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 charities.

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

4:25 p.m.

Conservative

Mark Adler York Centre, ON

Presumably, this isn't the only organization in this country doing these kinds of things. What's the solution? If we strip them, as you say, of their charitable status and move them into a category where they become less transparent and less accountable.... What's the solution?

4:25 p.m.

Lawyer and Partner, Blumberg Segal LLP, CanadianCharityLaw.ca

Mark Blumberg

The solution in part is some of those things. It would be important to have more transparency, so you have it across the board in the non-profit area, instead of making it.... It's not just IRFAN. With Ornge and other things, people are deliberately setting up structures.

In the case of Ornge, they spent $11 million on legal fees to set up structures that largely deal with lack of transparency. Have non-profits involved to have the transparency less in that case....

I would suggest to you to level the playing field a bit there. Have charities have a lot of transparency, as they do—maybe even more—but have non-profits have it too.

I would also suggest that charities that do foreign activities need to be more careful in how they're doing it. CRA has some good rules on direction and control for foreign activities.

IRFAN wasn't following those rules. I would suggest that there be more education in that area for charities, so they understand it.

4:25 p.m.

Conservative

The Chair James Rajotte

You have one minute.

4:25 p.m.

Conservative

Mark Adler York Centre, ON

What about foreign government money, like Saudi money or Kuwaiti money, supporting domestic charitable organizations in this country?

4:30 p.m.

Lawyer and Partner, Blumberg Segal LLP, CanadianCharityLaw.ca

Mark Blumberg

Well, money comes from abroad. I believe CIDA spends a lot of money doing stuff around the world. Some people don't like some of the things that CIDA supports, like equality for women and other things. But people abroad also give to Canadian charities and things like that—

4:30 p.m.

Conservative

Mark Adler York Centre, ON

But if foreign governments are supporting Canadian charities to engage in political activity in this country, I mean that should be known to everybody, shouldn't it?

4:30 p.m.

Lawyer and Partner, Blumberg Segal LLP, CanadianCharityLaw.ca

Mark Blumberg

You know what? My take would be that—

4:30 p.m.

Conservative

Mark Adler York Centre, ON

As a political candidate, I have to disclose whoever donates to my campaign.

4:30 p.m.

Lawyer and Partner, Blumberg Segal LLP, CanadianCharityLaw.ca

Mark Blumberg

I don't have any problem with disclosure and transparency. For the environmental charities that are being accused of all sorts of things under the sun, I don't think even those would have a problem. If you look at the U.S. tax returns, the 990s, you can see how the money is flowing to Canada and being used for various types of initiatives and activities. I think it's already out there.

4:30 p.m.

Conservative

Mark Adler York Centre, ON

But we would have to go to Washington to find out if—

4:30 p.m.

Lawyer and Partner, Blumberg Segal LLP, CanadianCharityLaw.ca

Mark Blumberg

Actually, just go on your computer. You go to GuideStar. It takes five minutes, and you can pick out any foundations you want and read their tax returns, which are much more extensive than what Canadian charities have to file, and you'd be able to find out that information.

I think the political thing is a little bit of a red herring. Quite frankly, I'm more worried about $20 million going to a terrorist organization in the Middle East than I am about some Americans who care about the environment in Canada and supporting stuff here. After all, if you're in Buffalo and something happens in Fort Erie, it affects you. I think these are our neighbours. They're not foreigners; they're our neighbours.

4:30 p.m.

Conservative

Mark Adler York Centre, ON

Thank you.

4:30 p.m.

Conservative

The Chair James Rajotte

Thank you, Mr. Adler.

We'll go to Mr. Thibeault, please.

May 8th, 2012 / 4:30 p.m.

NDP

Glenn Thibeault Sudbury, ON

Thank you, Chair.

First off, I'd like to thank each of you for being here, but also for all the great work that you do each and every day. Prior to being elected, 15 years of my life was dedicated to the not-for-profit sector. I was the executive director of the United Way and I worked for the Diabetes Association for a while, so I know some of the ins and outs and some of the things you face each and every day.

I recall many times sitting in front of my computer and pulling my hair out at some of the regulations that are in place. You're a charity trying to do the great work that you can do for the people that you're trying to serve within your community.

We're talking about the tax incentive piece, and yes, I think if you were a good fundraiser, you would look at calling Mr. Smith or Mrs. Smith, who last year gave a thousand dollars, and asking them to increase their donation this year because you need more money this year—there have been more closures of programs, or whatever is happening out there, and you need more funding. As a good fundraiser, you figure out why Mr. or Mrs. Smith would give that amount of money. Then you would put the phone call in or you would go and have that face-to-face meeting.

The one thing I think we never did was say that this was a great way to give, that you get your tax money back at the end of the day. You pull on the heartstrings. You talk about the importance of your charity and you make sure this person wants to give. I think those are the important things that charities recognize.

One of the things that I have always found difficult is that while we're evolving as charities—looking at databases, how can we be better at what we do—it seemed that CRA never really modernized. Ms. Hewitt, you spoke to it, I believe, or at least your report talked about even social enterprise. So many charitable organizations out there or not-for-profits are looking at social enterprise as another way of finding a way to raise funds for the programs they're offering.

Is that something we should be looking at, seeing the CRA modernize a lot of their rules and regulations to ensure that charities—not that they can have a free ride—can move forward in the things that charities see as ways to move forward and modernize?

Ms. Hewitt, I'll hand that over to you.

4:30 p.m.

Director, Social Entrepreneurship, Social Innovation Generation

Allyson Hewitt

Thank you very much.

Yes, I would absolutely like to support that. When we look at what's happening for the three main sources of support for charities, you'll see government grants and donations are generally declining or, in some cases if we're lucky, staying the same.

Social enterprise, the revenue that not-for-profits and charities are able to generate, is the only source of income that's rising, and we need to create an enabling environment so that we can stop dependencies on grants and donations. I think they're critical. As a Canadian, I'm proud to support charities, I'm proud to work for a charity, but I do think it's really important to think about.

Let's catch up with the rest of the world on this, and then allow social enterprise in charities and not-for-profits, in guidelines that are very clear and are supported.