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Labour Unions - To Become Subject to New CRA Information Reporting Obligations? - by Ashid Dharsi 

Canadian Tax Adviser

 

January 08, 2013

 

Ashid Dharsi
GVA, Enterprise Tax

 

Labour organizations are now one step closer to being required to file annual information returns to report details of their expenditures and activities with the CRA as a result of the House of Commons' passage of a private member's bill, Bill C-377, on December 12, 2012. Bill C-377 now moves to the Senate, but it is unclear how quickly it will proceed and when (if at all) it will be passed into law.

Bill C-377 is controversial and, according to media reports, labour unions are lobbying against the bill and raising constitutional challenges.

 

Types of information to be reported
The 10-page bill amends the Income Tax Act to add new section 149.01 to require every labour organization and labour trust to annually file a prescribed form containing prescribed targeted information including, among other things:

 

  • A set of financial statements (balance sheet and statement of income and expenditures)
  • A set of statements for the year setting out the aggregate amount of transactions and disbursements the cumulative value of which is greater than $5,000 for a particular payee
  • A statement of loans exceeding $250 receivable from officers, employees, members or businesses
  • A statement of disbursements to officers, directors and trustees and to employees with compensation over $100,000 as well as other persons of authority (key officials) reasonably expected to have access to material information about the labour organization's business operations
  • A statement showing a reasonable estimate of the percentage of time dedicated by key officials to political activities, lobbying activities and other non-labour relations activities
  • Statements showing the aggregate amounts of disbursements on labour relations activities, political activities, lobbying activities, collective bargaining activities and legal activities, among other things
  • A statement for the fiscal period listing all other transactions with non-arm's-length parties
  • Detailed statements of income and expenditures of labour organizations operating in Canada that have their headquarters situated outside Canada.

 

What happens next?
As this is a private member's bill (sponsored by British Columbia Conservative MP Russ Hiebert) it is not known what priority the Senate and the government will give it or how quickly it may proceed through the Senate. Under the coming-into-force provisions, Bill C-377 will apply to fiscal periods of labour organizations that begin six months after the day on which Bill C-377 receives Royal Assent.

 

For more information, contact your KPMG adviser.

 

 

 

 

 

Information is current to January 08, 2013. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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