On June 30, 2015, a law requiring unions to publicly disclose a wide range of their financial dealings passed the Senate and received royal assent. Bill C-377 amends the Income Tax Act, and requires unions to file an annual "information return" with the Minister of Finance, containing a broad range of previously private financial information, which notably includes:
- Financial Statements, containing a balance sheet and income statement;
- Statements showing the aggregate amount of all transactions for the financial period, including a separate line item for any payee who received an aggregate amount of $5,000 or more over the period. The statements must also provide a description of the reasons for every transaction exceeding $5,000; and,
- A statement setting out each salary paid by the union in excess of $100,000 per year, as well as the aggregate amount of all other salaries paid by the union. Unions must disclose the amount of time each individually reported salary recipient spends lobbying or performing non-labour relations activities, as well as the aggregate time spent on those activities by individuals whose salary is less than $100,000 per year.
The complete list of financial information that must be disclosed is a long and comprehensive one. The bill requires the Minister to publish each union's information return online. As a result, the public will have access to the required union financial statements. The disclosure requirements apply to unions of all sizes across the country, including both private and public sector unions. Unions that fail to comply with the reporting requirements face fines of up to $25,000.
Bill C-377 is a major change to the financial reporting regime applicable to unions. Prior to Bill C-377 unions were subject to minimal reporting requirements.
Bill C-377 will apply to fiscal periods that begin January 1, 2016.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.