Bill C-4 (Historical)

Canada Not-for-profit Corporations Act

An Act respecting not-for-profit corporations and certain other corporations

This enactment establishes a framework for the governance of not-for-profit corporations and other corporations without share capital, mainly based on the Canada Business Corporations Act.
The enactment replaces the “letters patent” system of incorporation by an “as of right” system of incorporation. The current requirement for ministerial review of letters patent and by-laws prior to incorporation is replaced by the granting of incorporation upon the sending of required information and payment of a fee.
The enactment provides for modern corporate governance standards, including the rights, powers, duties and liabilities of directors and officers, along with related defences, and financial accountability and disclosure requirements.
The enactment sets out the capacity and powers of a corporation as a natural person, including its right to buy and sell property, make investments, borrow funds and issue debt obligations.
The enactment sets out the rights of members, including the right to vote at a meeting of members, call a special meeting of members, advance proposals for consideration at meetings of members and access corporate records.
The enactment provides requirements for financial review by a public accountant and financial disclosure based on whether a corporation has solicited funds and its level of annual revenue.
The enactment gives the Director powers of administration, including the power to make inquiries related to compliance and to access key corporate documents such as financial statements and membership lists.
The enactment includes remedies for members and other interested persons to address the conduct of a corporation that is oppressive or unfairly prejudicial to or unfairly disregards the interests of any creditor, director, officer or member.
The enactment provides procedures for the amalgamation, continuance, liquidation and dissolution of a corporation and other fundamental corporate changes. The continuance provisions govern the continuance of bodies incorporated under other Acts and provide a power for the Governor in Council to require a federal body corporate without share capital to apply for continuance under the enactment or be dissolved.
The enactment modernizes the legal regime that applies to corporations without share capital created by special Acts of Parliament by providing that those corporations are natural persons, requiring the holding of an annual meeting and the sending of an annual return, and regulating a change of a corporation’s name and its dissolution.
The enactment gives corporations with share capital created by special Acts of Parliament and subject to Part IV of the Canada Corporations Act six months to apply for continuance under the Canada Business Corporations Act or be dissolved.
The enactment makes a number of consequential amendments to other federal Acts. It provides for a phased repeal of the Canada Corporations Act as corporations cease being subject to the Parts of that Act.

Canada Not-for-profit Corporations Act

[Diane Ablonczy, Conservative, Minister of State (Small Business and Tourism)]

moved that Bill C-4, An Act respecting not-for-profit corporations and certain other corporations, be read the second time and referred to a committee.

Madam Speaker, I am pleased to have this opportunity to speak to Bill C-4. This legislation will establish a new Canada not-for-profit corporations act. It will also transfer 11 corporations established in years gone by by special acts of Parliament to the Canada Business Corporations Act. It will then allow for the repeal of the outdated Canada Corporations Act.

This is a bill that touches all of us. I suspect that all members are active participating members, if not board members, of at least one not-for-profit corporation. Passage of this bill will result in the modernization of one of Canada's most important framework statutes. A new federal not-for-profit statute would act as the main 21st century vehicle for federal incorporation of not-for-profit corporations and other corporations without share capital. It would ensure that federally incorporated not-for-profit enterprises are governed by an up-to-date legislative framework that is flexible enough to meet the needs of both small and large organizations while providing the accountability and transparency necessary to meet the expectations of the Canadian public.

There is widespread recognition of the importance of strengthening Canada's not-for-profit sector, including the social purpose enterprises that form its backbone. These organizations are an important pillar of the economy as a whole. There are approximately 160,000 not-for-profit organizations operating in Canada. When universities, colleges and hospitals are included, the 2003 revenues of the sector were over $136 billion, up from $86 billion in 1997, a decade ago.

The not-for-profit sector is one of the country's largest employers, employing more than two million people who are supplemented by over twelve million volunteers. Of those 160,000 plus not-for-profit organizations, approximately 19,000 are incorporated under federal law. They range from community associations with just a few volunteers to national organizations run by professionals with multi-million dollar budgets. They will all benefit from the provisions of Bill C-4, the Canada not-for-profit corporations act.

Right now, these organizations unfortunately are not well served by the current law, the Canada Corporations Act, or CCA. The CCA has not been substantially amended for more than 90 years. The corporate world, even for the not-for-profit organizations, has dramatically changed over nine decades. Advances in corporate governance, communications technology and financial reporting demand that framework laws meet the exacting standards expected by the public and the corporations themselves.

The not-for-profit sector has repeatedly said that the current statute no longer meets its needs. For example, under the current statute, the incorporation process is slow and cumbersome. There are no provisions for amalgamating two or more corporations. There are no provisions for modern communications technologies. Financial accountability and transparency is inadequate. Directors do not have adequate defences against unwarranted liabilities. Members have few rights, and the list goes on.

Passage of this bill will in large part address these inadequacies and demonstrate the government's commitment to strengthening the sector. The Canada not-for-profit corporations act proposed in this bill has been modelled after the Canada Business Corporations Act, which is a modern legislative framework based upon 21st century principles and practices. The new NFP act will help to ensure a vibrant not-for-profit sector that supports Canada's economy.

Make no mistake, this is definitely a bill whose time has come. Stakeholders strongly supported proposals for a new statute during a consultation process that included three rounds of national consultations in the fall of 2000, the spring of 2002, and the fall of 2005.

Bill C-4 will bring about major improvements. Although it is not possible to list them all in 20 minutes, I would like to briefly review the main features of this reform.

First of all, the bill provides for the long-awaited modernization of the incorporation process. Currently the only way for a not-for-profit organization to be federally incorporated is through the issue of letters patent by the Minister of Industry. This process, which is mandated by the statute itself, is burdensome, lengthy and potentially expensive.

Bill C-4 will allow incorporation status to be granted quickly to any organization that has submitted the required forms, including articles of incorporation and fees. The act will allow corporations broad discretion in setting themselves up and conducting their day-to-day affairs. In particular, they will be able to tailor their bylaws to suit their individual needs.

Under the current statute, there are many prescriptive sections about how an organization must conduct its affairs. The new statute will allow them to focus on what they do best.

A second modernizing feature of the bill is the area of electronic communications to facilitate member participation in corporate activities. Electronic communications is one of the most essential tools of the modern corporation. It speeds up the ability to gather information, make decisions and ensure those decisions are implemented.

In the context of not-for-profit corporations, it can cement the relationship between the corporation and its members, many of whom may be hundreds or even thousands of miles away. As a result, the bill will allow electronic communications between the corporation and its members, including the ability of the corporation to hold meetings entirely by electronic means if members wish.

In recent years, the need for business enterprises to be transparent and financially accountable has increased. This need exists in the not-for-profit sector as well, because they must establish and maintain a high level of public confidence in order to succeed. Bill C-4 addresses the need for financial responsibility with the introduction of a flexible set of rules that can be tailored to meet the needs of individual corporations.

Canadians expect that corporations that benefit from government grants or public generosity should be more transparent. Thus corporations funded by public donations or government grants must adhere to more rigorous requirements respecting the review and disclosure of financial statements.

In addition to making their financial statements available to their members, a requirement for all corporations under this bill, publicly funded corporations would be required to submit their statements to the government, which in turn will make them available to the public.

Another issue that has been addressed in this bill is the question of the liability of directors and officers. The present act contains unclear and inadequate standards for the rights, duties and responsibilities of directors and executives of non-profit corporations. That is a major source of concern for the non-profit sector.

Bill C-4 provides clear, objective standards of diligence based on modern concepts of corporate law. Under Bill C-4, directors and officers will have an explicit duty to act honestly and in good faith in carrying out their duties.

They will also have a clear defence against undue liabilities, including a due diligence defence. This defence, which is well known by the legal community and the courts, is a standard feature of other modern corporate statutes. In essence it states that if a director or officer acts with the care, diligence and skill that a reasonably prudent person would exercise under like circumstances, he or she would have a defence against a liability claim.

The bill would also allow corporations to pay defence costs when a director is accused and would allow for the purchase of liability insurance.

These measures are of particular importance. Not-for-profit corporations have been saying for years that because of liability concerns, they often have difficulties in attracting and retaining good directors, who are often volunteers. This bill will go a long way toward alleviating their concerns.

Bill C-4 provides members with a number of remedies in the event of a dispute with the management or directors of a corporation. These are well known to corporate law practitioners, as they are found in most other corporate statutes, including the Canada Business Corporations Act. They include court-ordered investigations to look into possible corporate malfeasance, including fraud and environmental issues among others.

The new act also introduces to the not-for-profit world the concepts of an oppression remedy and a derivative action.

The bill recognizes, however, that because many voluntary and non-profit corporations active in Canada are faith-based, it is vital that the courts not become a battleground where their tenets of faith can be challenged. Accordingly, the bill excludes the use of the oppression remedy and a derivative action when the court is of the opinion that the action being challenged is based on a tenet of faith.

This bill does not deal only with not-for-profit corporations. There is one other important component of Bill C-4: the transfer of jurisdiction of 11 special-act-of-Parliament business corporations from part IV of the Canada Corporations Act to the Canada Business Corporations Act, or CBCA. Bill C-4 therefore also benefits those few profit-generating corporations that are subject to the Canada Corporations Act.

Similar to the sections of the CCA that deal with not-for-profit corporations, this part of the act dealing with special-act business corporations lacks modern corporate governance features. The corporations subject to these provisions should be given the opportunity to operate more efficiently and effectively in today's global marketplace. By moving these 11 special-act business corporations into the CBCA, the bill gives them that opportunity. The CBCA is the main statute governing business corporations existing under the federal laws of Canada. It is a state-of-the-art statute that provides a proper accountability framework by defining the rights and responsibilities of directors, officers and shareholders. The CBCA also contains provisions relating to corporate finance, trust indentures, insider trading, financial disclosure and other forms of corporate transactions. With the passage of this bill, these modern corporate governance features will now be available to all these special act business corporations.

In closing, I want to emphasize that Bill C-4 is good for the Canadian economy. It will allow not-for-profit corporations to be more efficient and effective in the modern Canadian economy. Bill C-4 will also reduce the regulatory burden on these corporations. The new not-for-profit act is far less burdensome.

Once Bill C-4 becomes law, and after a three-year transition period, it will be possible to repeal the entire outdated Canada Corporations Act.

Bill C-4 springs from the need to replace an 18th century piece of legislation with a modern framework that reflects the imperatives of the Canadian economy's diversity and the changes that have come about in recent years. It directly addresses these issues, and what is more, provides a solid basis on which healthy, dynamic, well-run not-for-profit corporations may flourish.

I urge all members to support this important legislation.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Madam Speaker, Bill C-4 does not include a classification system. The framework is permissive and flexible, allowing organizations to choose how to apply the relevant provisions.

Does the minister consider the lack of a general classification system to be a flaw?

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Madam Speaker, I thank the member for the opportunity to clarify the corporations that will be included in the new legislation. They will be not-for-profit corporations or corporations without share capital. Those corporations will be included in this new act.

Business corporations that do have share capital will be included in the Canada Business Corporations Act. That is the difference. I hope the matter has been clarified for my friend.

The House resumed from February 4 consideration of the motion that Bill C-4, An Act respecting not-for-profit corporations and certain other corporations be read the second time and referred to a committee.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Mr. Speaker, as my party's industry, science and technology critic, it is my honour to say a few words about Bill C-4, An Act respecting not-for-profit corporations and certain other corporations. This bill, you will remember, originated with the Liberal Party almost a decade ago in order to review the regulations and the governance rules of not-for-profit organizations.

As we know, this bill specifically concerns not-for-profit organizations; it would replace part II of the Canada Corporations Act and it would apply to some entities currently covered by part III of that act.

The bill would also provide for continuance of companies that were created by special acts of Parliament and subject to part IV of the Canada Corporations Act and, finally, it would repeal the Canada Corporations Act.

Bill C-4 was developed as a result of the previous Liberal government's commitment to the voluntary sector task force initiated in 1999 to modernize the governance of the non-profit sector. It proposes substantial changes to regulations going back to 1917.

Many of the corporate governance provisions, as well as many other provisions found in the bill, are modelled on the corporate governance provisions contained in the Canada Business Corporations Act, the statute that regulates federally incorporated for profit corporations; that is business corporations.

Generally speaking, this legislation is seeking to provide a framework for the modern corporate governance of some 20,000 federally incorporated not-for-profit organizations that include community, ecological, cultural and religious organizations as well as national charities and many others.

Since July 2000, and then again in March 2002, Industry Canada has shared its consultation reports while organizing new consultations across the country in order to discuss different reform alternatives.

Following the second round of consultations Industry Canada released a paper entitled “Reform of the Canada Corporations Act: The Federal Not-for-Profit Framework Law”. Two years later the Liberal Party introduced the first version of the non-profit corporations act as Bill C-21. The bill passed second reading, underwent three committee meetings, but did not reach a final vote before the election call in late 2005.

Under the Conservative government, the bill was reintroduced as Bill C-62 but only passed first reading before being lost in the September 2008 election call.

Bills C-62 and C-4 certainly do contain amendments to Bill C-21, as well as the definition of a “soliciting corporation”.

We are all aware that soliciting corporations receive part or all of their funding from public sources, whether by fundraising or other means.

I should point out that Bill C-4 is flexible enough to address the needs of not-for-profit organizations of all sizes effectively by introducing clearer rules and both accountability and transparency for the entire not-for-profit sector.

Overall, the bill introduces significant changes with respect to financial accountability, the rights and responsibilities of directors and officers, and the rights of members.

If passed, Bill C-4 will implement new rules on financial reporting based on the organization's annual revenue and sources of funding, new rules on standard of care for directors and new rules for direction liability, new rules that permit written resolutions in place of meetings and allow corporations to avail themselves of technological advances, also new rules permitting members access to certain information to monitor director activities and enforce their rights within the organization and a streamlining of the incorporation process and a reduction in the regulatory burden for the not for profit sector.

In other words, with this new bill, the sometimes endless and often complicated incorporation process will be streamlined and simplified.

Organizations will be able to fill out electronic forms and pay fees on line, and the current requirement that applications for incorporation are subject to a departmental review will be eliminated. This will make the incorporation process easier and faster.

The new office of director of corporations would replace the current system of ministerial review and discretion. This director would have administrative and regulatory functions and would be able to issue incorporation, amalgamation or dissolution certificates, investigate and make enquiries about compliance and access key corporate documents like membership lists and financial statements.

As stated, the new bill would also make significant changes in terms of financial accountability, the rights and responsibilities of directors, officers and members' rights. Improving transparency and accountability is a major objective of the new legislation through new rules on financial review and disclosure. All non-profits will need to make their financial statements available to their members, directors and officers in addition to the director appointed under the act.

Directors of soliciting organizations will have to make their records available to the public. This legislation will also improve financial accountability with new accounting audit rules. These rules recognize that not-for-profit organizations have different levels of revenue and different funding sources. All soliciting and non-soliciting organizations classified under the new legislation as having “significant” revenue will be subject to an accounting audit.

I want to point out that the stakeholders targeted by this new legislation supported the proposed changes during initial consultations, as did the witnesses who testified during the earlier committee meetings.

Strong support was given for the proposed reforms dealing with standard of care, due diligence defence, indemnification and insurance and limited liability of directors and officers. Some of the areas where there was less unanimity between those consulted included clarification of the rules governing non-for-profit corporations versus registered charities, whether there should be classifications under the bill that would stipulate different requirements based on the type of not-for-profit organization, whether it should be necessary to file bylaws and, finally, the level of auditing required.

The committee can certainly examine these points in detail. In the meantime, speaking as a person who has been involved in not-for-profit organizations, I must say that I support this legislation wholeheartedly.

I want to emphasize that my Liberal colleagues and I are eager to work with our colleagues on the government side to pass this important legislation, which has been a long time coming.

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, it is a privilege to hear my hon. colleague who is one of the giants of science and one of the great explorers of our country.

What are my hon. friend's views on what the government should have done in the budget and what it still can do to maximize investments in research and development?

We know the value added benefits for research and development in our country are enormous to allow us to capitalize on the future needs of our country and the great challenges that face us in the world, not only the environmental challenges but the social challenges.

I would like to know not only what investments should be made, but how they should be made and how we can maximize the interplay between the research and development units and post-secondary institutions and the private sector within our country and between countries.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Mr. Speaker, it is certain that in this time of economic crisis we must put a great deal of emphasis on the importance of science, research and innovation for the future of our country.

The Liberal Party, back in the 1990s, under Mr. Chrétien and Mr. Martin, had the foresight to put into place some extremely important programs, such as the Canada Foundation for Innovation, the Canada research chairs, Genome Canada, which we have spoke of lately, and also the very important program to fund the indirect costs of university research. Those programs were far-sighted, at a difficult financial time, I might add, in the mid-1990s, and have been acclaimed by our universities and our research hospitals as providing that necessary support from the federal government to re-invigorate research in our country.

As we have seen in the past week or so, a number of these organizations, such as Genome Canada and, more recent, the three national funding research councils and our scientists have all decried that the programs I just mentioned are not continuing to receive steady support, particularly at this time when it is crucial for us to continue to build on that capability.

I hope and I pray that the government will take note of this and realize that science is something that we must support for the long run. It is not something that we address on an ad hoc basis when we decide it is time to make a small injection to turn on the tap and turn it off. We must realize the importance of steadily supporting scientific research in our country.

[Bruce Hyer, NDP, Thunder Bay—Superior North, ON]

Mr. Speaker, we understand the need for bringing our corporations act into the 21st century. However, we are rather disappointed that a fairly straightforward six page present act has been expanded into a rather bloated a one hundred and seventy page document. We believe there will be need for amendments to the bill.

We are particularly concerned that the bill would increase the record keeping and regulatory burden on non-profits, especially the small non-profits. It seems to treat the average legion social club the same as it treats the Red Cross of Canada. We are concerned that the record keeping requirements will become onerous.

We hope there will be some trimming down and some thought given to that sort of thing. What we seem to have is a 170 page expansion and legalization of Robert's Rules of Order.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Mr. Speaker, I take note of the member's comments. It is a large document, but the consensus that has been reached in consultations over a period of six to eight years is this is in fact a document that streamlines and clarifies the responsibilities and the processes involved with being a non-profit corporation.

However, I take note of the member's comments. It would be important to ensure that small organizations would not burdened to the same extent as larger organizations. I welcome the member's input to the committee discussions that will take place in due course to move toward a ratification of the bill.

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, in order to maintain scientists of the calibre that my colleague just mentioned, and others in our country, we have to be able to cultivate them from the very beginning.

Senator Lillian Dyck, from the other place, has started, with her friends, a way for children to have access to science and to have it available to them in a fun way. This is extremely important, as we know, to enable children to have exposure to science, for them to be inspired by science, and for them to be interested in science. I hope that for some of them at least they would be able to follow a course of action professionally later on in life that follows one of the sciences.

I would like to ask my hon. friend, while this is not in the realm of the federal government, does he not think that the federal government has an enormous opportunity to work with the provincial ministries of education to enable children to have access to science, to implement scientific programs that expose children to science in a fun way? In doing so, we would begin to cultivate that fertile imagination of children and inspire them. We would involve them and include them in the great world of science and the wonderful world of discovery that awaits all of us.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Mr. Speaker, I thank the hon. member for his very important comments. Although, as he points out, education is a provincial matter, I think there is federal involvement and a leadership role that can be assumed by the federal government.

In the particular area that I have been involved in my professional life, which is the space business, I have had the opportunity to interact with the provinces during the past 25 years. In their primary and secondary level curriculum, they have included some modules that deal with space and astronomy. There is no question about it, those are areas that stimulate the minds of young people and perhaps in some cases may make them think about science as being a potential career of their own.

I think the federal government can work with provincial jurisdictions to create a more positive scientific culture in our primary and secondary schools for the good of the country.

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, I should have asked my friend a question regarding astrophysics. Canada is the third leading country in the world in investments in astrophysics. In fact, our country, and this is a great news story, actually punches well above its weight. There are opportunities right now in investments in the large Array telescope that we have and in the post-Hubble telescope to make investments which have huge opportunities and implications for us, not only in astrophysics but in the applied sciences.

My friend is an engineer by trade, an electrical engineer if memory serves me correctly. Does he not think that our government should make a concerted effort to support our astronomers and to support astrophysics because we know that the investment in astrophysics results in a 7 to 10 times to 1 investment in the monies that are put in?

Really, this is a great news story for Canada and Canadians because our astrophysicists punch well above their weight. Canada is the third leading country in the world in our capabilities and discoveries in this important area.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Mr. Speaker, it is true, Canada does punch above its weight in astronomy. I think it raises a very fundamental point, the importance of supporting not only applied science in this country but also fundamental science. For those who do not know it, our astronomers are the pride of this country in terms of published articles and discoveries. That is something I hope more Canadians will become aware of.

[Robert Vincent, Bloc, Shefford, QC]

Mr. Speaker, since this the first time I have risen to speak since the session began, I would like to begin by thanking the people of Shefford for trusting in me for the third time to defend their interests in Ottawa.

For several years, a number of representatives of not-for-profit corporations have been pressing to have the Canada Corporations Act modernized. In the past decade, numerous people have taken part in consultations, while others have made written submissions to Industry Canada calling for rapid amendments to the Canada Corporations Act. In recent years, some people have expressed concern that the Canada Corporations Act is out of date and no longer meets the needs of the not-for-profit sector. Stakeholders have publicly called for reform of the act and, in 1999, the task force on the voluntary sector, which was created by the federal government, called for improvements to the regulatory framework governing this sector. Industry Canada's proposal to modernize the Canada Corporations Act forms part of the task force's plan.

In July 2000, Industry Canada released a consultation paper entitled Reform of the Canada Corporations Act: The Federal Not-for-Profit Framework Law. After releasing this document, the department held a series of round tables in cities across the country to look at the ideas in the document and consider various legislative options. The government then made concrete proposals to reform the not-for-profit corporations legislation.

On November 15, 2004, the Liberal government introduced Bill C-21, which never reached second reading. On June 13, 2008, during the second session of the 39th Parliament, the Conservative government introduced Bill C-62, which was similar to what the Liberals had tabled. With the hasty election call last September, this bill died on the order paper. On December 3, 2008, a similar bill was introduced for first reading by the Minister of State (Small Business and Tourism). Once again, it died on the order paper when Parliament was prorogued on December 4. Finally, the Conservative minister introduced the same legislation on January 28 as Bill C-4.

Since 2004, both Liberal and Conservative governments introduced various bills that all died on the order paper. In spite of everything, it is quite clear that there is a common desire on both sides of the House to modernize the Canada Corporations Act, especially since the bills introduced by previous governments have all been very similar.

To briefly summarize Bill C-4, its primary aim is to propose new legislation on not-for-profit corporations that would establish a more modern and transparent framework for such organizations. The operational framework for not-for-profit corporations would be similar to corporate governance under the Canada Business Corporations Act. The new act would gradually repeal the Canada Corporations Act and would replace parts II, III and IV of that act.

According to the minister herself, Bill C-4 will cut administrative costs facing not-for-profit corporations and will strengthen and clarify the governance rules that apply to these corporations. In more concrete terms, this bill will simplify the incorporation of not-for-profit corporations; clarify the rights and responsibilities of directors; establish defences for directors and officers in the event of liability; provide members with increased rights to contribute to the governance of their corporation; and establish a better mechanism to oversee the corporations' accounts.

Although the bill is complex, the new framework that will govern not-for-profit corporations should considerably simplify and clarify the role of these corporations in our society, both for their members and directors and for the general public.

It is exceedingly clear that extensive changes must be made to the Canada Corporations Act. For that reason, the Bloc Québécois is in favour of the principle underlying the bill. However, it is evident that some aspects of the bill must be examined in committee.

The Bloc Québécois supports this bill for a number of reasons. First of all, the process for establishing a not-for-profit will be considerably streamlined and much more transparent.

The act currently requires not-for-profit corporations to keep detailed accounts of their activities but does not require disclosure of these accounts. Bill C-4 requires not-for-profits to make their financial records available to their members, directors and officers, as well as to the Director. This will permit directors and officers to better manage and supervise the corporation, to monitor the financial situation of the organization between annual meetings and to ensure that funds are used only in the pursuit of the stated goals and objectives.

The bill also includes a provision to ensure a fair balance between transparency and accountability on one hand and privacy on the other. An organization can apply to the Director for an exemption from disclosing its accounts to its members.

The Canada Corporations Act currently allows anyone to obtain the membership list of a not-for-profit organization. The act sets out the possible uses of such a list. Bill C-4, Canada Not-for-profit Corporations Act, will give this right only to the organization's members, creditors and directors.

This provision will facilitate communication among members and enable them to better coordinate their activities; it will require administrators to maintain an up-to-date membership list, thereby further facilitating logistics and administration; and it will protect the members of certain types of not-for-profit organizations from the unauthorized use of such lists. The same provisions were included in the Canada Corporations Act to punish such offences. The problem would be resolved at the source by not making such lists public. Any person wishing to consult the list would have to sign a statutory declaration limiting the ways in which the list is to be used. The bill also calls for a fine of up to $25,000 or up to six months in prison or both for anyone using a list for unauthorized purposes. This reminds us of the CRTC's do not call list. We know that such lists have been sold for about $50 for 6,000 names. People wanted their names on the CRTC list because they did not want to be bothered by telemarketers. This provision would compensate for the cost of updating the lists by removing the requirement to make them available to the general public.

Directors and officers of not-for-profit organizations are currently exposed to numerous liabilities under the provisions of certain pieces of legislation including liability for environmental damages, liability for unpaid salaries, fiduciary duty, and liability for their own negligent actions. They should be relieved of those liabilities. Thus, the new legislation addresses the liabilities of not-for-profit directors.

Incorporation creates a legal entity that can be held liable. The organization will protect these people from personal liability when acting according to their responsibilities as defined in the legislation.

That is covered in subsection 37(1).

The bill includes a clear definition of the standards for diligence that do not hold a director liable if he or she has acted honestly and in good faith with a view to the best interests of the corporation.

That is covered in subsection 149(1)

Directors may use the defence of reasonable diligence, which gives them a remedy against unfounded complaints.

This is found in clause 150.1.

There are new provisions to indemnify directors against costs, charges and expenses incurred in respect of an unfounded proceeding or of incidents where the corporation believes the director's actions warrant indemnification.

These provisions are found in clauses 151.1 and 151.5.

The problem with this sort of provision is that highly qualified officers who know the system well might exonerate themselves by invoking the due diligence defence and thus make the members of the organization pay collectively for their errors.

With regard to efficiency, replacing the letters patent system, involving a sort of order signed by the minister, with an as of right system of incorporation makes it much easier to set up not-for-profit organizations. First, the discretionary approval process would disappear and the incorporation process would be simplified, giving corporations greater flexibility. This process would also be more efficient and less expensive, both for corporations and for the government.

Second, eliminating the obligation to have by-laws approved gives corporations the flexibility to create by-laws to meet their particular needs. It is high time the minister's discretionary authority in this area was abolished. This will increase not only the credibility of not-for-profit organizations, but public confidence in them.

I would also like to take this opportunity to point out the main issues the Bloc Québécois and many representatives of not-for-profit organizations have with Bill C-4 and the Canada Corporations Act. The Canada Corporations Act currently includes a classification system for not-for-profit organizations. The bill still does not include any mechanisms to correct this situation.

For the government, the new act does not need a classification system because the framework is permissive and flexible, allowing organizations to choose how to apply many provisions.

However, according to the national charities and not-for-profit law section of the Canadian Bar Association, not including a general classification system is a major flaw in this bill. It then becomes important to specify if the not-for-profit organization is charitable, mutualist, political or even religious, because they would be different. I am only trying to highlight various distinctions, but we believe that the committee should tackle this issue.

As well, section 154 of the Canada Corporations Act currently stipulates that the federal minister may grant a charter of incorporation if the corporation thereby created pursues objects “to which the legislative authority of the Parliament of Canada extends, of a national, patriotic, religious, philanthropic, charitable, scientific, artistic, social, professional or sporting character, or the like objects.”

But it appears that the proposed new legislation would not require a not-for-profit organization to include in its statutes the objects it intends to pursue, thus sidestepping the whole notion of specifying what action an organization can take in accordance with its goals.

Since we know that the federal Parliament only has jurisdiction over organizations that do not have provincial goals, this raises the following question: Why does the bill not include some provision to oversee what falls under federal jurisdiction? The Bloc Québécois feels that this question should be studied in committee.

These are legitimate issues that the Bloc Québécois is trying to defend.

Under section 92 of the Constitution, managing the social economy, volunteering and community activities falls within provincial jurisdiction. As set out in that section, all matters of a merely local or private nature fall under Quebec's exclusive jurisdiction.

I repeat; it is important to note that the federal Parliament has jurisdiction over only those organizations that do not pursue provincial objects. Section 92, subsection 11 of the Constitution Act, 1867 grants the incorporation of companies with provincial objects specifically to the provinces.

Accordingly, there seems to be a serious flaw in the bill and it must be carefully examined to avoid any potential conflict between the provinces and the federal government. The bill must be amended to limit its application to not-for-profit corporations that operate in several provinces, that have offices in several provinces or whose object comes under federal jurisdiction.

Adding these limitations is not mandatory per se. Constitutionally, the federal government does not have the authority to legislate in areas of Quebec jurisdiction. However, to avoid any confusion that could arise from the new wording of the legislation, it would be wise to include provisions limiting the scope of its application.

At the beginning of my speech, I said that, for some time now, representatives of not-for-profit corporations have been calling for amendments to bring the Canada Corporations Act up to date. For reasons of transparency, efficiency and fairness, the Bloc Québécois believes that these amendments are legitimate and essential. However, certain points need to be clarified in committee.

Whether on matters of classification or the jurisdictions of each level of government, we believe that the committee must provide clear answers. The representatives of not-for-profit corporations deserve to be able to work with a Canada Corporations Act that effectively meets their needs.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the previous questioner lamented that the bill was very long and had a lot of details that gave him some concern.

The bill does cover a lot of different things and it does provide a comprehensive view of some of the important provisos that will be necessary to ensure the integrity of the not-for-profit sector.

The area I want to comment on is with regard to the coming into force of the regulations. The member may want to comment on this. The bill has a substantial section on the regulations. One of the regulation provisos indicates that the governor in council, basically the cabinet, can establish regulations. It gives cabinet the power to define certain terms used in the bill but they are not defined in the bill, which I find very unusual.

The bill provides substantive latitude and causes me a bit of concern with regard to the facility to be able to change the scope of legislation through regulation rather than through the legislation itself. In normal cases, regulations are enabled by the legislation itself. I raise this from the standpoint that I hope the committee will look at the extensive provisions allowing for regulations to be put forward. In my own view, they appear to be fairly broad and sweeping and there may be items here that should be incorporated into the legislation as it exists rather than at some other time at the discretion of cabinet.

[Robert Vincent, Bloc, Shefford, QC]

Mr. Speaker, I thank my colleague for his question. He is absolutely right to raise these points because, when examining the provisions of the act, the committee will have to study 20 points.

In addition, he is perfectly right to say that the latitude of the governor in council is too great with respect to this bill.

When the bill is studied in committee, we will make some recommendations to the government. Therefore, I believe that the government should bend to stakeholders.

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

Mr. Speaker, I wish to congratulate my colleague from Shefford for his presentation, which has given us a solid understanding of the bill's intent. A Liberal colleague mentioned earlier that the bill was tabled about ten years ago but never adopted. My colleague raised the fact that the bill in question applies to organizations with a national, patriotic, religious or other purpose. They may be of all sorts. However, the bill does not require these organizations to reveal their reason for being.

It is somewhat illogical for a bill to define the objects of these organizations but then to not require the organization to state the reason for incorporation. We come across inconsistencies and duplication in Quebec's and Canada's jurisdictions all the time. In our ridings, not-for-profits are mostly local organizations. Thus, it is quite rare to find organizations working in several provinces or throughout Canada.

I wonder if my colleague examined this issue. Does he see that it is very important to clarify this bill?

[Robert Vincent, Bloc, Shefford, QC]

Mr. Speaker, I would like to thank my colleague from Alfred-Pellan for his very pertinent question. He saw the relevance of this file and of Bill C-4, which is no minor bill. Not-for-profit organizations have asked us to change and amend many points for the past 10 years because the current legislation no longer meets their needs. It must be updated. Today's reality is not the same as yesterday's.

My colleague is wondering if every point and type of organization must have a concrete goal and definition, be it in terms of heritage, sports or something else. These goals must be consolidated so that we are not all over the map as we have been and as we continue to be because the legislation has not been amended. I can assure my colleague from Alfred-Pellan that we will study his point carefully and specifically in committee.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, I would first like to thank my colleague from the Bloc Québécois for his speech about Bill C-4. I have a question to ask him about the future of not-for-profit organizations. Clearly, in this economic crisis, the voluntary sector must overcome many difficulties in order to survive and grow.

I would simply like to know if the bill would strengthen the voluntary sector or if it would hold the sector back in terms of reaching its important goals. This is very important, especially in the current political climate. The voluntary sector has been dealt many blows by the Conservative government. It is critical that we have some ways of strengthening this sector.

[Robert Vincent, Bloc, Shefford, QC]

Mr. Speaker, I thank my hon. colleague from the NDP. She is quite right. This bill will help the voluntary sector. Part of this bill provides greater protection for directors. In the past, directors were not keen on the idea of being held liable for the organization. New measures would make them a little less liable and would help them defend themselves. These measures did not exist in the past and, as a result, some volunteers did not want to take on the role of director or chair of these organizations.

Furthermore, many members complained that they did not have enough information. They did not know how the organization spent its money. With this bill, people will know what organizations goals are and how the money is being spent. The names of the people who work for the organization will also be protected. They will not be disclosed right and left. I believe that amending this bill will encourage many more volunteers to become involved.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, I would like to suggest also for the member from the NDP that this bill will allow not-for-profit organizations to become more transparent and more accountable. This will feed out to the people in our communities who support non-profit organizations with their donations and assistance and as such, this bill will allow Canadians to have more confidence in non-profit organizations.

Does the member think that the increased accountability and transparency would serve to make organizations stronger by building more confidence in the people in our society who would support them?

[Robert Vincent, Bloc, Shefford, QC]

Mr. Speaker, my hon. colleague is quite right, and that is what I was saying to my hon. colleague from the NDP.

Strengthening the act in this way will give volunteers greater confidence in the organization, because it will also tighten up the rules and procedures.

People will not feel constrained by these organizations. Some people said that not-for-profit organizations were not accountable to their members. Now, because this act will ensure greater transparency, once a month or on a quarterly basis, members will be able to consult all the books, statements of accounts, expenses and payrolls. This transparency will satisfy all volunteers. Volunteers will therefore have greater confidence in these organizations.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I am very pleased to speak to second reading of Bill C-4, which deals with not-for-profit organizations. I would note first that the bill first surfaced in the House in 2004 under the then Liberal government. It was never dealt with and it came back as Bill C-262 in 2008 and here it is again. It has been about five years that the bill in various forms has been before the House of Commons.

I want to begin by speaking about the not-for-profit sector. I am very fortunate to represent a riding, Vancouver East, that has a whole diversity of absolutely incredible and amazing not-for-profit organizations, some of which would be under these federal regulations. They perform the most valuable service not only in our local community but nationally.

As we debate the bill we need to pay tribute and acknowledge the incredible value that the not-for-profit sector provides in this country. There has been a very long history in Canada of not-for-profit work. Whether it is in housing, cooperatives, delivery of services, volunteer work, or advocacy, there is a tremendous history in this country of voluntary organizations where people give their all and are literally on the front line delivering services and providing information to the citizens of Canada in many diverse communities.

It is very important for parliamentarians to recognize that if we ever put a price tag on the work that is being done in the voluntary sector we would be talking about billions of dollars. Certainly if these services and programs were being delivered directly by government, we would be talking about billions of dollars. We should recognize that the work that is done by not-for-profits in our communities is something that we benefit from. It is part of a strong civil society. It is part of a strong democratic society. Over the years the biggest struggle and challenge that not-for-profits have had is the struggle to stay in existence, not from a legal point of view, but from a financial point of view. Government funding has been withdrawn and we have seen government programs cut back, federally and provincially, and sometimes even locally, although most often it has been the local government that has had to pick up the slack.

The not-for-profit sector and our non-profit organizations have had to rely more and more on voluntary contributions and donations. They are always scrambling for money. The biggest issue facing the voluntary sector is not 170 pages of Robert's Rules of Order and a regime of putting everyone under one size fits all, it is the question of stable long-term funding. Long gone are the days when non-profit organizations could rely on core funding to continue with their core operations and then expand to whatever programs they were doing. Now every organization, I dare to say, spends probably one-quarter or more of its time writing grant applications, chasing down every small bit of money that they can in order to develop their programs.

In my riding of Vancouver East there are organizations that are literally on the front line. They are literally dealing with life and death situations. These organizations are democratic. They are transparent. Everything that they do is out there for people to see and to become involved in.

In looking at the bill, I have some very serious questions as to why we are so focused on a regulatory regime for not-for-profits when we are completely missing the point of what is the real crux of the issue for non-profits in this country. The NDP, in going through this 170 page bill clause by clause and looking at the incredibly detailed micromanagement requirements that are in there, these organizations will now have to go through various hoops and there are processes and regulations involving a lot of paperwork and reporting requirements. It is absolutely incredible. It is 170 pages of things they have to note and make sure are followed up.

I certainly have a concern that the bill in its current form will make it very difficult to attract new directors and volunteers in the not-for-profit sector. Anybody faced with this massive regulation would say, “I came here to do good work. I came here to make a contribution to my community. I came here to make good decisions. I came here to help people,” and all of a sudden that person is faced with having to deal with a massive bureaucratic regime, where one size fits all right across the country.

We have to seriously question whether or not the bill, if it is adopted in its current form, would have a counter-effect. Maybe it is being put forward from the point of view of transparency and accountability, but it may have the effect of turning people right off and asking why on earth they would get involved in doing this work when there are so many requirements and responsibilities.

I listened to the Conservative member say that the bill is about being transparent and more accountable. That leads one to believe that the status quo is not transparent and is not accountable. There are non-profit organizations that run into trouble. Any group in society from time to time may face difficulties. There are sometimes instances where there are criminal activities taking place. There are all kinds of legislation, measures and protections to deal with that, but the sense that somehow not-for-profit organizations are not transparent and accountable is a very false premise. I certainly want to put that to rest.

Another concern that we have about the bill is that it does not address the relationship between charity status, Revenue Canada and the issue of advocacy. This has been a long-standing debate. There are organizations that are very concerned about the severe limits that are put on them to do advocacy work. Somehow advocacy has become a negative word. It has become a negative component to the work that is done. However, what I see in my community is that the advocacy work, which does not mean that it is partisan, to uphold people's rights, whether it is in legal aid, housing or groups that have been very marginalized, is very important for the not-for-profit sector. This issue has not been dealt with at all.

Mr. Speaker, I see that you are getting up to tell me that the time is up and we are going to statements, so I will continue my remarks after question period.

[The Speaker, Liberal, Peter Milliken]

I want to thank the hon. member for Vancouver East. There will be 12 minutes remaining in the time allotted for her remarks when debate resumes on this matter. It is now time to proceed with statements by members.

The House resumed from February 6, 2009 consideration of the motion that Bill C-4, An Act respecting not-for-profit corporations and certain other corporations, be read the second time and referred to a committee.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Madam Speaker, for several years, a number of representatives of not-for-profit corporations have been pressing to have the Canada Corporations Act modernized. In the past decade, numerous people have taken part in consultations, while others have made written submissions to Industry Canada calling for amendments to the Canada Corporations Act.

Since 2002, both Liberal and Conservative governments have tried introducing various bills, but they all died on the order paper. In spite of everything, it is quite clear that there is a common desire on both sides of the House to modernize the Canada Corporations Act, especially since the bills introduced by previous governments have all been very similar.

To briefly summarize Bill C-4, its primary aim is to propose new legislation on not-for-profit corporations that would establish a more modern and transparent framework for such organizations. The operational framework for not-for-profit corporations would be similar to corporate governance under the Canada Business Corporations Act. The new act would gradually repeal the Canada Corporations Act and would replace parts II, III and IV of that act. Although the bill is complex, the new framework that will govern not-for-profit corporations should considerably simplify and clarify the role of these corporations in our society, both for their members and directors and for the general public.

It is exceedingly clear that extensive changes must be made to the Canada Corporations Act. For that reason, the Bloc Québécois is in favour of the principle underlying the bill. However, it is evident that some aspects of the bill must be examined in committee.

The Bloc Québécois supports this bill for a number of reasons. First of all, the process for establishing a not-for-profit will be considerably streamlined and much more transparent. The act currently requires not-for-profit corporations to keep detailed accounts of their activities but does not require disclosure of these accounts. Bill C-4 requires not-for-profits to make their financial records available to their members, directors and officers, as well as to the Director.

This will permit directors and officers to better manage and supervise the corporation, and allow members to monitor the financial situation of the organization between annual meetings and ensure that funds are used only in the pursuit of the stated goals and objectives.

With regard to efficiency, replacing the letters patent system, involving a sort of order signed by the minister, with an as of right system of incorporation makes it much easier to set up not-for-profit organizations. First, the discretionary approval process would disappear and the incorporation process would be simplified, giving corporations greater flexibility. This process would also be more efficient and less expensive, both for corporations and for the government.

Second, eliminating the obligation to have by-laws approved gives corporations the flexibility to create by-laws to meet their particular needs. It is high time the minister's discretionary authority in this area was abolished. This will increase not only the credibility of not-for-profit organizations, but public confidence in them.

I would also like to take this opportunity to point out the main issues the Bloc Québécois and many representatives of not-for-profit organizations have with Bill C-4. Currently, the Canada Corporations Act does not have a classification system for NPOs. Bill C-4 does not contain a mechanism to change that.

In the government's view, the new act does not need a classification system because the framework is permissive and flexible, allowing organizations to choose how to apply many provisions.

However, according to the national charities and not-for-profit law section of the Canadian Bar Association, not including a general classification system is a major flaw in this bill. It then becomes important to specify if the not-for-profit organization is charitable, mutualist, political or even religious, because they would be different. I am only trying to highlight various distinctions, but we believe that the committee should tackle this issue.

As well, section 154 of the Canada Corporations Act currently stipulates that the federal minister may grant a charter of incorporation if the corporation thereby created pursues objects “to which the legislative authority of the Parliament of Canada extends, of a national, patriotic, religious, philanthropic, charitable, scientific, artistic, social, professional or sporting character, or the like objects.”

It seems that clause 4 of the new legislation would not require a not-for-profit organization to include in its statutes the objects it intends to pursue, thus sidestepping the whole notion of specifying what action an organization can take in accordance with its goals. Since we know that the federal Parliament has jurisdiction only over organizations that do not have provincial goals, this raises the following question: Why does the bill not include some provision to oversee what falls under federal jurisdiction? The Bloc Québécois feels that this question should be studied in committee as well.

These are legitimate issues that the Bloc Québécois is trying to defend. Under section 92 of the Constitution, managing the social economy, volunteering and community activities falls within provincial jurisdiction. As set out in that section, all matters of a “merely local or private nature” fall under Quebec's exclusive jurisdiction.

It is important to note that the federal Parliament has jurisdiction only over those organizations not pursuing provincial objects. Subsection 92(11) of the Constitution Act, 1867, grants the “incorporation of companies with provincial objects” specifically to the provinces.

Accordingly, there seems to be a serious flaw in the bill and it must be carefully examined to avoid any potential conflict between the provinces and the federal government.

At the beginning of my speech, I said that, for some time now, representatives of not-for-profit corporations have been calling for amendments to bring the Canada Corporations Act up to date. For reasons of transparency, efficiency and fairness, the Bloc Québécois believes that these amendments are legitimate and essential. However, certain points need to be clarified in committee. Whether on matters of classification or the jurisdictions of each level of government, we believe that the committee must provide clear answers.

[Serge Cardin, Bloc, Sherbrooke, QC]

Madam Speaker, despite the clarity of my colleague's presentation, I would still like to ask a question.

With respect to developing regulations, the possibilities are wide-ranging, given that there really is no classification within not-for-profit organizations. Conflicts can arise concerning the goals of not-for-profit organizations because, as my colleague said earlier, there are corporations that are charitable and there are others that are mutualist.

Basically, the goal of charitable organizations is to provide services to people other than members and administrators, whereas mutualist organizations provide services directly to members. At some point there must be a regulation or a classification that would change how the act is applied in different situations. The Canadian Bar Association has also expressed its views, and it is important that this go back to committee so that it can be discussed.

I would like to hear my colleague's thoughts on this, since he sits on the Standing Committee on Industry, Science and Technology. How does he feel that we should proceed?

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Madam Speaker, my colleague from Sherbrooke is absolutely correct. We feel that the issue of classification is a flaw in Bill C-4. And so we need to clarify this aspect of the bill. As my colleague mentioned, the Canadian Bar Association has raised this issue and sees it as a flaw.

The Bloc Québécois wants to debate the issue of classification and improve this part of the bill.

[Serge Cardin, Bloc, Sherbrooke, QC]

Madam Speaker, as you can see, I am enjoying this dialogue with my colleague through you.

I imagine that there have been a number of not-for-profit organizations in his riding with all kinds of situations at various points in time. The new legislation says that there can be a member on the board of directors, and other organizations can have several if they solicit funds.

I was once an accountant, and I sometimes encountered not-for-profit organizations that had one person in charge of absolutely everything, including solicitation and the investment of funds collected from donors.

I would say that, in some cases, it was relatively easy for organizations to get their certificates under the Canada Corporations Act. In many cases, they did not act in accordance with their stated objectives and sometimes even abused them. We have to consider the importance of protecting the public and the community in terms of assets because there are often tax breaks associated with that.

I would like to ask my colleague a question. In general, even if the bill seems to meet organizations' expectations and appears to have received unanimous support in nearly every respect, without regulations governing classification, how are unclassified organizations supposed to operate, and what will the minister's responsibilities be when giving these organizations a certificate?

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Madam Speaker, in a former life, I also worked with not-for-profit organizations, because for several years I was recreation director for the City of Chicoutimi. I can say that I saw many organizations where, as the member mentioned, one member had control over a corporation.

Bill C-4 is designed to modernize the legislation. The current legislation is out of date, and I believe there is a need for transparency in the operation of an organization and with regard to its membership. Organizations must also be accountable to the people when they solicit funds from them. There is also a need for transparency with regard to the people. I believe that Bill C-4 will be an improvement.

[Serge Cardin, Bloc, Sherbrooke, QC]

Madam Speaker, things come in threes, as the saying goes. I have seldom had occasion to address questions and comments to my colleague three times in a row. This third time proves that I enjoy talking to my colleague, through the Chair, of course.

It appears that at some point the committee will hold a lengthy period of consultations on this bill. Can my colleague tell us whether a series of consultations has already been planned? A number of round table discussions were held to draft this bill. Will the consultations take place in committee only, or will there be other consultations on Bill C-4?

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Madam Speaker, I must tell my colleague that I cannot answer that question. However, I believe it will be necessary to hold extensive consultations in order to understand the whole issue of not-for-profit corporations. I will take his question to the committee and make sure that we hear a great many people, in order to get an overview of this issue.

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, it is a pleasure to speak to Bill C-4. It is an important bill for a couple of reasons, but it really shows how the government has missed the mark, especially for the not-for-profit and charitable sector.

At a time when charitable donations have gone down, the government has reduced what people get back in terms of giving. It has not adjusted the formula properly. Over the last number of years a lower tax rate has been applied and it has reduced the charitable money we get back from the government. In not having fixed that, it has taken money away from charities and from individuals who give to charities. The government has decided to bring forward a bill that is basically a legalization of Robert's Rules of Order at a time when charities are struggling to get by. I am not going to accept that. I am not going to accept the bill in its current form. The government needs to be told to clean up its act and do something for charities that are struggling.

Right now there is an economic meltdown. Many groups and organizations are suffering and trying hard to get by but some are actually closing their doors. The government is going to pass on incredible legal costs and also the costs of a whole process to those organizations. It is important to recognize that this started back in 2000. I remember going to the voluntary sector initiative outreach that was done in 2000. That was eight years ago.

My background is in the not-for-profit sector. I worked as a job developer at Community Living Mississauga. I worked at the Association For Persons With Physical Disabilities. I worked at the Multicultural Council of Windsor and Essex County. I have been a board director for the AIDS committee and board director for the Canadian National Institute for the Blind. I have been at the table and I know how complicated it is and how we need to improve some of the processes.

Accountability is important and some elements in the bill do that to some degree, but it is not the only thing that is in the bill.

We were asking quite clearly for new regulations with regard to charitable giving. We asked that volunteers be rewarded for their time. This is done in the United States where there is a tax writeoff for volunteering of time. We asked for the ability to give money back to people, as the Victorian Order of Nurses does in that it gives receipts for gas and volunteer hours.

What do we get from the government? We get a process that is going to further cause pain and suffering in those organizations which have to deal with it right now. There is no plan or assistance. That is the problem. That is why I am saying now is not the time to do this. The government should be told to go back to the drawing board and come back with something that has balance, bring back something that is going to provide the charities and the not-for-profit organizations the capabilities to fulfill the requirements of the bill without having to draw from their programs. That is what will happen, because they will have to retrain board members and staff to implement new administrative processes.

The technological age that has come about has made things even more complicated, through emails and a whole series of other initiatives which are also going to have some rules around them. All of that will have a cost to the organizations through their management systems, their computer systems and their processes. Where is the money going to come from for that?

Is the government going to come down hard on those organizations that will not be able to do that right away? Is it going to go through an audit and target different organizations that do not have the same capability as the large ones? That is important to recognize because not all organizations operate in the same way. I can understand the impetus and support the principles of trying to bring some accountability forward, which is important, but the Lions Clubs, the legions and many others are going to be pretty shocked and wonder if they are going to have to follow the same process as the Toronto Port Authority. That is not right and should not be done without providing any type of supports.

The government has had alternatives in the House. I had a private member's bill that would review the whole way charitable donations are treated. What I proposed is similar to a political donation; when money is given, there is a generous return. I have asked for the same thing, and for the charities to be capped at a certain level so it does not cost an exponential amount of money. People could get their return and the charities could move forward. When people give to a political party in this country, for example, $400, they get 75% of that back. If they give to the United Way, Scouts Canada, or the Victorian Order of Nurses they get a mere pittance back. I propose that we invert that so that those charities can have another revenue stream and ensure that the fiscal stimulus that happens in local communities goes to social organizations that are combatting the issues they are facing right now.

Some of the great organizations available to the public in my riding, such as the United Way, have to spend money from their reserves to support their current programs. They are going to be dealing with the consequences of a government that has put its head in the sand with regard to the economy for so many years and had this thrust upon them. The government has no plan. People are losing their homes. They have more social problems. They are experiencing greater stress in their lives. They will be turning to those organizations to get support. They will be turning to credit counselling. They will be turning to the Alzheimer's association to get assistance for their loved ones. They will be turning to all those groups to get the support they need.

Those groups will have to learn 170 pages of legislation and implement it at the time of greatest need in Canada. That is the wrong approach. The government should be told to go back to the drawing board and bring back some tools that would enable those agencies to deal with this change, put some money toward it and deal with the other issues that the voluntary sector initiative raised. Those elements were to strengthen those core organizations so that they would have the capability to plan for the future and expand their mandates in Canada in order to deal with new cases and problems in a fair way.

There are some elements in Bill C-4 that I do support. There are some good things, but they cannot be done alone. Once again, there were consultations in 2000, eight years ago. There were some talks and discussions by some groups back in 2002 and 2005. They were a more modest approach than the 2000 consultations which took place across Canada. However, those are years in the past and those consultations were done in a time that is totally different from today.

The government needs to start thinking about the organizations that are supporting the social economy. The social economy is significant in this country. Eight per cent of our GDP is tied to those groups and organizations that are helping people get by. They provide the services and programs that governments often turn their backs on because they do not want to fund them. People in our civil society decide that they are not going to put up with that and they form collective organizations to make a real social change, to make a difference. They fight back by creating an organization, choosing a board of directors and becoming incorporated. They start doing the charitable work that is so necessary for the people of their community, and in fact their country, because those organizations work together across many regions and provinces.

These organizations are going to have thrust upon them another cost, expense, process and procedure that is going to divert them from their necessary work. I think of some of the things that have happened just recently in my area. The Alzheimer Society just opened up a new facility in Windsor and Essex county. Sally Bennett Politidis is the chief executive officer. It is a great organization and has been able to open its doors and provide more respite care to assist a number of people who are not getting support from government programs. People are behind it. Lots of money has been donated.

The Alzheimer Society had a good campaign and has opened a beautiful new building that it is sustaining. Now, that organization is going to have to spend its time looking at a bill and deciding how it is going to change its operations to cope with this new set of rules when what it really needs is support from the government to sustain its operations. That is what should be happening.

There is absolutely nothing in the budget; the economic action plan, as it is referred to, did absolutely nothing for not-for-profit entities, not a single thing. Not only did it not support the traditional programs, such as child care, that we have been fighting for in Parliament, the government turned its back on every not-for-profit and charitable organization.

It has known about its actions and about clawing money back from Canadian taxpayers for the last number of years. The last number of budgets have reduced the bottom income for taxation. That is coupled with the rate of return one gets for charitable giving and that has shrunk over the years. It has gone in the reverse direction. I will concede that it is only a few dollars per person, but it is a symbolic gesture of a government that will not even address a simple issue and it turns its back on charities and other organizations. That is unacceptable.

Once again, I submitted a private member's bill. There have been other submissions, but my bill is about treating charitable donations similar to the way political donations are handled. I asked for unanimous consent for the bill to bill to pass and it was denied. It would have been an important one that could have been effective.

When I put the bill forward last year, parliamentary research came back and said that it would cost around $800 million to do it. I said we could phase it in over time, but at the time the government said that it was just too much money, that it could not afford $800 million of taxpayer money.

Ironically, that money would have gone to local communities because it would have gone toward donations of individuals. It would have been a tax return for people, a tax investment back to the social programs that we support in our community. Those charities and organizations would be able to track new donors. The number of donors is dwindling in Canada because people cannot afford it as much any more.

The government said that it was too much money at that time. Look at what it is doing right now with the billions of dollars going out to the banks and so forth. They seem to get their share, but there is no money for individuals who give to charities. There is no money to reward people who give to Scouts Canada or to hospitals and universities. They count as well. There is no money for people to decide how they want to help advance civil society.

Instead the Conservatives have come back to Parliament with an old retread bill that has been tabled a couple of times in the House of Commons, a bill that was widely consulted on eight years ago. Society was much different eight years ago than it is now. Now the government is going to ram it down our throats.

This is what the government is going to do for the not-for-profit sector this year. It has not included them in the economic stimulus package. It will reduce the amount that individuals can get back at tax time. It is also going to give them new Robert's Rules of Order so boards of directors, staff and all administrative components will need to be reviewed and evaluated. In addition, the organizations will probably require some legal advice on that, for which the government will not provide assistance.

That is not right. These organizations, such as the Big Brothers Big Sisters in my riding, need to be concentrating on ensuring people can continue to volunteer and support them.

They have two fronts with which to deal. They have a front where people do not have enough money right now to donate, and donations are slipping. They also have to deal with the fact that volunteers are drying up as well, and that is important to recognize. The volunteer initiative needs focus. The not-for-profit organizations said at the time that they wanted to stimulate their volunteers and reward them.

There are all kinds of things we could do. The United States gives a tax credit for that. There are all kinds of opportunities to do something for those individuals. Let us face it. A lot of Canadians now need one or two jobs, or they go back to school, even if they work right now. They have less time to give to those organizations.

This needs to be adjusted. We need to focus on some type of legislation that will facilitate that type of encouragement. I cannot believe the government would come forward with this bill without including some of those other initiatives. It has denied the other requests that were made and has brought in a new set of Robert's Rules of Order for the not-for-profit organizations. They are on their own.

Enough is enough. If this makes it to committee and we end up spending time on this, we will have to bring all the not-for-profit organizations to the table. We need to hear from them. We need to know what is happening in their industry. We will need to know how they are getting by right now. We need to know how they will implement the legislation, while not affecting a single penny of the revenues going to their programs.

It would be a shame if the Conservatives, supported by whomever here, would implement a bill at a time when these charities need our support. If passed as is, the bill will take money out of programming, because not-for-profit organizations will have to do more administrative procedures. This needs to be addressed. There needs to be a plan behind it. I have not heard that plan. I have listened to the government on this and I have not heard anything from the comments of the Conservatives to deal with that situation.

I do not think anybody in the House wants to go back to their communities right now and see money taken away that could go to programs right now or to updating facilities to deal with the financial and other implications and the stresses with our current economy.

My area has had 10% unemployment for the last number of years. We just finished our United Way campaign and it had to pull from the reserves. That traditionally is not the situation. With the downturn in the automotive sector and a number of different manufacturing sector losses over the years, we have lost great generosity from members, men and women, often in the CAW. Also our salaried employees give the most per capita in Canada.

However, we are having a problem now. The loss of those jobs has eliminated the donations, not only from the companies that used to donate, and some of which made large donations to the United Way, but also those individuals who used to be employed by them. That has dried up as well. The ones left are stuck with having to pull things together.

I congratulate the men and women of CAW Local 1973. Despite having their transmission plant close in 2010, they upped their donations and led the United Way. The men and women of the CAW came forward and gave more money than ever before, knowing they would lose their jobs.

They are not giving up on the charitable sector. Those individuals are saying that we have to more. What does the government do? Yes, it does more. It gives them a Robert's Rule of Order that will take away from those groups, and that is unacceptable. It could have put something in the budget. It could have attached something to the bill. Even if it did not want to put out cash or some type of stimulus for the agencies, it could have rewarded Canadians who give to charities. The government decided not to do that.

The government decided as well to not even reward the volunteer effort of Canadians, the thousands of hours that people give to charities, whether it be for the environment, for children, for seniors or for educational institutions, on all of those things it could have given some type of reward for individuals to show them that needed to get engaged in their communities and if they did, the government would reward them. It could have shown people that it recognized the fact that they needed to get more active in their communities.

That is what is happening in other parts of the world. There is a recognition that people need to come together stronger than before. The government could do some type of small initiative for that or at least throw a crumb, just do something. People are willing to continue to do these things, but they are under much greater stress. Once again, they are either working one or two jobs, or going back to school and retraining. All those things are happening right now.

I say no to Bill C-4. I want the government to go back to the drawing board and bring forward something that will be progressive and balanced for the charities and ensure that it will not cost any money for them. If the government is going to bring in something, it should at least acknowledge there is going to be a cost.

This side of the House recognizes that there is a responsibility on the government side to reward those Canadians who are giving their time or their money. Both are values that are important to recognize and they are values that strengthen our civil society. They help eliminate poverty, reduce crime, improve literacy and help people who are sick get better, whether one sits on the board of directors at a hospital, or on a board at a university or college or whether one is the person working the bingos at night. This is another industry that has been crushed because of the border issues. We have seen revenues dry up from that. People would go out and give their time, with late hours, just to ensure that a few dollars would come into the organizations.

We recognize there needs to be a partnership and the government needs to be there for them. Implementing a Robert's Rules of Order that will cost their administration time, money is irresponsible. They are also probably going to have to deal with some of the computers and other systems they run and to do so without any support. We want to see something brought forward that will meet the needs of Canadians, not-for-profits organizations and their charities, not attack them at this time.

[Alan Tonks, Liberal, York South—Weston, ON]

Madam Speaker, I listened to the member, and I know the House has a great deal of respect for the member, in particular for the subject matter on which he has spoken.

The Minister of State for Small Business and Tourism, and there is a great deal of respect for that secretariat as well, has brought in legislation on the Canada not-for-profit corporations act. From time to time, when we deal with the link between bureaucracy and the grassroots organizations in our communities, we are always cognizant of many of the points that the member has raised. I am quite taken when he says that volunteering represents the values that strengthen civil society.

This bill is going to committee. The member has already indicated that he has a private member's bill, and I know he has put a great deal of research into it. He has linked the bureaucratic regime and the capacity that is necessary for non-governmental organizations, NGOs, to meet the criteria embedded in this bill. Would he and his party be prepared to bring forward suggestions at committee that would alleviate the kind of stresses he has indicated, and I believe he is correct? The stress will be in excess of the capacity that non-governmental organizations in my riding already have. They are experiencing a huge amount of problems.

Would he be prepared to put forward suggestions to committee in order that the bill could come back and address some of the major concerns he has raised?

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, the member is right. There is an opportunity at committee to bring forth a number of different amendments. My concern is whether the government will have any interest to allow them. That is why I decided today to hold the line and send the Conservatives a message. We are extremely unhappy that they even initiated it without any thought or even a gesture of support for those organizations having to go through such a process. In fact, it will even be stressful for them to examine and analyze the bill to determine how their local organization will be affected and then to get a lobby going on the Hill to have a presentation to make changes.

I agree with the member. If this bill goes forward, I will propose a series of different amendments. This corner of the House will also demand extensive consultations with not-for-profit organizations to be inclusive of how they deal with the current climate.

However, my concern in general, even right now, is that as we move toward that process, it will be taxing on organizations. If this is passed, I need to ensure that my not-for-profit organizations get copies of the bill. I know they will have to go to their board members with it. If they are lucky enough to have a lawyer on their board, that member will have to examine it and get back to the board. They will have to focus on those things as opposed to what is important right now. Sometimes it is just outright survival. There are groups that are clinging on right now will not even have the opportunity to get involved in the lobbying. They will be too busy surviving and later on, they will have a surprise at the end of the day.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Madam Speaker, I am very pleased to hear from our member for Windsor West, and I fully endorse his comments on the bill. I, too, am very disturbed that the government did not choose to come forward with a much larger package.

Since becoming elected last October as a member of Parliament, I have had organization after organization approach me looking for assistance because of the bureaucracy and red tape the government has imposed on them. These organizations serve the disabled. One organization had been a charitable organization for 20 years, but it missed one filing deadline and had its charitable status taken away. We have organizations that serve the Latin American communities. These are groups of new Canadians that, instead of making a lot of money in Alberta like a many other people, are dedicating their time to volunteer organizations. They are being harassed by the red tape of CIDA because they missed one deadline. Organizations like Preserve Agricultural Land in Alberta was founded simply to tell people the value of preserving agricultural land and it was denied charitable status.

Would the member please address the bigger issue of how we deal with charitable status and enable people who help Canadians to raise funds?

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, that is important to recognize and I thank my colleague for the question because it touches upon a subject that I did not have time to address.

The bill further complicates the grassroots organizations that are trying to get together to form a social movement for education, literacy, anti-poverty, and a whole series of different initiatives. It could be agriculture, the preservation of land, or the environment. A number of groups that will try to get together will have further complications to do so under this bill and that is an issue.

It is important to contrast what we are seeing from the government with regard to not-for-profit organizations and charities versus the business sector, the government's pal. We know from the national survey of not-for-profit and voluntary organizations that 48% of organizations said they had difficulty obtaining funding from other organizations, including government. There is no surprise there. Some 20% said this problem was serious. The same proportion of organizations said that they had difficulty obtaining funding from individuals, although only 13% said this problem was serious. Finally, 42% of organizations said they had difficulty earning revenue. We know that is the current environment right now.

We have a budget that is going to be passed that does not do anything at all for not-for-profit organizations, not a single thing. It does not increase the amount of money people will get back nor does it provide any type of new supports or structures. The evidence is out there and in members ridings people know that they are losing organizations. They know that a number of them are being taxed when they try to get people information or actual work. Turning our back on the community is wrong right now.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, I too had the opportunity to work in the not-for-profit and charity sector for a number of years. I want to commend the hon. member for his speech and for bringing forward several of these issues. Maybe he could speak to what he has been able to discover, in the legislation and sledgehammer of bureaucracy in the budget, when trying to recruit new board members. We know how difficult it is to find volunteers. I would ask the member to explain the impact on all of these not-for-profit organizations and charities.

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, the question from my colleague is an important one right now.

Every not-for-profit organization spends a lot of time trying to recruit board members. Not-for-profit organizations need board members for a variety of reasons. They need people in accounting, they need lawyers, they need people who are connected to the community in different capacities to be able to raise funds. They need people who can deal with social policy. They want to make sure they have somebody who is going to be good with the people the organizations represent and being an advocate for their boards.

The organizations are now going to have to shift their vision to how they are going to educate their current board members under this 170-page document and how they are going to implement a strategy to shift it. It is going to require an extensive shift and a business operational plan. At the same time, they are going to have to recruit board members. It is going to be extremely confusing and more and more difficult to bring board members online, in my opinion, at this particular time because people are concerned with a lot of other issues right now.

It is actually a sledgehammer approach and one that is very much focused on the Robert's Rules of Order way of bringing that in. Our gift to charities this year is that they are getting more rules of order and more things to learn, and by the way, we are not going to help them with it. We are not going to provide them with new tax incentives. We are not going to reward their volunteers and we are not going to improve their facilities or provide some type of stimulus. We are going to let them do this on their own. I say, good luck.

By the way, if they want to lobby us, they should come to Ottawa because back in the year 2000 we did some consultation, eight years ago, and that will be our justifiable reason that we can do it on the Hill as opposed to what we should be doing, which is hearing from Canadians and their communities on how their charities are dealing with the current economic problems and how their communities are going to deal with cutbacks to services and the increased capacity necessary to deal with the social problems around a failing economy. That is what the government should be focused on.

The House resumed consideration of the motion that Bill C-4, An Act respecting not-for-profit corporations and certain other corporations, be read the second time and referred to a committee.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, I have the honour to speak on Bill C-4. I will begin by saying that the Bloc Québécois is in favour of this bill in principle—until there is evidence to the contrary, let me assure you.

The Canada Not-for-profit Corporations Act, as it stood before, was what you might call a bit behind the times. The time had come to modernize it. Introduction of this bill is a step in the right direction.

The new legislation will, of course, take into consideration the financial means and the size of the organization with respect to the implementation of its administrative mechanisms. The intent is to provide the organization with a more flexible framework for presentation of its financial statements, and also for setting up its bylaws. The intent also is to considerably improve the efficiency and transparency of the process of incorporation of not-for-profit corporations.

The system of letters patent will be replaced by an as-of-right system of incorporation, thus greatly facilitating the process. As well, the credibility of not-for-profit corporations in the public eye will be enhanced.

This bill will be referred to a committee. It will, however, perhaps become necessary to hold broader consultations, above and beyond the simple parliamentary committee framework with experts attending. We may also have to involve community organizations.

Let us examine the context per se of the creation of the Canada Not-for-profit Corporations Act. The present act comes under the Canada Corporations Act. The types of corporations governed by part II of the Canada Corporations Act include—as we know—corporations that are not-for-profit, but religious, charitable, political or mutualist in character, as well as others.

In recent years, many people have voiced concerns about the obsolete nature of the Canada Corporations Act, and the fact that its provisions no longer meet the requirements of the not-for-profit sector, the not-for-profit sector of today. A number of stakeholders therefore called for the act to be reformed and improvements made to the framework that regulates that sector.

Around July 2000, Industry Canada produced a consultation paper entitled “Reform of the Canada Corporations Act: The Federal Not-for-Profit Framework Law”. This led to the introduction of a bill that was first known as Bill C-21, which was introduced on November 14, 2004, by the Liberal government, but never made it past second reading.

On June 13, 2008, during the 39th Parliament, it was the Conservative government that introduced Bill C-62, but as we all know, an election was called, an election that I would describe as not only hasty, but even premature. When Parliament resumed on December 3, 2008, a similar bill was introduced by the Minister of State (Small Business and Tourism). Once again, because the House was prorogued, it was put off indefinitely.

Finally, in January 2009, Bill C-4 was introduced.

This bill has very clear objectives. It proposes a new Canada not-for-profit corporations act that would establish a more modern and transparent framework for such organizations. The operational framework for not-for-profit corporations would be much more similar to corporate governance under the Canada Business Corporations Act.

In more concrete terms, this bill will simplify the incorporation of not-for-profit corporations. It will also clarify the rights and responsibilities of boards and establish defences for officers and directors in the event of liability. It will also provide members with increased rights to participate in the governance of their corporation. Furthermore, it will establish a better mechanism for oversight of the corporation's accounts.

This bill seems to be relatively complex for some. It is divided into 20 parts in order to establish a new framework for not-for-profit organizations. The first thing, of course, is to identify the purpose of the bill, which is to incorporate corporations without share capital so that they may exercise their activities.

There is a definition of soliciting corporation. This term, of course, means any corporation that solicits public funding as well as any corporation that receives public donations or government grants.

The second part points out that the current letters patent system is being replaced with an as-of-right system.The director, after receiving and reviewing the required documents, can immediately issue a certificate of incorporation.

It also sets out the capacity of a corporation as a natural person. This section will have to be further developed because surely the related legal aspects and responsibilities are implied. Madam Speaker, we are both responsible for our actions. And so an organization will obviously be responsible for its actions, which will simultaneously protect the director, the board, the president and directors.

Of course, this would require that organizations keep accounting ledgers as well as a list of members and directors and make these documents available to members while still protecting privacy.

Allow me to digress for a moment. I am not going to go into detail about each of the 20 parts of this bill, but I must tell you that I was an accountant in another life. If I was not auditing, I was examining accounting ledgers, and if I was not doing that, I was preparing financial statements.

Unfortunately, I often found that certain organizations were led and controlled and that basically only one person participated in the organization. One person could solicit funds, collect them, use them and, unfortunately, sometimes use them for activities other than those that appeared in the charter at the time.

That needs to be mentioned.

We have to modernize the act so that similar situations do not arise again. Naturally, it gives them permission to borrow, to issue debt obligations and to invest as they wish. There are several technical aspects with respect to issuing debt obligations and the use of trust indentures. It outlines the role of the trustee if an organization were to be placed in receivership.

This bill also requires organizations to have at least one director or at least three in the case of a corporation that solicits funds. I am wondering about the element of responsibility. Sometimes I wonder how the act can state that there will be at least one director. That means that some organizations will have only one director. Does that also mean that there will be only one member? As I was explaining earlier, I am familiar with such cases. At least with this bill, if soliciting is involved, there must be three directors. Thus, public money donated by individuals has at least a chance of being used appropriately.

There is also a set of bylaws. The members must fulfill certain conditions. Thus, the bylaws set out the type of voting and the related voting rights. The voting procedure, the bylaws governing how members are to hold meetings, the calling of a meeting and quorum are all set out in the bill.

Another part talks about financial statements. It states that the organization must make available to its members the financial statements and any report submitted by its public accountant. It requires soliciting corporations to file a copy of their financial statements and public accountant's report with the director, who in turn makes them available to the public.

A multitude of non-profit organizations never submitted their financial statements, not even to members. With this bill, at least, the financial statements prepared by the public accountants will be forwarded to the corporation's director, who in turn will make them available to the public. That is a very important element.

The level of financial review required will be determined by the organization's revenues. For low-revenue organizations, a public accountant will conduct a review and submit a report. For medium-revenue organizations, if the board of directors so authorizes, the public accountant will review and report once again. For high-revenue organizations, the financial statements will have to be accompanied by an audit report. Here again, the reports will have to be submitted to the director of corporations, as I said earlier, and made available to the public.

The bill also refers to fundamental changes to what I will not call the charter, because that will no longer exist, but the organization of the not-for-profit corporation.

The bill includes provisions pertaining to proceedings to liquidate or dissolve a corporation. It also lists the powers a court can confer on an inspector who investigates a complaint filed by an interested person.

The bill contains provisions on offences. It also brings things up to date by allowing not-for-profit organizations to communicate with their members electronically. This bill therefore modernizes the legislation and allows for electronic equipment. That is something I wanted to mention.

Of course, there will be a three-year transition period for organizations to which part II of the Canada Corporations Act applies, which will now be recognized as corporations under the new legislation. There are some very important issues concerning this new bill, such as the fact that there is no classification system for NPOs in the Canada Corporations Act. Bill C-4 also does not include a classification system.

In the government's view, the new act does not need a classification system because the framework is permissive and flexible. Permissive can sometimes have a negative connotation. Nevertheless, this is a situation that exists within the new legislation because it is permissive and flexible and of course allows organizations to choose how to implement the relevant provisions. The accent is instead on the adoption of a set of rules intended to guide them in the conduct of their business, rather than imposing a system of rules they would be required to adhere to.

The fundamental concept underlying a classification system is that the corporations would be treated differently. Some would find themselves with more rules imposed on them by the State than others. As proposed here, most corporations would be treated in the same way and could enact various levels of regulation according to their requirements and the specific wishes of their members.

However, the opposite is true, according to the national charities and not-for-profit law section of the Canadian Bar Association. They feel that not including a general classification system is a major flaw in this bill. There is indeed a considerable difference between, for example, a charitable or benevolent organization and a mutualist one, which I will explain.

I am being told that I have two minutes left, so I will move along rapidly. Let us take the mutualist organizations. The resources of these organizations are directed toward the membership, whereas the resources of charitable organizations are directed toward an object, which may be very specific individuals other than the members. The act has provision for this. In these organizations, the money is not supposed to be used for the membership, but in some it may be, depending on the characteristics of the members and the object and vocation of the organization.

I am getting the sign that my time is very nearly up, but I would like to caution my colleagues with respect to one important aspect of this bill.

As far as respecting the jurisdiction of Quebec is concerned, at the present time section 154 of the Canada Corporations Act stipulates that the federal minister may grant a charter to a corporation if it carries on objects of a national, patriotic, religious, philanthropic, charitable, scientific, artistic, social, professional or sporting character, or the like.

It would appear, however, that clause 4 of the proposed legislation would not oblige the not-for-profit corporations to stipulate in their by-laws the object they intend to pursue.

It could happen that the objects chosen and determined by the corporation encroach on Quebec's areas of jurisdiction. There therefore needs to be provision for that situation in the act so that federal corporations do not encroach upon provincial areas of jurisdiction.

Let us therefore return this bill to the committee and carry out a thorough study of all the—

[The Acting Speaker, NDP, Denise Savoie]

The hon. member for Terrebonne—Blainville has the floor for questions and comments.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Madam Speaker, I thank my colleague from Sherbrooke for his explanations of Bill C-4. His activities in his previous life contributed a lot to his understanding of this bill.

I have a question for him. The minister introducing the bill would seem to be saying that the bill would promote transparency and require not-for-profit corporations to be accountable. I would ask my colleague to explain how this bill achieves the objective set by the minister.

[Serge Cardin, Bloc, Sherbrooke, QC]

Madam Speaker, I thank my colleague for her question.

In the past, the directors of many not-for-profit organizations and the organizations themselves have been prosecuted. As I said at the start of my remarks, an organization is like a natural person. It may be prosecuted for various reasons under a number of environmental or civil liability laws.

In the matter of transparency, reference was made to the public disclosure of financial statements and many other matters I did not mention, such as the protection of members' privacy and the fact that the list could not thus be made available to everyone. There is also the matter of due diligence by directors.

Directors are protected when they act appropriately. In some other organizations, this may not always be the case. Some directors do not always necessarily act appropriately and could be prosecuted. And so, some directors who are being prosecuted and have made errors will have their costs covered. In this regard, while there may be transparency and accountability, it is still not clear whether a person is hiding errors behind due diligence. In this situation, costs would be covered in the case of mismanagement.

So there are a number of points. It may seem relatively complex, but a degree of transparency can be obtained through this bill. As I said earlier, the bill must be returned to committee to have certain aspects refined and, possibly, to address concerns of legal counsel, who have serious questions about various aspects.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, as the hon. member is very knowledgeable in this area, I would like his opinion on how he thinks we can continue to recruit volunteers to not-for-profit boards and to charities when it seems that this legislation will make it more difficult?

[Serge Cardin, Bloc, Sherbrooke, QC]

Madam Speaker, I am not sure I understand what my colleague means when he says that the bill would make it more difficult. The Canada Corporations Act obviously had to be adjusted and modernized. In the old days, when people got their charter, they just turned around and went to work. They did not really have to produce any reports on the corporation itself. They had to report in a somewhat more regulated way when the corporation could issue charitable receipts.

According to my interpretation, not-for-profit organizations are not necessarily and automatically entitled to issue income tax receipts, even if they can raise money.

There are some nuances here, but I do not see anything in the bill that would make it any harder or easier for people to volunteer for not-for-profit organizations. I think volunteers are better protected than they used to be. Some things need to be cleared up, though, so they are not overprotected. People do accept a certain amount of responsibility. If they always exercise due diligence, if they do the right thing, they will no longer have to worry about being sued directly because it is clearer now with this bill that the corporation can be sued directly.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Madam Speaker, I have worked with non-profit organizations for 35 years so I know full well the contributions they make to Canadian society. What really troubles me is the increasing downloading by our federal and provincial governments on to the non-profit sector to deliver services that really should be delivered by government.

I will give a concrete example. The government gives money to the Mennonite Immigration Centre in Edmonton, which is appreciated, to assist immigrants who are settling into Edmonton but it does not give the organization money for temporary foreign workers.

Out of the goodness of their Mennonite hearts, they continue to help those workers as well, many of whom are being laid off and stranded because they cannot afford to move back to their countries.

Rather than tabling this bill, why does the government not bring some real initiatives to the committees that will help the voluntary sector that has been downloaded with responsibilities for environment and social causes across the country?

[Serge Cardin, Bloc, Sherbrooke, QC]

Madam Speaker, I agree with much of what my colleague from the NDP said. I think, though, that we can do both.

Not-for-profit organizations are capable of raising money and even going out and getting grants without necessarily spending too much time on administration. They spend more of their time providing services to people who need them. The government is modernizing the act precisely in order to encourage this.

We still need to add some positive elements to the mix. In addition, I think the hon. member is right when she says the government should do more to help people who volunteer. These organizations are often left on their own. Good people spend a lot of time and even some of their own money helping the disadvantaged and the less well-off in our society. However, if governments, whether federal, provincial, Quebec or even municipal, started paying people who give so much of their won time, their entire budgets would probably be thrown off kilter. Government should definitely help these organizations. But should it provide unlimited support? I do not think so. There should be targets, which are more beneficial in terms of the return to society.

I think, therefore, that not-for-profit organizations that solicit money from the public should be regulated and government should make an effort to ensure that volunteers are also “rewarded” and, most importantly, helped to provide services to the most disadvantaged.

[The Acting Speaker, NDP, Denise Savoie]

Order, please. It is my duty, pursuant Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Jeanne-Le Ber, Immigration and Refugee Board; the hon. member for Dartmouth—Cole Harbour, Employment Insurance.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, I first want to thank the hon. member for Niagara West—Glanbrook for sharing his desk with me. It makes my life a little easier to speak today.

I stand here today to speak to Bill C-4. It is important to note that I oppose this legislation, as do all New Democrats, as it appears today. We need to recognize the work that not-for-profit organizations and charities do. It is something that we all benefit from.

This legislation ensures that our country's not-for-profits and charities, organizations that look after our most vulnerable, help educate our children, support our seniors and help the disabled, will become bogged down with legislation rather than doing the work they are there to do.

Regulatory reform would be a minor improvement for the not-for-profit sector. This is certainly not its main priority. The bill only addresses one aspect of many that were raised during the voluntary sector initiative through consultations with not-for-profit organizations over the last decade. Special attention should also be paid to strengthening the privacy of members' information and lists and minimizing the regulatory burden imposed on not-for-profits by the copious amounts of legislation.

Canada's voluntary sector was not hoping for 170 pages of legislation of Robert's Rules of Order. Over years of consultations, this sector hoped there would be more important issues like securing stable, long term financing, clarifying and improving the charitable status process and advocacy needs that would be addressed.

I believe that if the government had been willing to spend as much time dealing with issues important to this sector as they have on regulating it, we could have had a stronger voluntary sector. This bill would tend to exclude lay people from starting or running not-for-profits.

I had the distinct honour and privilege of working for the United Way Centraide in Sudbury and district for five years. This year, with great volunteers like Jim Thompson, chair of the campaign, and Paul Gomirato, Abbas Homayed and Robert Keetch, just to name a few, and the staff, Michael Cullen, Vicky Lafond, Tiffany Sutton Taylor and others at that office, they raised a staggering $2.43 million this year. A huge congratulations needs to go out to the United Way of Sudbury because that $2.43 million is a new record. It is continuing to help fund programs in Sudbury. Over 60 programs were funded last year and I am sure it will be funding more programs in my community this year.

However, it is legislation like this that will inhibit the great work of organizations like the United Way Centraide in my riding. It would inhibit the great work of the YMCA in Sudbury and the efforts of John Schmitt, the executive director there. He, along with his staff, created a great program called “Building Strong Kids”. It identifies the programs that children need and puts them into those specific programs to ensure they get the services they need. They can do this thanks to the United Way and the work that the United Way board of directors can do through their its campaign chair and volunteers to offer services to people in my riding. By doing that, they are able to help thousands in my community, which is great news for us in Sudbury.

However, what is worrisome about this legislation is that it will take people away from doing what they are very good at doing, which is raising the funds my community needs. Once they are able to raise the funds, the money is put into these great programs. If we are bogged down in legislation and having to jump through loopholes and red tape, it will slow down the work that organizations like the United Way can do.

It would also inhibit the great work that the CNIB and Paul Belair, the executive director in Sudbury, are doing to help vision impaired people in my riding. I can keep going with Maison Vale Inco Hospice and Leo Therien; the Human League; the Red Cross; The Corner Clinic; Big Brothers Big Sisters; and Elizabeth Fry. All of those organizations are doing great work but there is some fear that legislation imposed by Bill C-4 will slow them down in doing what they are best at doing, and that is providing the services to the people in my riding.

This legislation would also inhibit the great work of the Social Planning Council of Sudbury. Janet Gasparini, its executive director, has provided great progress in providing reports on poverty reduction. We have done such a great job in Sudbury. We have identified the poverty reduction strategy. It has been endorsed by my Chamber of Commerce which is something I am very proud of. It has also been endorsed by the health unit. It has seen the importance of creating a poverty reduction strategy and the work we are putting forward into this through the not-for-profits and charities. Again, there is some fear that Bill C-4 would not help it address the needs it is talking about.

This legislation does nothing but provide a minor improvement in regulatory reform, but at a time when charities and not-for-profits need to focus on staying afloat in this economic downturn, they are being hit with new regulations. We have heard about the unfortunate layoffs at Xstrata over the last few days. This happened on Monday. Xstrata has been a great contributor to my community through the United Way, at the YMCA, and many other charitable organizations and many other not-for-profits. Its employees and the union, CAW Mine Mill, have actively been involved in the community.

The loss of 700 jobs in my community through Xstrata will actually inhibit the company and the union from providing the donations to many of these organizations that provide the services that they now will actually need. So, it is a Catch-22 in that sense, they are going to be using the services of the United Way and other organizations but at the same time these organizations are going to be struggling for dollars.

What does this mean for great organizations like the United Way and the YMCA? Regulations will not help recruit new board members. It will just scare them away from the copious amounts of legislation they must learn just to volunteer. One of the great things that the United Way does in Sudbury is it offers what is called a leadership development program. This program takes individuals between the ages of 18-29 and teaches them about the rules and regulations and about being a member on a board. We know that we need young people on more boards of directors across the country, especially in my riding. When we can train young people and give them the skills necessary to sit on a board of directors and become a member of a board of directors after one year, that is something we all should be embracing.

Right now this new legislation could inhibit this great program. It will actually have to reformat its whole way of teaching this legislation to its students. This program has done such a great job that it expanded into what we call community leaders on board. So now it is open to everyone of all ages within the community to get engaged in the voluntary sector, into not-for-profits, into charities to make sure that we have enough people, to ensure that the work that needs to be done in our community is getting done through the not-for-profit sector.

We have more regulations in this legislation for not-for-profits regarding transparency than is required by huge industry and big business. That is a shame. The increased regulatory requirements for not-for-profits are likely to result in higher costs for not-for-profits and the federal regulator alike. Despite assurances to the contrary, with no plan or assistance to help not-for-profits or charities in the bill, I do not see how we can continue to support this.

If this is now going to committee, it is important to look at what we can do to ensure we are actually going to make this a better bill. The legislation regarding not-for-profits and the charitable organizations right across the country needs to ensure that we can continue to help the most vulnerable, to help our seniors. But not-for-profits do more than just help our most vulnerable. I know our colleges and universities are not-for-profits. We have airport authorities that are not-for-profits, our Legions. We cannot let the same legislation guide an airport and then guide a Legion.

It is time that we oppose this legislation. We want to ensure that we put the right legislation in place to help these organizations in the future.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Madam Speaker, I too share the member's concerns given that we have had consultations across the country for several decades on what we need to do to support the voluntary sector.

We do not need more awards and more accolades for the voluntary sector. We need genuine programs that will support the sector, particularly now when we have this economic decline. We need new rules in place to enable corporations to get greater credit for charitable donations. We need to provide support to these non-profit corporations to get trained in dealing with directors' liability, and in fact assisting them to get directors' liability insurance. I am in favour of making directors liable, particularly major corporations.

I agree with my colleague across the way that to impose this kind of provision at a time when we are downloading more of our social and environmental programs on the non-profit sector will set a pall over people volunteering to be directors. I only just found out this afternoon that a well renowned North American organization, The Nature Conservancy, has laid off several hundred people. This is the main mechanism in North America to set aside the protection of lands.

We need to wake up and we need to be bringing these major issues to the table, not simply reforming an outdated corporations act.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, I agree wholeheartedly with what the member is saying.

As I mentioned earlier, I had the opportunity to be the executive director of the United Way in Sudbury for five years. Every time government programs or government funding was cut, the request to the United Way increased dramatically. There was a direct correlation. We always used to say that if the government only knew how this would impact the not-for-profit sector, when it makes these decisions, that we could move forward and make the positive changes it needed.

When I heard of Bill C-4, I truly was excited at the opportunity of knowing that we could make some great changes to help the organizations that are doing the work that is so important to so many of us. What ends up happening? We give them more regulation and more hoops to jump through, and that is not helping.

We recognize that we are in this economic downturn and we hear about stimulus packages and all of these great things, but ultimately the not-for-profit and charitable organizations are the ones that will be supporting the individuals who need the help the most during this downturn. What are we doing? We continue to handcuff them. That is not right. I say shame.

We need to move forward, make the right choices in this legislation, get some consultation from these organizations, and then present the bill to ensure that it moves us in the right direction.

[Niki Ashton, NDP, Churchill, MB]

Madam Speaker, I appreciate the member's personal connection with the non-profit sector and the wealth of experience he brings to the House as a member of Parliament representing his region. I am just wondering what his thoughts are in terms of the role that charities play and perhaps the increasing role that charities may have to play as governments seek to devolve some of the services they provide to not-for-profit actors or charitable actors.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, I can use a very clear example. A few years back my community, like many communities, had a homeless crisis. We had so many people on our streets that we did not have enough places for them to sleep. This was in direct relation to cutbacks from federal funding.

What we needed to do was we needed to find a solution to this. As a charity, we did not have access to $900,000 per year to solve the problem. My community was, at that time, raising about $1.6 million from the United Way. There were other charitable organizations raising funds. But if we pull from one to give to the other, other places will suffer. Do we choose seniors, do we choose children?

It is time that governments stop cutting and start looking at the best things we can do to help charitable organizations and not-for-profits. Ultimately, they are the organizations that are doing the work. They are the ones that are on the front lines.

If we continue to cut and cut at these organizations and at their core funding, they are no longer going to exist. The work that the not-for-profits and the charities do in our country is worth billions of dollars. If we actually take that away, then it is up to the government to pay for that.

Right now, we know that in this economic downturn we need to stimulate the economy. We are hearing about the numbers of people losing their jobs, and they are still losing their jobs without the stimulus package. We need to ensure that the charitable organizations are there to provide supports to these individuals.

Right now, if this legislation were to continue to move forward, we would continue to handcuff these charities and these not-for-profits with, again, legislation that would slowdown the process of getting them doing what they do so well, which is providing services to the individuals who live in our communities.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Madam Speaker, today we are talking about Bill C-4, An Act respecting not-for-profit corporations and certain other corporations. It is clear that, on the surface, this bill seems to be a good one. The Bloc Québécois will vote in favour of the principle underlying this bill.

I listened to the preceding comments. This bill provides a framework for organizations and helps them get organized. It updates an archaic law. Our community organizations need more money, but we do not recognize their true value any more than we do that of not-for-profit organizations. If every not-for-profit organization and every volunteer ceased operations or quit tomorrow, our society would crumble. They keep our social fabric intact. That is why it is a good idea to update the legislation governing them.

This bill is at second reading. I hope that it will get to the committee stage so that the members who are on committees can study it in great detail to ensure that, on the one hand, directors of not-for-profit organizations can enjoy a certain degree of flexibility and openness, and that, on the other hand, the administration of these organizations is transparent.

Bill C-4 modernizes the current Canada Corporations Act. It will consider the financial means and the size of the organization in determining management standards. As the minister said, it will also provide a flexible framework for financial reporting and the establishment of internal bylaws for the organizations it governs.

Not-for-profit organizations need to be more efficient and transparent. We also have to consider the fact that, when a not-for-profit organization asks the minister to be recognized as such, there is a great deal of discretionary power. It looks like this bill eliminates the minister's discretionary power, and that is something we really need.

There is a reason the new Bill C-4 was drafted. Over the past few years, many not-for-profit organizations, as well as the Canadian Bar Association, have examined the problems the archaic law created for not-for-profit organizations. They wanted legislation that was more consistent with the needs of modern not-for-profit organizations. They asked the government to rewrite the legislation, so now we have Bill C-4.

The goal of this bill, according to the minister, is to establish a more modern and transparent framework for these organizations. The operational framework for not-for-profit corporations would be similar to corporate governance under the Canada Business Corporations Act. That is not a bad thing. Quite often, having an archaic piece of legislation regarding not-for-profit organizations means that we have not listened to their requests and priorities.

In more concrete terms, this bill will simplify the incorporation of not-for-profit organizations; clarify the rights and responsibilities of directors, which is an excellent thing itself; and will establish defences for officers and directors in the event of liability. Today, directors, who are quite often also the employers in not-for-profit organizations, are subject to all sorts of grievances and to all sorts of laws that employees or suppliers can use to get them into serious trouble. It is good that they can have more solid defences.

The bill will provide members with increased rights to contribute to the governance of their organization. Perhaps the committee should focus more on this point. That would respond to the requests from some of my colleagues who have said that organizations and their members must have a little more power. The bill will establish a better mechanism to oversee the organization's accounts, leading to transparency.

However, and I would like to draw the House's attention to this point, according to the Canadian Constitution, management of the social economy, volunteerism and community activities fall under provincial jurisdiction. It is important to note that the federal government only has jurisdiction over organizations that do not have provincial purposes. The committee must examine this aspect in order to discern if this bill oversteps its area of jurisdiction and infringes on provincial jurisdictions, namely those of Quebec. At present, the section of the Canada Corporations Act states that the federal minister may grant a charter of incorporation if the corporation thereby created pursues objects of a national, patriotic, religious, philanthropic, charitable, scientific, artistic, social, professional or sporting character, or other. However, these activities must be under the authority of the Parliament of Canada.

We note that clause 4 of the new act does not require a non-profit to state its intended purpose in its articles of incorporation. Thus, it is important that the non-profit's purpose and specific mandate be clearly identified in its articles of incorporation in order to ascertain whether the organization is involved in the jurisdictions of Quebec or of other provinces. It is extremely important and the committee will have to examine that issue.

I am only going to discuss a few clauses of the bill, those that, in my mind, apply to the day-to-day operations of community organizations.

First, part 1 of the bill provides for the incorporation of organizations without share capital for the purposes of carrying on legal activities. That is what the current law permits; there is not much difference. It defines the concept of a soliciting organization as one that solicits funds from the public or a government or any organization that receives private donations or government grants. That is found in part 1.

Part 4 requires organizations to prepare and maintain accounting records. That is very important. I was saying earlier that this bill provides a clear framework for managing a non-profit organization.

Quite often, not-for-profit corporations that have been established for many years must suddenly hold an annual general meeting and change directors. Then the director wants to change certain aspects of the organization's mandate and objectives. The bill establishes a framework in which books must be kept, directors named, and membership lists made available. Thus, there is an obligation for transparency.

With this, transparency is mandatory. First of all, books must be kept, along with a list of the members and directors, and people must be able to access those documents. Quite often, in a not-for-profit corporation, such as an MS society, for example, people are overseen by directors who themselves have MS. Sooner or later, however, their strength will decline. The organization will have to change directors or will no longer have a director. Then what will happen?

The members of such organizations must be known, so that they can be called upon and consulted when it is time for someone else to take up the torch.

Part 5 permits organizations to borrow funds, issue debt obligations and make investments as they see fit. Some not-for-profit organizations have money for research and other purposes. For instance, if a fundraising event is organized for a spinal cord foundation and $200,000 is raised, can that foundation take that money and invest it in research? This gives them a guarantee. It opens a door for them. It gives them both transparency and freedom.

Part 9 stipulates that the organizations must have at least one director and, in the case of soliciting corporations, three directors. That is the minimum. That ensures honesty within the organization and also gives people who support the cause and give money to the organization much greater confidence in the directors. As a result, people will know that there is not just one individual who knows the books and could pocket the corporation's money.

The bill also clearly sets out the obligations of directors and organizations as well as the due diligence defence. I mentioned that earlier. Due diligence clearly states the duties, obligations and responsibilities of the general directors of a not-for-profit foundation or organization. It also gives them a safety net. At present, anyone could suddenly accuse directors of lining their pockets. Directors are not protected from that. And it could just as easily be either true or false. Imagine the ordeal those people have to go through if it is false. They cannot defend themselves; that opportunity does not exist. This measure will afford them a certain amount of security.

Directors and officers of NPOs are currently exposed to numerous liabilities under the provisions of certain pieces of legislation including liability for environmental damages, liability for unpaid salaries, fiduciary duty, and liability for their own negligent actions.

There are many kinds of not-for-profit organizations. Some of them demand huge numbers of hours, huge amounts of energy and listening skills from their volunteers, officers and directors. Quite often, these people are tired and are subject to all sorts of weaknesses and they can be subjected to all sorts of allegations.

Often they work with people who are ill, as well, so they need an established or set management framework for their own protection. As well, not-for-profit organizations cannot always afford lawyers to help or advise them in certain cases. A framework gives them some security.

Another extremely important aspect of this bill is part 10, which provides that an organization's by-laws must set out the conditions of membership. I am talking not just about all the rules for being a member of a not-for-profit organization, but also the rules for holding meetings of the membership.

As I said, often, these people work in difficult environments, and they are not as procedurally oriented as we are here in this House, so they need some guidance. They want to do everything they can, but they do not always have accountants or lawyers to help them. Part 10 lays some ground rules, which are good to have.

Part 11 provides that an organization must make its financial statements available to its members. This is extremely important. When organizations are transparent and open and make their books available, they are less likely to be criticized, and people often have questions about an organization's financial situation, whether there is money to carry on or invest, or simply what the organization is doing. It is only natural that organizations, especially NPOs, should disclose what they have.

In my opinion, part 12, which pertains to financial reviews, has to do with to confidence in the directors. Small not-for-profit organizations cannot afford to pay an auditor, so they will often work with accountants who provide their services free of charge as a way of giving to the organization. It is their way of helping the organization. Of course, large organizations like the United Way—which raises $8 million, $10 million, $15 million, $20 million or $100 million, I would imagine—must be audited, but their situation is different.

Part 14 describes the process for liquidation and dissolution of a corporation incorporated under this legislation. That is very important. Once, in my little corner of the world, in my region, a local organization had to close its doors when a regional organization took over. What is to be done in a situation like that? I should point out that not-for-profit organizations do not necessarily have the means, the physical resources, or the staff needed to liquidate or dissolve the corporation. This bill provides guidelines for that process.

Part 16 covers protection and security. It sets out the offences and penalties imposed in case of an infraction, particularly with respect to false and misleading statements and the misuse of information from a list of members or other register kept by the organization. Every NPO administrator must inform the organization's members, administrators or shareholders, as the case may be, of this provision. Members' names must not be given to other organizations, such as businesses, that might misuse them.

This bill is very important. The committee will have to examine this matter as well as the constitutional issue with respect to encroachment on provincial jurisdiction.

The committee will have to examine whether this bill provides enough flexibility and permissiveness to not-for-profit organizations to allow them to grow transparently and accountably in the best interest of the people who use the services.

[Don Davies, NDP, Vancouver Kingsway, BC]

Madam Speaker, one of the problems with this bill is that it does not make allowances for the size of the not-for-profit organization. In particular, although there are allowances for financial reporting, it does not make allowances for things like voting and the requirement to pass resolutions and record them and maintain membership lists. In other words our small local legions or not-for-profit anti-poverty groups will be forced to have the same bureaucratic requirements as the large not-for-profits, such as the United Way.

In my own constituency the local legions, including the one on Fraser Street of which I am a member, do an incredible job in our community. They give countless volunteer hours and support thousands of amateur athletes through their hard work and volunteerism.

They are having a tough time hanging on now. They need property tax relief. They need a refundable tax credit for their dues. What they do not need is more red tape and burdensome bureaucratic paperwork.

I would ask my hon. colleague to comment on this. I would also like her opinion on how the bill might impact the hard work, for example, of legions that are operating in tough times across this land.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Madam Speaker, I thank my colleague from the NDP.

His question touches on two aspects I have just spoken about. First of all, this bill is at the second reading stage and so will be referred to a committee. I trust that the hon. members in committee will be alert enough to look at the details and the irritants with a potential to be harmful to small not-for-profit organizations.

It is important to refer the bill to committee because there is no mention of classification. I concede the point made by my colleague from the NDP that there are indeed irritants that will be dreadful for the smaller organizations. What is more, the largest ones always end up with the money. In my opinion, this should be discussed in committee.

Finally, it is still a good thing, if only for the small ones, since the large ones will not benefit from the aspects and issues addressed by this bill. The small ones do not have the money and resources, nor the ability to acquire them. If we can clarify the framework within which they operate, that will be one step along the way. When it comes to looking for the money, we will introduce another bill and ask the Liberals to vote against the budget, and we will ask for funds for our organizations.

[Serge Cardin, Bloc, Sherbrooke, QC]

Madam Speaker, I would first like to congratulate my colleague for her heartfelt and relevant speech. I would like to ask her a question since she is very involved with these community organizations and not-for-profit organizations.

In July 2000, Industry Canada published a consultation document entitled “Reform of the Canada Corporations Act: The Federal Not-for-Profit Framework Law”. After releasing this document, the department held a series of round tables in cities across the country to look at the ideas in the document. And so Bill C-4 was born.

Given that she is involved with these community organizations, I would like to know if she was kept up-to-date on or knew if any round tables took place in her area. If so, does she know if the organizations were allowed to participate and bring their ideas to flesh out, in the most ideal way possible, this legislation that concerns them? And knowing this, does she think it would be relevant to not only have the bill studied in committee, but to also consult community organizations of all sizes, so that the bill would be adaptable to any situation?

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Mr. Speaker, I have not heard that the Government of Canada or Industry Canada came to consult not-for-profit organizations in Quebec. I do know that the former program that recognized not-for-profit organizations under the Liberal government was tossed aside by the Conservative government.

I do not believe that organizations in Quebec are very interested in this bill. First, they are used to coming under the Government of Quebec. They know they will go to the Government of Canada for a number so that they can issue income tax receipts. In Quebec, not-for-profit organizations will not turn directly to the federal government. As a result, they likely did not hear about these consultations. I am close to my organizations and I never heard about them either. Maybe there were consultations in the rest of Canada.

The way not-for-profit organizations are organized in Quebec is very different from the way they are organized in the rest of Canada. We are ahead of the curve and used to doing our own thing, coming under the Government of Quebec and not expecting anything from the federal government. It has never been present, except in the previous legislation where organizations could get a grant. It took three weeks to a month to fill out a 50-page application and get a grant of no more than $1,000 to $5,000.

In answer to my colleague's question, I do not recall any consultations in Quebec.

[The Deputy Speaker, Conservative, Andrew Scheer]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker, Conservative, Andrew Scheer]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[An hon. member]

On division.

[The Deputy Speaker, Conservative, Andrew Scheer]

I declare the motion carried. Accordingly, the bill stands referred to the Standing Committee on Industry, Science and Technology.

(Motion agreed to, bill read the second time and referred to a committee)