On June 30, 2015, Bill C-377, An Act to Amend the Income Tax Act, received royal assent. The purpose of the amendments is to increase transparency in union finances.
The bill amends the Income Tax Act to require unions to publicly disclose a wide range of previously private financial information. In particular, the amendments will require unions to publicly disclose:
- financial statements including a balance sheet and income statement;
- details on payments made to third party groups or individuals of $5,000 and up; and
- salary information for individuals earning $100,000 and up.
Information disclosed under the amended legislation will be made available on a public website. The new rules will apply to fiscal periods beginning January 1, 2016. Penalties for non-compliance include fines up to $25,000.
Critics of the bill have been vocal about compliance costs, its potential impact on privacy rights and have questioned its constitutionality. Many observers expect the bill to be challenged in court. Further, with a federal election looming, it is somewhat unclear at this time whether the bill will remain in effect.
Questions relating to the content of this article should be directed to Chris Leenheer.