Finance Committee on Dec. 8th, 2010

[Mike Wallace, Conservative, Burlington, ON]

That's why I asked, because if it's not protected, then what's the use? Somebody can ATIP it and try to get the information. It would take longer—maybe too long, some people would say, but it does take longer.

Even with the input from staff, I'm still more satisfied with the additional wording that Mr. Pacetti has put forward. I'm happy to continue to support it. If this changes, if that additional wording does not stay, then I won't be supporting the change.

[The Chair, Conservative, James Rajotte]

Okay, thank you.

Monsieur Paillé is next.

[Daniel Paillé, Bloc, Hochelaga, QC]

Mr. Chairman, I graciously cede my turn to my colleague because I have nothing more to say.

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

I will support Mr. Pacetti's amendment but I believe that we need to maintain the requirement to release the relevant information, except as permitted by the amendment. In this way, the minister will have to justify any decision to not release. The bill will state clearly, rather than in vague terms, that normally he is required to release this information. I prefer to make it compulsory for him to do so, except in special circumstances that he will need to justify.

[The Chair, Conservative, James Rajotte]

I have Mr. Pacetti on the list.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you, Mr. Chair.

This is just a comment on what Mr. Short was saying. I understand that the information is private, but it no longer remains private once these charitable organizations benefit from public moneys. They benefit from public moneys, whether directly or indirectly, because the person who is contributing is getting a tax deduction or a tax credit and is therefore getting a reduction of his income taxes. I think there's a benefit there. I think he or she relinquishes his or her privacy when it comes to benefiting from government moneys.

The way I see the wording is more in reverse. If we say the minister “shall”, then he has the discretion to only publish a few, whereas when we put in the words "unless otherwise justified", then he has to publish all of them except those that don't need to be published.

It's going to be an obligation for him or her to just go ahead and make public all the information, instead of just doing so when he feels that he should. I understood what was said at the beginning and I feel that with this slight amendment we're justified in asking that the minister justify the occasions when he should not disclose.

Thank you, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Thank you.

Perhaps what I'll do is ask the clerk to read the amendment, if we can have it in English and French.

[Wayne Cole, Procedural Clerk]

It is that Bill C-470 in clause 1 be amended by replacing line 5 on page 2 with the following:

(b) the Minister shall, unless otherwise justified, make available to the

That Bill C-470, in Clause 1, be amended by replacing line 5 on page 2 with the following: (b) the minister shall, unless otherwise justified, make available to the

[The Chair, Conservative, James Rajotte]

I will call the question on that amendment.

(Amendment agreed to)

The next item we need to deal with is Mr. Pacetti's amendment LIB-1.

Mr. Pacetti, I think you wanted to speak to this before moving it.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Yes.

Which one is it again?

[The Chair, Conservative, James Rajotte]

This is LIB-1. This deals with corporations related to registered or previously registered charities.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

My understanding is that it's not entirely in order, so before I move it, when it might possibly be ruled out of order, I'd like to hear—

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

Yes, it is in order.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

I'd like to hear from the officials. I asked this question of them on.... Or I think it was Mr. Chong who asked the question.

Basically, is there a definition of “related companies”, two charities? Is it possible to do this in another manner?

What we're trying to do here is catch all related companies, incorporated or non-incorporated, that may be using charitable entities. They may be trying to avoid the disclosure amendments we just put forward, so they may use a profit or non-profit entity to get away with not having to disclose their executive remuneration.

Did I just make any sense?

[Edward Short]

Since you're talking about corporations, you would probably prefer to say something like “controlled directly or indirectly, in any manner whatever”.

What you're talking about really, I think, is a situation in which it is a corporation of the charity. Relationship is defined in the Income Tax Act. It applies to individuals who are related by blood, for instance, or by marriage, and it also applies to corporations. If one person controls a corporation, then they are related, or if there are two corporations and they're both controlled by the same person, then that's fine.

If you're trying to get at something different from that—let's say, for instance—

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

I don't mean to interrupt, but I don't see how that's possible for a charity, because no one actually controls a charity, isn't that right?

[Edward Short]

No. Correct me if I'm wrong, but I think you're interested in corporations that are controlled by a charity. So you'd be—

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Not necessarily; the corporation may be controlled by the directors who are getting compensation from the charity.

[Edward Short]

Yes. In such a case, using the word “related” is not necessarily going to pick that up.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

I'm an accountant as well, but I'm not a tax expert. I couldn't find, and I didn't have the time, either.... I couldn't find the right words or the right terminology, because the corporation of the executive would be totally independent. I don't see how it could be related to the charity.

[Edward Short]

In other situations in which we've had to deal with this problem, we've usually made reference to persons dealing non-arm's-length. It could be, for instance, a corporation that's dealing non-arm's-length with a charity. Under definitions in the Income Tax Act, there could be something in the statute that tells you when they're dealing non-arm's-length, but failing that, if they're dealing non-arm's-length as a question of fact, then you've established that link.

I don't actually know whether or not that's what you want to get at here.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Basically I'm trying to avoid the next step. All any executive who is trying to get away from having his or her name disclosed has to do is have their salary or remuneration paid to a corporation, or even a non-profit.

I don't think this amendment does it and I'm willing to retract it, but if you can, at least mull it over. When the bill goes to the Senate, perhaps you can provide us with a better amendment.

[Edward Short]

You're still looking for somebody who's an employee of the charity, though. Factually they're an employee of the charity, but they're being paid by a corporation. Maybe they're trying to do that to try to avoid the rule. I don't know that they do, necessarily, because if legally they still have an employment relationship with the charity, then they should be caught by the rule as it is, without this.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Could it be “a specified investment business”? I don't know.

[The Chair, Conservative, James Rajotte]

I think at this point we're discussing the concept. It was introduced by Mr. Chong as a concept.

I have Mr. Wallace.