Finance Committee on Feb. 14th, 2012

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you, Mr. Chair.

I, too, would like to thank everyone for all the great work that all of your organizations do. Specifically in our community of Kamloops—Thompson—Cariboo, some great work is happening.

I think we've had four suggestions now. We've had the stretch tax credit. We've had raising from 27% to 42%.... We've had the real estate and private shares. Those are really the substantial suggestions that have come forward in terms of the opportunities.

What I would like to focus my first question on, though, is the real estate. Perhaps I'll address this to Mr. Robinson.

Certainly when we heard from Karen Cooper at the Canadian Land Trust Alliance, she talked about how the extension of the capital gains exemption to gifts of real estate will undermine the existing ecogift program, which was of course first established to combat habitat loss and to conserve important wildlife habitat and ecologically sensitive lands. From her perspective, I guess, she was really thinking that some of the others would be preferable, because she was quite concerned about the impact in terms of her organization.

I note that you actually were speaking in favour of that. Would you please give us your perspective on that particular issue?

[Peter Robinson]

Yes, certainly. Thank you.

I should also say that we're in favour of all of the initiatives that would actually stimulate donations, but when I say that real estate would have a more positive impact, I look at some of the patterns and the history we've had, and I see that a lot of our donors might have second properties—cabins, recreational property—so removing the exemption there is consistent with what they've already told us in terms of their legacies and what they want to give.

I think the earlier material you heard is actually quite important, because we're thinking essentially of residential properties. There would need to be some caveats and some restrictions around making sure that what we wouldn't lose are of course valuable ecological pieces of property, which would then be developed. You would have to build in there some restrictions on that.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Okay.

My next question is perhaps for Mr. Bussey.

I know we're talking about tax incentives, but there are two things you talked about that piqued my interest. One was your charity certification program with independent standards. Could you talk a bit about that and how it compares to Revenue Canada and accreditation, and how much further it goes? Please share with us a little bit about that piece.

[Barry Bussey]

Sure. I'd be happy to.

Since 1983 we have established a seal of accountability process. We have 3,200 members, but not every one of those members has reached the point of being able to advertise the seal of accountability, the CCCC seal of accountability. We have some 180 charities right now that have achieved this.

They are required to do a number of things. They're to have an independent, active governing board. They must have an independent financial audit, and the CCCC will also audit their charity to make sure they're fulfilling the obligations and the standards of the CCCC. They need to be committed to public financial disclosure. They need to undertake regular evaluation of programs for their effectiveness and their efficiency, and they need to have these policies and processes in place.

We also have a code of accountability dealing with ethical fundraising and financial accountability that we require our members with this seal to follow. We also have policies dealing with integrity.

We have this as an ongoing process. We actually audit these members. When they have this seal of accountability, we're standing behind them.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

You also briefly mentioned CRA flexibility. Was that only in relation to your comments later about how you were able to expand and move into foreign countries?

Maybe we'll have to leave it for another time, but could you think about that?

[Barry Bussey]

Okay.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Perhaps I'll have another round.

[The Chair, Conservative, James Rajotte]

Thank you very much, Ms. McLeod.

We'll go to Mr. Brison, please.

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you, Mr. Chair.

Thank you to each of you for appearing before us today.

I've been an MP for almost 15 years. Over the last year or so, I've been hearing more from people in the non-profit sector about CRA—Revenue Canada—audits and an increased level of audit activity from Revenue Canada, particularly around the area of advocacy.

I'd be very interested in hearing if you, as individual organizations, have experienced or seen that kind of change in recent years.

[The Chair, Conservative, James Rajotte]

Go ahead.

[Don Hutchinson]

Thank you, Mr. Chair.

In the evangelical community, it's a very interesting thing, because for us, our expression of faith is not something that is kept private. It's something that extends into the public square and includes presentations on public policy initiatives.

Yes, there are questions from the CRA in that regard. We can't verify whether the increase in audit activity is because of complaints or whether it is because of an audit cycle and random selection. We do know that we're making more of an effort to inform members of the evangelical community as to the guidelines in CPS-022 that talk about political activities.

We have tried to simplify it, because when you think about the average charity, it doesn't function with a lawyer and an accountant; it functions with people from the community. Oftentimes in an evangelical church, the most educated person is the person who is standing in the pulpit, and his or her training has not been in law and finance. We try to simplify and communicate the information, but it does seem like there are more questions about advocacy-related issues.

For us, and within our community, we try to encourage the engagement to be based on biblical principles, so that we are actually advancing our religious beliefs in our participation in the community, rather than simply advocating for something that is the most popular item of the day in the political world.

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you.

[The Chair, Conservative, James Rajotte]

Mr. Robinson.

[Peter Robinson]

I have been with the organization for four years, as I mentioned earlier. In the time I have been there, there has been no correspondence between DSF and the CRA. It's a good relationship. I can say there were letters that came to the organization before my time. The CRA tries to make sure that you don't tiptoe over the lines, so we put in place mechanisms to make sure we would not receive one of those letters again.

The only downside—I think this goes to your question—is that it means we spend quite a bit of time, when we come to putting forward public policy statements or opinions, just making sure we've taken into account the implications of that with respect to charity rules. It's not a bad thing, but it does mean that we put in additional effort to do that.

[The Chair, Conservative, James Rajotte]

You have one minute, Mr. Brison.

[Scott Brison, Liberal, Kings—Hants, NS]

There's a real challenge in trying to delineate between political advocacy and expressing public policy views that reflect your expertise or the views of your members. I see that 10% figure as being a difficult one to quantify. That's something I think we ought to consider as a committee.

I have a quick final question. It's on the area of impact investing and social finance. I have the report here from the Canadian Task Force on Social Finance, with people ranging from Stanley Hartt, who is the former deputy finance minister and chief of staff to Brian Mulroney, to Paul Martin, of course, who was the Prime Minister and Minister of Finance.

Do you believe we should, as a committee and as part of this study, spend some time studying the potential public policies to mobilize impact investing?

[The Chair, Conservative, James Rajotte]

Let's have one person respond to this.

Mr. Bird, please.

[Ian Bird]

That's a great question.

One of the things that I think has emerged in recent years, and is reflected in the task force report and its one-year update—and we see this at foundations because foundations are key impact investors and responsible investors—are those intelligent gifts that were made, in part incented by the public policy regime around tax, that have created endowments. They've created pools of capital that enable the kinds of investments you are talking about.

This is one of the key sources of community capital through which communities can be strengthened. If you could follow the chain between the tax incentive opportunities you are going to recommend and what that means for impact investing, you'd be doing a good service for the country.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go to Mr. Hoback, please.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

I'd also like to thank the witnesses for being here today.

Mr. Robinson, you talked about being here on Valentine's Day. Just take comfort in knowing it's my 25th anniversary, so you and I can enjoy being in the doghouse together today.

There are lots of areas to go into in this discussion, but I think I'm going to go after an area that's a little bit closer to me. It's about accountability. It's to do with the fundraising techniques that some of the organizations use. I'm looking for some ideas on what to do.

I'll give you some context as to where I'm going. I had an uncle who was about 85, who passed away here in December. I'm the executor of the estate, so I'm going through items that are coming in his mail. What is really upsetting is the letters he was getting from groups claiming to be evangelical groups or Christian groups, and the amount of mail they were sending him to get more donations. I guess the frustrating thing is that when you look at those groups, they are groups I've never heard of, but they're running under a Christian banner or an evangelical banner. I know there are lots of good Christian and evangelical groups, so I'm not criticizing those.

I'm wondering whether you have a system for evaluating these groups so you can say to people that these are true groups whose work your association certifies as being reputable and who are reputable in how they use the money on the ground. Have you looked at doing anything like that?

Maybe I'll start off with you, Mr. Hutchinson, and move forward.

[Don Hutchinson]

Thank you.

Mr. Chair, the Evangelical Fellowship of Canada lists all of its affiliates on our website, whether they are our denominational affiliates, ministry organizations, Bible colleges, post-secondary education institutions, liberal arts institutions, or the individual congregational affiliates, so people can check there.

In addition to that, we do work cooperatively. We're a member of the Canadian Council of Christian Charities. They are an affiliate of the EFC, and they also have a members list that is available to the general public.

[Randy Hoback, Conservative, Prince Albert, SK]

What do you do to promote that list? I know the Internet is great for me and my generation, but for the senior generation.... My dad's 82. He's on the Internet probably more than I am, but there is a group that doesn't have access to the Internet or that information. Do you publicly go out and say, here's a list of good groups? And do you actually publish groups that you say do not make the grade?

[Don Hutchinson]

It's really not our position to indicate who doesn't make the grade once they have been approved through the CRA process. CRA makes those decisions on charities.

What we do have available is a 1-800 number if somebody wants to call us and ask about a charity. Publishing the list of the 39 denominations, the 80 organizations, the 34 schools, the nearly 1,000 congregations—we'd be publishing a book to distribute to people. They are welcome to call our 1-800 number and we will check for them.

[Randy Hoback, Conservative, Prince Albert, SK]

So you have set up a process so that if I have a question I can call your organization and at least have that group checked out to say whether or not they're part of your approved list.

[Don Hutchinson]

You would be surprised at the people who manage to get through to me on my phone line and ask some very interesting questions. So I think a donor who wanted to ask.... I know the CCCC also has a 1-800 number.