertheless ebbed and flowed since the 19th century. After World War Two, unions won essential protection in the Rand Formula, which required dues to be paid by all workers in unionized workplaces, thereby helping both to recruit members and to better life for all Canadians.

In return, unions agreed to a regime of ‘industrial legality,’ sometimes termed Fordism, which gave legal force to collective agreements, required extensive state intervention preceding any strike or lockout, and banned spontaneous collective action during the life of the contract.

Beginning in the 1970s and 1980s, however, corporations, in both their national and international operations, increasingly sought to maximize both profits and power through heightened surveillance of union activities and so-called ‘right-to-work’ laws, or as they have been better-termed, “take away our rights to bargain for better work” laws (Lewenza). With the appearance of Stephen Harper’s right-wing administrations, all elected with less than 40% of the popular vote after 2006, official Ottawa increasingly applauded anti-unionism similar to the way it flourished under the Reagan and subsequent Republican presidencies. Quite predictably, Bill C-377 is closely associated with noted anti-union champions such as LabourWatch and Merit Canada (Sanger).

Although Canada’s anti-union coalition of policy makers and advocacy groups has generally been more cautious than their US counterparts (as with their frequent rhetorical embrace of democracy), they are committed to a similar anti-worker agenda. The Conservative Party is their preferred political instrument. Once in power in Ottawa, this party has ended legal strikes, imposed contracts, arbitrarily changed provisions for sick leave, severance, and pensions, and opposed pay equity (see the 2009 Equitable Compensation Act in Kruth). As a wide range of critics have concluded, “No federal government has gone after unions as comprehensively as Harper’s, upsetting long-standing labour practices, intervening in contract negotiations, slashing the federal workforce, reducing union membership, and threatening right-to-work legislation” (Gutstein, 105).

Bill C-377 can only be understood in the context of a wider war on workers (see also Miller). Its “costly, and, indeed, unprecedented, accounting standards” constitutes a direct attack on Canada’s democratic unions (Stevens and Tucker). As then-national president of the Canadian Autoworkers Ken Lewenza bluntly put it: C-377 “is an arrow aimed right at the heart of the labour movement” (Lewenza).

Since labour law is largely the prerogative of provincial governments, Harper hopes to employ tax law to discipline dissenters from his brutal brand of purportedly 'free market’ capitalism. Bill C-377 effectively makes Revenue Canada assume oversight of the day-to-day business of unions. That unprecedented burden has been imposed even as that agency’s ability to check tax cheats among the very rich and global corporations has been brutally compromised by budget cuts (Curry). Under Stephen Harper, the representatives of workers face the federal microscope while the beneficiaries of state-subsidized capitalism slide under the radar.

A broad attack on democracy's advocates

A campaign of misinformation and slander has carefully prepared the ground for the Conservative assault on unions (Sallot). Like women, Indigenous people, those with disabilities, veterans, students, scholars and scientists, refugees and environmentalists, among others, organized labour has been repeatedly caricatured as a disaffected, purely self-interested minority, which damages the public good. The July 2015 call of the National Citizens Coalition, that familiar bedrock of Harper admirers, for an “End [to] forced Union dues: … Bill C-377 Support union transparency in Canada,” typifies the pervasive ideological double-speak. George Orwell would have recognized a strategy that presents business as the defender of the ‘common man’ and unions as the champion of little more than skullduggery.

Just in case Canadians don’t get the message, Conservative attacks on democracy’s advocates often lie buried in enormous omnibus bills, as the federal administration attempts to remake Canada by stealth (Nadeau). Furthermore, the employment of Revenue Canada against unions, as against progressive non-profits, reflects what has been identified as Stephen Harper’s “punitive turn in social policy-making” or his “predilection for exercising legal force rather than appealing to shared social values” (Prince, 62-3). In face of plentiful evidence that the majority of Canadians do not share Conservative prejudices, this approach is hardly surprising.

For all the calumnies directed at unions and their allies by Harper Conservatives, Canada preserves a strong core of pro-labour sentiment. A December 2013 Harris-Decima poll identified 56% of respondents as crediting organized labour with a “positive influence in society”; 70% regarded unions as “necessary”; and “two-thirds agreed that everyone in a workplace should pay union dues if they benefit from union activities” (Jeffrey, 197).

Nor has the double standard underlying Bill C-377’s requirement that unions disclose the minutiae, financial and otherwise, of their operations gone unnoticed. As one public service-union president exclaimed, “this is an astounding request coming from one of the most secretive and controlling governments in Canadian history,” (Jeffrey 195). Incongruities only mounted when the Senate itself stood condemned of recurring scandals about its members’ abuse of public funds and privilege.

The irony is all the greater since unions, whatever their blemishes, are among the Canadian institutions most likely to embody grassroots democracy. Members already expect and largely receive financial accountability; indeed provincial laws regularly demand a high level of public scrutiny. As a matter of course as well, candidates for elected union office, unlike Harper’s Conservatives, are readily transparent about agendas. Their platforms normally spell out with considerable clarity just how they propose to win better wages and conditions of employment and to champion human rights at home and abroad. In many respects, unions represent democracy in action at its most honest and untidiest, certainly in a state far less constrained than it has been in today’s federal parliament and Harper’s well-disciplined Conservative caucus.

Relevant Dates

  • 2000: Creation of LabourWatch, the pro-business anti-labour lobby group with close ties to the Conservative party;
  • 2006: The Fraser Institute calls for public disclosure of union financial information in its publication Union Disclosure in Canada and the United States;
  • 2008: Creation of Merit Canada (successor of the Canadian Coalition of Open Shop Construction Associations, founded 1999) as the ‘open shop’ lobbyist for provincial construction associations;
  • 2011: State of the Unions 2011 released by LabourWatch to broaden support for open shops;
  • October 2011: BC Conservative MP Russ Hiebert introduces Bill C-17, predecessor to C-377;
  • December 2011: Bill C-377 introduced;
  • December 2012: Bill C-377 passed by House of Commons;
  • June 2013: 22 Conservative Senators abstained or voted with Liberals to amend C-377, gutting its requirements to disclose salaries and spending and introducing an exemption from disclosure for information protected by solicitor-client privilege;
  • June 2013: Harper prorogues House of Commons, an action which revives the December 2012 version of C-377;
  • October 2013: Conservative convention in Calgary supports right to work legislation;
  • October 2013: Proposed Senate amendments rejected by Conservative majority in House of Commons, which returned unamended bill to Senate;
  • 30 June 2015: Senate passes unamended Bill C-377;
  • July 2015: National Citizens Coalition calls for an to “End forced Union dues. Special update: Bill C-377 Support union transparency in Canada.”

Role or Position

Bill C-377 stands within the anti-union tradition of many Canadian governments. More particularly, it forms part of a wide-reaching Conservative strategy, developed by doctrinaire conservative lobbyists and politicians in the 21st century, to delegitimize and diminish the democratic options of Canadians.

Unfolding as it has in the context of a wide-ranging Conservative assault on fundamental rights, this legislation has rallied opponents. Most obviously these are unions. Speaking on behalf its members1, Quebec’s Alliance sociale summed up the commonplace assessment:

“La réelle volonté de ce gouvernement est de paralyser l'activité syndicale et de laisser croire à la population que les organisations syndicales ont des activités louches, qu'elles sont antidémocratiques et qu'elles doivent être mises au pas” (Confédération des syndicats nationaux).

Hostility might be taken-for-granted from unionists but condemnation goes far beyond the usual dissenters from conservatism. Right from the start, the Canadian Bar Association and the Federation of Law Societies of Canada voiced pervasive concerns about the reach and constitutionality of C-377. In particular, it was seen as intruding in an area of provincial jurisdiction. Just as significantly, C-377’s interference with the internal operations of unions was identified as a threat to privacy, “solicitor-client privilege,” and freedom of association. Representatives of Canadian lawyers understood that disclosure of “disbursements for political activities, lobbying, organizing and collective bargaining—subjects which concern their membership but not the public at large” puts unions at a tremendous, and unfair, disadvantage in negotiations with employers (Schmitz).

In short, Bill C-377 has been summed up as so badly written that it catches in its net an unknown range of organizations and individuals, unconstitutional in its entry into provincial jurisdiction, an invasion of privacy, a threat to labour relations, and an attack on unions. Its passage confirms workers’ rights as a key battleground between Canada’s reactionary and progressive forces in 2015.


1 l'Alliance du personnel professionnel et technique de la santé et des services sociaux, la Centrale des syndicats démocratiques, la Confédération des syndicats nationaux, la Centrale des syndicats du Québec, la Fédération étudiante collégiale du Québec, la Fédération des travailleurs et travailleuses du Québec, le Syndicat de la fonction publique et parapublique du Québec, and le Syndicat de professionnelles et professionnels du gouvernement du Québec


Implications and Consequences

Free Speech and Freedom of Association

  • Bill C-377’s requirement that details of union operations designed to protect Canadian workers from the uncertainties and prejudices of the free market be publicized by Revenue Canada handicaps unions in their relations with employers and governments. It curbs unionists’ ability to speak freely, and thus undermines their effectiveness, and ability to recruit and to lobby.


  • The use of the Canada Revenue Agency to discipline unions camouflages partisan interference with the rights of Canadian workers to organize and negotiate a better deal.

Civil Society

  • Unionists have long been key champions of civil society as a fundamental guarantor of democracy and a source of inspiration and creativity for improved state policies. Civil society is undermined when unions are diminished.

Democracy and Equality

  • In the 21st century, Canada has become more unequal. In particular, ‘the one per cent’ is increasingly powerful. Unions have always been a major champion of greater democracy and equality—from the universal franchise (also under threat by this government in its so-called Fair Elections Act of 2014) to better wages and working conditions—and their diminishment can only be at the cost of the rights of the vast majority of Canadians.

  • Bill C-377 also raises concerns for democracy in its affront to the constitutional division of powers, which leaves labour matters largely with the provinces, and in the abuse of parliament signaled by the prime minister’s prorogation and the Senate majority’s disregard for the rules of the house in forcing through a private member’s bill.

Published: 24 July 2015

Updated: 19 January 2017