Appearances before Parliamentary Committees

Appearance before the House of Commons Standing Committee on Finance on Bill C-377, An Act to Amend the Income Tax Act (requirements for labour organizations)

November 7, 2012
Ottawa, Ontario

Opening Statement by Jennifer Stoddart
Privacy Commissioner of Canada

(Check against delivery)


Introduction

Mister Chair and Honourable Members, thank you for inviting me to speak with you regarding Bill C-377.

Transparency and accountability are essential features of good governance and critical elements of an effective and robust democracy.

However, as the Privacy Commissioner of Canada, it is my mission to protect and promote the privacy rights of individuals. And the extent of public disclosure of personal information contemplated in Bill C-377 raises serious privacy concerns.

I understand that the Honourable Russ Hiebert, the sponsor of the Bill, has already proposed amendments that would mitigate some privacy intrusive provisions. Excluding recipients of pension and health care benefits, and the removal of home addresses from public disclosure requirements, are steps in the right direction. While I support these amendments, I respectfully submit that there remain privacy concerns with the Bill.

Privacy Analysis Framework

Our Office has a longstanding practice of examining the privacy risks posed by a particular initiative by applying a privacy analysis framework, and its elements can be summarized by four key questions:

  • One, is the measure demonstrably necessary to meet a specific need?
  • Two, is it likely to be effective in meeting that need?
  • Three, is the loss of privacy proportional to the need?
  • And four, is there a less privacy-invasive way of achieving the same end?

The Need for Public Disclosure

As I understand it, the need purportedly being met by Bill C-377 is greater accountability and transparency of unions.  With respect to the first two questions then, it should be noted that labour organizations, whether in the public or private sector, receive funding largely through membership dues. Bill C-377 aims to increase transparency and accountability of unions vis-à-vis their members by requiring detailed disclosure of salaries and other individualized expenses through online posting. However, the Bill goes much further than that by requiring such disclosures also be made to the public at large, which in my respectful opinion, oversteps what is needed to achieve its stated objective.

The Proportionality of the Disclosure

With respect to the third question about proportionality, I should begin by stating that an individual’s remuneration constitutes personal information that cannot be disclosed without the individual’s consent. Exceptionally, there are instances in Canada where specific salaries are publicly disclosed when funded directly by the public, such as for example salaries of elected officials and of some high-ranking federal and provincial public servants. However, these exceptional cases of public disclosure do not create a clear precedent for labour organizations given that their accountability is to their members, not the general public.

It has been said that because labour organizations are tax exempt under the Income Tax Act, and because membership dues are tax deductible, labour organizations should be subject to a higher degree of public accountability.

However, it is not clear that the names, salaries and disbursements above $5,000 in respect of all labour organization employees and contractors need to be publicly disclosed to achieve this more limited objective. Indeed, the significant privacy intrusion of affected individuals that would result from public disclosure of their specific salaries and expenses seems highly disproportionate. 

Possible Alternatives

As for the fourth point about less privacy-intrusive alternatives, I believe that limiting the scope of the Bill such that public disclosure requirements apply to a much smaller subset of individuals, or requiring only aggregate level reporting, would result in a more balanced, yet equally effective outcome.

For instance, registered charities in Canada are required to publicly disclose only high-level salary information for their ten highest-compensated positions in annual information returns.  But even then, only the numbers of positions within specified salary ranges are disclosed, without identifying the individuals occupying these positions. A similar type of qualified public reporting requirement could potentially be applied to labour organizations.

At the international level, countries such as the United Kingdom and Australia have taken a similarly limited approach to union transparency when it comes to personal information, publicly disclosing the salaries of only a select few top union officials. These countries would seem to provide a more privacy-protective template from which to work.

Conclusion

I hope that my comments will help you to ensure the Bill strikes the right balance between transparency and accountability on the one hand and the privacy rights of individuals on the other.

I am happy to answer any questions.