Investment Firms Alarmed About Bill C-377

OTTAWA, ONTARIO--(Marketwired - June 7, 2013) - Canadian investment and insurance firms are expressing alarm over the consequences that will flow from Bill C-377, legislation of the Conservative government that is aimed mainly at labour unions.

Officials from the Canadian Life and Health Insurance Association Inc. and the Investment Funds Institute of Canada appeared yesterday before the Senate banking committee, which is holding hearings on Bill C-377. The proposed bill would force every labour organization in Canada to file detailed financial information about individuals and also companies doing business with unions, to be posted publicly on a Canada Revenue Agency (CRA) website.

Ralf Hensel is general counsel and director of policy for The Investment Funds Institute of Canada, which represents companies with $910 billion in assets under management and as many as 12 million Canadian clients. He warned of the negative consequences of such sweeping legislation.

The government's stated purpose in Bill C-377 is force unions to provide minute details about their finances, but Hensel said that definitions about who the bill applies to are cast very broadly.

"We believe on a fair and reasonable interpretation it captures any trust or fund offered to the public in which there is a single unit holder or beneficiary who is a member of a labour organization. That fund would then be subject to the bill's full disclosure requirements."

Hensel added, "At its essence, then, any mutual fund that has just one investor who is a member of a labour organization would be tainted and therefore subject to the bill."

Ron Sanderson is director of policyholder taxation and pensions for the Canadian Life and Health Insurance Association Inc., a voluntary group whose member companies account for over 99 per cent of Canada's life and health insurance business.

"Our principal concern with this bill is privacy," he told the Senators. "As drafted, the bill could make public the benefit payments we make to individual Canadians. We already report required information for tax purposes, but that information is confidential. We believe that this bill would be at odds with reasonable consumer expectations of privacy for their medical and financial affairs. Other evidence, including from the Canadian Bar Association, also raises this concern."

Ken Georgetti, President of the Canadian Labour Congress, also gave evidence before the Senate committee. He said that Bill C-377, while claiming to promote financial transparency, is actually meant to bully and harass unions and their members, and he called upon the Senate of Canada to defeat it.

"Despite what radical Conservatives would have you believe, this bill is nothing more than political retaliation," Georgetti said. "It does not address an existing problem. At its core, this bill is political bullying."

Georgetti told the Senators that the weight of evidence they have heard from constitutional, legal, labour relations, privacy, and now financial sector experts, all warning of the consequences of allowing such an ill-conceived and badly crafted piece of legislation to pass into law should convince them to toss C-377 into the trash can.

The Canadian Labour Congress, the national voice of the labour movement, represents 3.3 million Canadian workers. The CLC brings together Canada's national and international unions along with the provincial and territorial federations of labour and 130 district labour councils. Web site: www.canadianlabour.ca Follow us on Twitter @CanadianLabour