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B.C. Conservative MP Russ Hiebert is the sponsor of Bill C-377, legislation that has broad policy implications for Canada's labour unions.ADRIAN WYLD/The Canadian Press

A Conservative bill that would force unions to open their books to the public is running into resistance from an unlikely source: Conservative senators.

Senate sources say between 15 and 25 Conservative senators are leaning toward supporting amendments to the bill, a move that would have the effect of preventing it from becoming law before the summer recess.

As debate on the bill plays out inside the Conservative caucus, internal documents indicate the government expects between 10 and 30 per cent of unions will be in violation of the new law, which could lead to them paying millions of dollars in fines. Documents also reveal public servants at Finance Canada were busy studying all aspects of union disclosure law in the month before the bill was introduced by a backbench Tory MP.

B.C. MP Russ Hiebert first introduced his bill, C-377, under a different name on Oct. 3, 2011. Yet officials at Finance Canada and Human Resources Development had been studying issues related to the bill before it was made public.

The behind-the-scenes activity by public servants is seen as evidence by critics that the government is supporting significant legal changes through the backdoor. Bills from backbench MPs do not face the same level of debate time and scrutiny that government bills receive.

"I don't think it would surprise anybody to know that the full force of the government was behind this initiative," said Liberal MP Rodger Cuzner, whose office obtained the finance documents under Access to Information. "It's outrageous."

Kathleen Perchaluk, a spokesperson for Mr. Flaherty, said it's "pretty common" for MPs to consult the finance minister about their ideas for private member's bills that have a finance component. "Despite what some suggest, this bill was Russ Hiebert's idea to improve transparency for individual union members and he had the Library of Parliament independently draft it," she said in an e-mail.

The Conservative-dominated Senate banking committee recently concluded hearings on Mr. Hiebert's bill and reported some concerns. The report points out that the vast majority of the 44 witnesses who appeared before the committee "raised serious concerns about this legislation."

The report said the main concern was whether the bill was a constitutional invasion into provincial responsibility for labour law. "Other issues raised include the protection of personal information, the cost and need for greater transparency, and the vagueness as to whom this legislation would apply. The committee shares these concerns." The report said the committee did not make amendments because it felt "these substantial issues are best debated by the Senate as a whole."

Conservative Senator Gerald Comeau confirmed that some of his Conservative colleagues are concerned, but he still thinks the Senate will approve the bill. "I've heard a few people express issues with it, but I think the numbers are there to pass it," he said.

Meanwhile, documents released by the Privy Council Office – which were first obtained by the news site Blacklock's Reporter – show the government estimates 30 per cent of unions will be in violation of the new law during the first two years, before dropping to 10 per cent in subsequent years as unions become more familiar with the rules.

The bill includes fines of $1,000 a day for non-compliance, up to a maximum penalty of $25,000. The Canada Revenue Agency could choose to issue warnings instead of fines in the beginning. There is also debate over how many entities would be required to report under the new law. The CRA has said it is less than 1,000, but the Canadian Labour Congress says it could be more than 25,000.

The Conservative government is eager to pass as many bills as possible before Parliament rises for the summer. Complicating the debate around C-377 is a Liberal amendment supported by Conservative Senator Hugh Segal that would see the salary disclosure level for unions under the bill increase from $100,000 to $444,000. It would also raise the disclosure threshold for union payments from $5,000 to $150,000.

There is a certain amount of mischief in the amendment. The compensation change is virtually the same as the one Conservative MPs made to MP Brent Rathgeber's bill that would have forced the disclosure of public servant salaries at levels above $188,000. The government amendments to raise the level to $444,000 – which is the highest possible compensation for deputy ministers, meaning nothing would be disclosed – led Mr. Rathgeber to quit the Conservative caucus this month in protest.

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