It’s not just unions any more: Time to consider fiscal openness for professional associations, private companies, think tanks, churches

The board of the Fraser Institute meets to discuss their next dubious call for lower taxes on billionaires and the corporations they own. Who finances them, anyway? Secretive organizations may not appear exactly as illustrated.

It’s not just unions any more.

The more I think about this, the more the idea makes sense: the time has come to shine a bright light on the fiscal operations of all organizations to which Canadian citizens must pay dues in order to work, as well as on all those that benefit from taxpayer-paid subsidies, enjoy charitable status or attempt to influence public policy.

We can do this by passing laws in Parliament and in our provincial legislatures requiring minimum public financial reporting standards for several categories of organization that do business with public funds, represent members who must join in order to be able to work or otherwise take advantage of public funding.

The financial reporting requirements faced by corporations whose shares trade publicly on the stock markets should be the model for the degree of fiscal transparency required.

Entities subjected to these reporting requirements should include:

  • Organizations like the bar, medical, engineering and other professional associations that members must join in order to practice in their fields
  • Private corporations that receive any form of subsidy paid by taxpayers
  • Private corporations that bid on any publicly financed contract
  • Any corporation or organization that exists for the purpose of influencing public policy, including lobbying firms and “think tanks” not associated with public institutions, which have their own reporting requirements
  • Associations of corporations, businesses or individuals that by definition try to influence public policy and trade practices
  • Churches and religious organizations that raise funds for other than purely spiritual matters, including the operation of charitable, educational or public policy institutions
  • Any organization that can give charitable tax receipts for donations
  • Unions

And if this idea started with right-wing groups – including several of the groups on this list – as a way to poke a stick in the eye of trade unions, which are about the only group left other than the few remaining Occupy campers willing to stand up to the modern state’s corporatist agenda, well, so be it!

One of the points raised by advocates of applying this kind of fiscal transparency to unions is that they receive “hundreds of millions of dollars of benefits” from the government of Canada and the provinces.

This is certainly less true of unions than every other group on the list above – including churches, which enjoy tax-free status on the basis they are engaged solely in spiritual matters. Nevertheless, in many cases they actively lobby their members to vote in a particular way and to take specific stands on many public policy issues.

Public reporting of private corporations’ books would bring a welcome end to the excuse used by democratically elected governments in Canada and elsewhere to avoid providing the details of P3s and other publicly financed contracts with private corporations on the grounds they would expose private business dealings.

This argument would be moot if private corporations hoping to benefit from public largess were required to report their revenues, earnings and activities anyway – to the enormous benefit of taxpayers in the area of deciding how best to finance public projects and activities.

The rule should be a simple one: If you want public money, you must open your books.

Moreover, the benefits are again clear in the case of groups established with the sole purpose of influencing public policy – such as think tanks and lobbying firms. Surely the public is entitled to a reasonable degree of fiscal transparency from such groups. If nothing else, we would finally get to see who finances these often-secretive organizations, which would assist us in assigning appropriate value to their arguments in the free marketplace of ideas.

It makes even more sense when you consider that many of these groups, like the propagandistic Fraser Institute for example, are legally entitled to “charitable status” so that wealthy donors can enjoy a further break on their taxes for supporting an organization dedicated to the principle rich people shouldn’t have to pay taxes!

As I have said in this space before, while not required by law to do so, many unions already publish their complete audited financial results and distribute them to 100 per cent of their membership, either by mail or over the Internet. I worked for such an organization for more than a decade, and other than the cost of paying for an independent audit, nothing but benefits flowed from that practice.

Regardless, this is an idea that is now on the public agenda, and it’s time that progressive members of society start talking about the need for fiscal transparency among all these entities.

This post also appears on Rabble.ca.

11 Comments on "It’s not just unions any more: Time to consider fiscal openness for professional associations, private companies, think tanks, churches"

  1. jerrymacgp says:

    You should be aware that many professional organizations, such as the regulatory colleges of those professions regulated under the terms of Alberta's Health Professions Act, are required to have such fiscal transparency under the provincial legislation that establishes them.

  2. Andy says:

    Organizations like the bar, medical, engineering and other professional associations that members must join in order to practice in their fields

    Many of these already must report

    Private corporations that receive any form of subsidy paid by taxpayers

    Great point. Why should ANY entity that gets public money not be transparent about the use of those funds. Arts groups, social policy groups, business policy groups, individual business; all are using OUR money and we should know how it is being used.

    Private corporations that bid on any publicly financed contract

    Disagree. The disclosure is that they have won a contract, and to ensure that they deliver what was promised. We have an Auditor General who does a great job at exposing those that don't perform.

    There is no need to know about the rest of their financial position, as they are earning a fee for service.

    Any corporation or organization that exists for the purpose of influencing public policy, including lobbying firms and “think tanks” not associated with public institutions, which have their own reporting requirements

    Why? Are they obtaining public funds? Are they directly impacting government revenue by issuing tax deductible receipts? They are not.

    Associations of corporations, businesses or individuals that by definition try to influence public policy and trade practices

    Same comment as above.

    Churches and religious organizations that raise funds for other than purely spiritual matters, including the operation of charitable, educational or public policy institutions
    Any organization that can give charitable tax receipts for donations

    Any church that issues receipts is a registered charity, and therefore already must disclose. Charities that do not follow all charitable rules lose their ability to issue such receipts.

    Unions

    Agreed, as they issue tax deductible receipts.

  3. Sam Gunsch says:

    Your proposal would be an important step toward exposing the methods by which representative democracy has and is steadily being hollowed out by corporatism.

    In Alberta, as described in Mark Lisac's book The Klein Revolution, governance has become in practice, a 'joint-venture' between the Tories and the various corporate sectors with a vested interest in the public policy, legislation, or regulations at issue.

    Your proposal would expose the extent to which the public is subidizing the loss of citizen-based democratic control over society to the vested group interests, which in Alberta is exemplified by groups such as CAPP.

    I've noticed in the USA a nongovernment foundation, the Sunlight Foundation, is attempting to make transparent the extent to which the corporate sectors control politics.
    Here is an example of their findings:

    "According to a new Sunlight analysis, the more tax bills companies lobby on, the lower their effective tax rate. As the graph below shows, the companies that lobby on the most tax bills generally pay the lowest tax rates. "

    http://sunlightfoundation.com/blog/

  4. Anonymous says:

    Dave, excellent piece! The days of transparency must come to all that drink at the public trough. Resource based corporations feel they arw above unions some how, but they are the biggest pork barrel institutions that function by hoarding public energy incentives from programs, free unfettered resource development via lowest royalties, low corporate taxes and lax regulations and hand over fist cash returns for shareholders and execs. If that is not pork barrel welfare, i don't know what is, its just socialism in reverse and they are ok with corporate socialism and welfare. Pork barrel conservative welfare bums in suits should pay the same taxes and be subject to the same fiscal scrutiny as joe taxpayer. I hope the unions for their own sake and for the sake of balancing power, feel empowered enough to engage in political activism that will strengthen the opposition with the most seats of the time. Its the right thing thing to do and the most direct way to bring reciprocal fiscality.

  5. Alex P says:

    If this demand for union transparency is an attempt to create the public perception that unions have something unsavory to hide, the only answer is "I'll show you mine if you show me yours." Then start by publishing union financials and make like you're waiting with baited breath for the Fraser Institute to follow. Tap tap tap your fingers impatiently.

  6. Sam Gunsch says:

    re: news today related to David's concerns about transparency

    See today's EJ article (below): wherein billions of public money at risk, but our provincial government refuses to disclose the deal because of 'proprietary reasons.'

    AB gov't implied policy: citizens have no right to the 'intricate details.'

    Front page story: "Cabinet mulls risk of upgrader support"

    p.5 excerpts: "Bart Johnson, a spokesman for Alberta Energy, said if the North West upgrader should get built and then fail – and halt the processing of bitumen – the Alberta government would have to cover costs of debt taken on to build the upgrader."

    "If the facility would stop operating, we would still have to pay the debt portion of the fees," said Johnson, who would not disclose intricate details of a debt-financing plan the province signed with North West Upgrading and CNRL for proprietary reasons."

    http://www.edmontonjournal.com/business/Cabinet+mulls+risk+upgrader+support/5759198/story.html

    So the message is: we citizens are expected just to have faith that Tories and the un-elected elites in corporations have cut a fair deal for the public interest. Corporatism drives out citizen-based democracy.

    The Tories operate on the principle now that some percentage of Albertans vote them in, and then we all cede to the Tories and corporate leaders our right to participate in governance of our province, spending of public monies. Vote once. And then go home and leave it to the experts.

    Same process: Bill 50 authorizing Cabinet to dictate spending by Albertans for 100% of the cost of $16 B powerlines owned and operated by coal and powerline industry, with no independent needs assessment.

  7. Anonymous says:

    Clearly, someone has pissed in your PAF.

  8. Anonymous says:

    Dave, the rightfully clear thing you bring up here, is if they want to pick on unions, everybody else should be fair game too, including think tanks (or more rightfully, propaganda tanks). Especially public policy meddling propaganda tanks, should disclose all donations and sources of revenue. They often have a very undue influence on our politicians and therefore the lives of citizens. Another huge win for transparency would be flushing out the lobbyists. ALL Lobbyists of ANY amount should be registered and any amount they donate. Any sources of influence on the public needs to be shown for transparency.

  9. Sixth Estate says:

    Excellent piece. Sam — I don't know how the Sunlight Foundation runs their database, but we really need something like that in Canada.

    Andy suggests that think tanks and lobbyists, etc., should only be required to disclose their funding sources if they receive public money. To an extent this is a moot point, since almost all of them do and it can't really be a legal point (as opposed to one of principle) outside of the charitable sector. But I still disagree. For a supposed researcher, disclosing sources of funding that are related to the policy position you are advocating is a responsible way of informing your readership that you are in a potential conflict of interest.

  10. RougePierre says:

    In principle, I certainly agree, Dave. I'm not going to get bogged down discussing whether or not some organisations have transparency. The point of the article is, as I read it, if one sups at the public trough, one must then allow the public to examine one's x-rays. It matters not the form of payment; one public dollar equals full disclosure.
    Why is this concept so frightening to some?

  11. Sam Gunsch says:

    Morton(GoA) and Edwards(GoA-corporate division) clear things up for Albertans; or Alberta-style transparency around loan gauruntees for billion dollar partnerships formed by Gov't AB with Gov't AB corporate sectors. See news excerpts below.

    "…the government of Alberta has taken on a significant commitment to basically guarantee the bond payments to bond holders." Nov 24, 2011, a joint-venture government spokesperson,Ted Morton.

    http://www.calgaryherald.com/What+Morton+said+upgrading/5759911/story.html#ixzz1ep9OCy5Z

    “So there is a shared risk, it’s not a guarantee, it’s a tolling arrangement ….” Nov 25, 2011, a GoA joint-venture corporate spokesperson, Murray Edwards.

    http://blogs.calgaryherald.com/2011/11/25/no-loan-guarantee-in-upgrader-canadian-natural-insists

    The citizenry is so glad this got cleared up.

    Sam Gunsch

Comment