Finance Committee on Nov. 29th, 2010

[Albina Guarnieri, Liberal, Mississauga East—Cooksville, ON]

No, I also want the names of the people making those high salaries to be revealed.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Oh, yes?

[Albina Guarnieri, Liberal, Mississauga East—Cooksville, ON]

As you said, it makes sense for the names of the top earners to be revealed.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

I don't see that in the—

[Albina Guarnieri, Liberal, Mississauga East—Cooksville, ON]

I will check to make sure.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

I am reading the following words: “Those with the highest compensation, provided that it exceeds $100,000 annually.”—$100,000 and higher.

[Albina Guarnieri, Liberal, Mississauga East—Cooksville, ON]

I will check with the drafter to make sure that the wording reflects what I want.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

So you do want to name the people who make over $100,000.

[Albina Guarnieri, Liberal, Mississauga East—Cooksville, ON]

Yes, absolutely. Thank you for the clarification. I will also clarify this with the drafter.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

That's fine, thank you.

[The Chair, Conservative, James Rajotte]

We'll now go to Mr. Wallace.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair.

I want to thank our guest and the mover of the motion this afternoon.

I'm going to share some of my time with Mr. Chong.

I really only have one question and I need to be upfront about things. The parliamentary secretary was pushing to be here today, but he's not in this province actually. I know you've been working with him, and we appreciate your willingness to look at some changes, and you have provided some changes here today in terms of amendments you are recommending to this committee, which we really appreciate, as you're focusing in on the accountability aspects.

I was a fundraiser myself for the Easter Seals Society way back when. Now they call them development officers, and my wife is one for Easter Seals. I wish she could make $100,000 and put her name there. She works hard at it. She's only part-time, but she works very hard for Easter Seals, as do many individuals across the country working for charities.

On some of your reports here, I think if you asked folks on the street, is a hospital a charity, is a university a charity, that may not come to mind. We think of Easter Seals groups, Heart and Stroke, and those types of organizations as charities. It's a bit of a different perspective on what you would consider a charity.

Based on your discussion with the parliamentary secretary, what are you hoping this government does with your bill and with the issue in general going forward?

[Albina Guarnieri, Liberal, Mississauga East—Cooksville, ON]

You know, the charities sector has launched a nationwide campaign against my bill. That is why I took pains to highlight good charities in my opening comments. There are a lot of people like you who actually are involved in charities for the right cause.

My bill is really a baby step toward a restructuring of the charities sector. Right now donations are shifting from frugal charities to those that spend wildly on fundraising. By shining a light on those costs, I'm hoping that donors might make an informed decision to back frugal and responsible charities.

If we look at some hard facts, if disclosure doesn't limit the fundraising profits that are taken away from real charity, then I think the government should explore the possibility of looking at reducing tax receipts. I mean, we give tax receipts for $100 to a donor where nowhere near $100 makes it to the cause.

I guess you can debate what a reasonable fundraising cost is per dollar. I would suggest that 25% should be the maximum and after that the receipt should be reduced, maybe dollar for dollar. That way taxpayers are getting value for their share. I suspect donors would shift their money to where it's doing the most good, not where their money is being siphoned off by fundraising companies or overpaid executives.

[Mike Wallace, Conservative, Burlington, ON]

I'll share my time with Mr. Chong.

[The Chair, Conservative, James Rajotte]

You have three minutes.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Thank you, Mr. Chair. Thank you, Madam Guarnieri.

I just have a comment and then a proposal that I would put to the committee when it goes to clause-by-clause.

First of all, I support the intent of this bill. I support your proposed amendments. I think it would shed much-needed transparency and light on the compensation issue regarding many charities in Canada.

My concern is with related corporations. In recent years, these for-profit share capital corporations have emerged that are very tightly and closely related to federally registered charities. These are for-profit enterprises that are not subject to any public reporting requirements, as they're often CCPCs, Canadian-controlled private corporations.

What they are doing is using the goodwill, the good name, of federally registered charities in order to promote their for-profit enterprises. Their give-back to the charity is that they somehow apportion a portion of their profits—give a portion, a percentage of their profits—back to this charity. It's not clear how much of those profits they're giving back in terms of their overall revenue base and what the compensation is of the senior executives who work for these for-profit corporations.

So I would propose to you that Bill C-470, in clause 1, be amended, by adding after line 18, the following: the name, job title, and annual compensation of the five executives or employees with the highest compensation, provided it exceeds $100,000 annually, of any corporations related to the registered or previously registered charity. What that would do is shed transparency on very closely related share capital corporations whose executives might be profiting from the goodwill of a close association with a federally registered charity.

[The Chair, Conservative, James Rajotte]

Madam Guarnieri, you have one minute.

[Albina Guarnieri, Liberal, Mississauga East—Cooksville, ON]

I would certainly view that as a friendly amendment. I think we need to follow the money through the charities sector to make sure that no one is making suckers of generous donors. I hope the government certainly pursues transparency as far as my bill is concerned, and I'm certainly in the hands of this capable committee.

[The Chair, Conservative, James Rajotte]

Monsieur Mulcair.

[Thomas Mulcair, NDP, Outremont, QC]

Thank you, Mr. Chairman.

Since we are talking about the importance of our institutions, I would like to thank my colleague, who belongs to another political party. She had the insight to see that there was a problem in an area she knows, obviously, extremely well, and she put forth a series of proposals.

I completely support the draft amendments presented today by Ms. Guarnieri. I think this is going to address some serious concerns.

I would like to summarize the situation. A university is engaged in a fundraiser of $700 million. The university could very well be paying someone over $250,000, which is the limit proposed here. However, a donor to this university will receive the only information that matters. If someone wants to make a donation to a certain university and sees that the five top earners make over $700,000, $800,000 or $900,000 per year, this person may find those amounts to be completely outrageous. Therefore, the donor would have access to the information he or she needs to make an informed decision. As for everyone else, it is not up to us to decide what is a reasonable salary.

I find this is an extremely good thing.

As Mr. Chong did previously, I will ask whether we could amend or improve this bill. I will ask our caucus to support your bill with the amendment you have just proposed.

My question is on the amendment to the very last part, which adds a few words on the compensation of the five managers or employees. Does the definition of employee include people who might have been hired as contract workers?

[Albina Guarnieri, Liberal, Mississauga East—Cooksville, ON]

You pose a very good question. The last thing any of us would want when we pursue transparency is a shell game, and I think that's where your question is leading.

[Thomas Mulcair, NDP, Outremont, QC]

Would it be possible to change the wording to “executives, employees or contract workers”? If so, that is my suggestion to you.

In my view, if something were to occur that would be of interest to potential donors... Ultimately, this bill is intended to provide people who are about to make a cash donation with the most information possible.

If a charitable organization with at most $3 million in donations a year paid its employees a reasonable salary but compensated a lawyer, whose services could not be evaluated, to the tune of $600,000 a year, then it would appear that such information should be of interest to people who want to make a donation. That should be just as material as the fact that the fundraising director could be earning $100,000 a year, for example.

That information will be made available to the public, but people will never know, for reasons that are sometimes unclear, if the organization's lawyer is receiving $600,000 or if a direct mail advertiser has been awarded an $800,000 contract. There might be a way to...

I am wondering whether such information would be made public through other sources? At this in time, can people find out whether 25% of a charitable organization's revenues are used to pay for legal or direct mail services?

[Albina Guarnieri, Liberal, Mississauga East—Cooksville, ON]

I see that the members of this committee want to increase transparency. I will always be in favour of raising the level of transparency.

The fact of the matter is that information on charities is much like wandering through a maze. We shouldn't have to go to the United States to get information about Canadian charities.

For instance, I have here the SickKids Foundation tax information from 2008. What is interesting about this return is that at the time that SickKids Foundation had an issue with an exorbitant salary of $2.7 million for their CEO, if you look at third-party fundraisers here, in three out of the four cases more was given to the fundraiser than to the hospital. In one case, one of these fundraisers gave themselves 75% of what they took in.

So when you look at this, the case you make is very compelling. There could be another amendment forthcoming that would strengthen my bill even further.

In all fairness, when this individual left the company in 2009, their performance improved, and only one fundraising company at SickKids Foundation made more than what was given to the hospital. So kudos to the SickKids Foundation for trying to fix their problem.

[Thomas Mulcair, NDP, Outremont, QC]

That is all I would have to say, Mr. Chair.

I again would like to congratulate our colleague on her remarkable work.

[Albina Guarnieri, Liberal, Mississauga East—Cooksville, ON]

Thank you, sir.