Evidence of meeting #57 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was charity.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Mark Blumberg  Lawyer and Partner, Blumberg Segal LLP, CanadianCharityLaw.ca
Michael Cloutier  President and Chief Executive Officer, Canadian Diabetes Association
Kate Bahen  Managing Director, Charity Intelligence Canada
Shawn Pegg  Director, Policy and Research, Food Banks Canada
Mary Dodd  Vice-President, Finance and Operations, Women's College Hospital Foundation
Allyson Hewitt  Director, Social Entrepreneurship, Social Innovation Generation

4:10 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

So there have been charges.

4:10 p.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

Both of them have had their charitable status revoked. I do not believe the individuals who were running this pyramid scheme have been charged. It will be like Whack-a-Mole, and we'll see the individuals pop up somewhere else in the near future.

4:10 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

In terms of the impact of, for instance, the changes in the capital gains tax for gifts of publicly listed securities, we've heard from almost every charitable organization that it has had a significant impact—that is, a tax change—and the groups who actually raise money for hospital foundations, who raise money for the cancer foundation, who raise money for universities, are saying that it has had a significant effect, as we heard from Ms. Dodd.

Furthermore, it's important to recognize that in terms of actual tax expenditure costs, assuming that the disposition of the stock or asset would not take place otherwise, there is actually no cost to the taxpayer. I think that's important to realize as well, because the chances are that they may just hold on to the stock, if they didn't in fact donate it at the time.

Mr. Pegg, has the demand for food banks in Canada risen significantly in recent years?

4:10 p.m.

Director, Policy and Research, Food Banks Canada

Shawn Pegg

It has. It's up. In 2011 it was 26% higher than it was in 2008.

4:10 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

In my riding, I can tell you—the Wolfville food bank as an example—the demand for the Wolfville food bank has doubled in the last couple of years, so I'm hearing that as well.

This change will have a significant impact on your capacity to get donations of food for the families who depend on your food bank.

4:10 p.m.

Director, Policy and Research, Food Banks Canada

Shawn Pegg

I would say the tendency, I believe, is for donors to move their money into more front-line services during bad economic periods, so food banks have not been closing up shop because they don't have any food. Donations to food banks, from what I'm hearing, have actually increased since the economic downturn. They just haven't kept up with increasing demand.

4:10 p.m.

Conservative

The Chair Conservative James Rajotte

You have 45 seconds.

4:10 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

And this tax change ought to make—

4:10 p.m.

Director, Policy and Research, Food Banks Canada

Shawn Pegg

We believe that it would help, yes.

4:10 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

The issue of advocacy is an important one. Clearly, we want organizations to be focused on the charitable sector, the charitable work they undertake, but it's also important to realize that charitable organizations are run by citizens who have opinions on public policy issues.

I hope that in our deliberations, colleagues, we consider that, for instance, somebody who runs a food bank or a group of food banks probably understands issues around poverty and income inequality and the issues around front-line services. Somebody involved in a hospital foundation probably has some opinions on health care. This isn't political—

4:15 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you. We'll leave that as a statement, Mr. Brison.

4:15 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Thank you very much.

4:15 p.m.

Conservative

The Chair Conservative James Rajotte

Mr. Hoback, go ahead, please.

4:15 p.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

Thank you, Chair.

I welcome the witnesses here today. It's great. Actually, it's very enlightening. There's been some interesting information here.

One of the things we're trying to do here is increase charitable donations. Ms. Bahen, you brought up that 31% versus 69%, and it floors me a little bit that transparency is such a major issue among Canadians right now in looking at whether they're going to donate to a specific charity or not.

I'm just kind of curious. There are a couple of things that you talked about that have come out of some of the questioning. One is the governance. You talked about these two out of a hundred that were hijacked. Do you think we have proper governance models around our charities to prevent things like hijacking from happening?

4:15 p.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

No. I think the CRA needs more resources. I'm taken aback by the size of—

4:15 p.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

It's very big.

4:15 p.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

It is, and I think it's growing. I think the landscape has changed. Just by the nature of the operations, it's difficult to quantify. You don't know how many are out there, so I don't have any hard facts. I would suspect it's a growing problem, and it's going to need tougher action to crack down on.

4:15 p.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

Mr. Blumberg, you look like you want to add to that.

4:15 p.m.

Lawyer and Partner, Blumberg Segal LLP, CanadianCharityLaw.ca

Mark Blumberg

Yes, sure. Since 2007, CRA's top two priorities have been to end abusive charity gifting tax schemes and fraudulent receipting.

In 2006, $1.3 billion worth of receipts were issued that were part of just the abusive tax schemes. CRA has worked very hard to try to knock out the schemes. They've deregistered probably about 30 charities that have been involved with these schemes, and the number is now down to $300 million a year. So it went from $1.3 billion to $300 million, which is, as far as I'm concerned, not good enough, but it's certainly heading in the right direction. I think it's important that those types of schemes be eradicated, because it obviously is not going to enhance the public's trust in charities if they see situations like that.

4:15 p.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

I also remember, when you were here in January in front of the finance committee, that you talked about charities and the transparency and that whole end of it, to ensure that if a person like me is going to give to a charity, I know exactly what the charity is and what it does. I need transparency. I need to be able to look—whether it's on the Internet or somewhere else—and see that transparency.

I believe we've addressed some of those issues in the budget. I believe the Minister of Finance has done a very good job with getting us started and going down that road in increasing transparency. It's very important.

What I find frustrating and what I will look for your comment on is.... We're going to increase the transparency, we're going to look at increasing the rules in the budget, but we're going to see our opposition parties vote against that. Do you think that's appropriate for opposition parties to stay secretive, or do you think they want some transparency also?

4:15 p.m.

Lawyer and Partner, Blumberg Segal LLP, CanadianCharityLaw.ca

Mark Blumberg

I think the opposition parties may have some questions about it being an omnibus bill or something. I don't understand all of those issues. I can say that I think if it was just up or down on the charity transparency things, everyone would vote for the budget. I think there's more to it than that.

In 2011 there were some very good transparency pieces put forward by the government. There was the ineligible individuals idea. If someone abuses a charity, even if they're in another charity and not abusing it, they could be asked to leave that charity. I think that's important, because there are some people—maybe none in this room—who control 10, 20, 50, 100 charities themselves. It doesn't help to get rid of five or 10 when they control 100. There are some issues like that where there are some concerns. Some good ideas were brought forward. I am hopeful that those will slowly be implemented and we will see some improvement in some of those things.

I want to emphasize that we're talking about a few hundred people doing this sort of abusive behaviour, and yet you have 15 million or so volunteers with charities. We're just talking about 500 people doing this bad stuff.

4:15 p.m.

Conservative

The Chair Conservative James Rajotte

You have one minute.

4:15 p.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

Going to the charities themselves, how do you get above...?

Maybe the food bank, you've got a great brand, a great name, as far as people being comfortable donating to you, whether it's at a hockey game where we drop off a bag of food.... They do a lot of creative ideas, not just for donating money but donating at events. How do you deal, in your industry of charitable organizations, with organizations that are unscrupulous? How does that make you feel? What impact does that have on your organization? Does it create doubts for you? Obviously the polling is showing that.

4:20 p.m.

Director, Policy and Research, Food Banks Canada

Shawn Pegg

It makes it very important that you are out there in the public eye. You need the time and the resources to do that. That's the biggest thing we're trying to do. For individual food banks, you need to have community members on your boards. You need to have them involved. There are a lot of things that charities need to do that governments have no role in, when it comes to putting yourself above, as you said, a so-called unscrupulous charity.

4:20 p.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

Ms. Dodd, your organization—