This bill was last introduced in the 40th Parliament, 2nd Session, which ended in December 2009.
This bill was previously introduced in the 40th Parliament, 1st Session.
Diane Ablonczy Conservative
This bill has received Royal Assent and is now law.
This is from the published bill.
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.
All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.
The House proceeded to the consideration of Bill C-4, An Act respecting not-for-profit corporations and certain other corporations, as reported (without amendment) from the committee.
The Acting Speaker Denise Savoie
There being no motions at report stage, the House will now proceed without debate to the putting of the question on the motion to concur in the bill at report stage.
Keith Ashfield Conservative Fredericton, NB
moved that Bill C-4, An Act respecting not-for-profit corporations and certain other corporations, be concurred in at report stage.
The Acting Speaker Denise Savoie
The question is on the motion. Is it the pleasure of the House to adopt the motion?
Some hon. members
Agreed.
Some hon. members
Agreed.
Gord Brown Conservative Leeds—Grenville, ON
Madam Speaker, I am pleased to have this opportunity to address the House on the third reading of Bill C-4, An Act respecting not-for-profit corporations and certain other corporations.
First of all, I would like to thank the chair, the member for Wellington—Halton Hills, and the rest of the Standing Committee on Industry, Science and Technology, the committee on which I sit, for the committee's hard work in the examination of this piece of legislation. The extensive bill we were required to study dealt with highly complex subject matter, and the time and the seriousness for which the committee approached the task are greatly appreciated.
I would also like to thank all those who appeared before the committee to make comments and suggestions. In studying this bill, the committee was able to draw on the collective expertise of these witnesses, which allowed it to improve the bill through a number of amendments based directly on their recommendations.
This bill, which was returned to the House by the committee, is an important step forward for the volunteer and not-for-profit sectors in Canada in terms of governance.
The corporations that will benefit from Bill C-4 touch on all aspects of our lives. Some are charitable organizations, others represent groups of individuals or companies or provide services for their members or for their communities regardless of their mission or size. All of these organizations will benefit from the provisions of the new Canada not-for-profit corporations act.
It must be remembered that the current legislative framework for federally incorporated not-for-profit corporations has not been substantially altered in over 90 years. As a result, the current legislative framework imposes an administrative and financial burden on the organizations involved. Bill C-4 proposes that this framework be replaced by new legislation, the Canada not-for-profit corporations act, which will help alleviate those burdens.
Under the new legislation, incorporating a not-for-profit organization would only take a few days and would involve very little paperwork. The requirements imposed upon these corporations would be reduced to the strict minimum to ensure good governance depending on their size and objectives. The new act will give not-for-profit organizations the flexibility they need to concentrate on their mission. For example, these organizations and their members will finally be able to make full use of modern electronic means to communicate and to hold their assemblies and meetings.
The new act will provide a modern governance framework for the volunteer sector based on member accountability that will allow it to fully play its role. Members will be equipped with the tools they need to effectively manage their organizations. They will also be able to take appropriate measures to correct certain situations when necessary.
In addition, the governance framework will provide the Canadian public with a means of ensuring that sums of money raised are used appropriately and in a responsible manner, which should help boost Canadians' level of trust in not-for-profit corporations.
In order to be able to operate, most not-for-profit corporations count on the support of Canadians from all walks of life. Millions of Canadians are either employed directly in the not-for-profit sector or volunteer their time. In one way or another, they do this to help not-for-profit corporations.
Coming at a time when the expectations of the Canadian public and the members of these organizations have never been higher, the proposed new governance structure in the Canada not-for-profit corporations act will greatly clarify the roles and responsibilities of the directors and officers of the corporations.
The clear duty of care and the due diligence defence against liabilities will help ensure that federal not-for-profit corporations will continue to be equipped to recruit and retain the services of energetic and talented individuals as officers and directors.
For all these reasons, this bill is long overdue. During the committee hearings on Bill C-4, a number of witnesses stated that this new bill would greatly improve the governance system and legal framework of not-for-profit corporations and corporations without share capital in Canada. All agreed on the need to pass Bill C-4, some insisting that it be done quickly.
When such an important framework statute that affects our economy is being modernized and updated, certainty as to how the changes will come about and be enforced is of great importance to all stakeholders.
The government recognizes this and will take concrete steps to help the not-for-profit sector to transition into the new act. With that in mind, a number of tools such as guides and fact sheets along with model articles of incorporation and model bylaws are being developed by Corporations Canada to help not-for-profit corporations and their directors adjust to the new regime.
Notification of the passage of this bill along with information on the availability of materials that will assist in the transition to the new legislation will be sent out to all corporations that will be impacted. This information will be posted on Corporations Canada's website for easy reference, and officials will be available to assist, if required.
Finally, Corporations Canada will work with other government departments and voluntary sector umbrella organizations to deliver training materials to affected corporations.
I am convinced that the flexibility and ease of use provided by this new legislation will be recognized, accepted and welcomed by the volunteer sector.
Let us wait no longer. Corporations in the voluntary and not-for-profit sectors need a framework that is free of excessive demands and also of red tape. They need it as soon as possible. I therefore encourage all members to support this initiative aimed at providing organizations that are important to Canadians with a modern framework that will allow them to devote their full energies and resources to fulfilling their primary purposes of providing much needed services to millions of Canadians.
Keith Martin Liberal Esquimalt—Juan de Fuca, BC
Madam Speaker, one of the big challenges facing the non-profits right now is the fact that the CCRA, Revenue Canada, is coming down on them like a ton of bricks. As we are all aware, this has been an outfall as a result of the Banyan Tree Foundation NGO issue. In the CCRA's zeal to try to find some malfeasance in the non-profit sector, it has spread a broad net and is tying up non-profits which are trying, with minimal resources, to do an enormous amount of good work.
I want to suggest two things for the member. First, that he ask the Minister of National Revenue to call off the attack dogs and start dealing more reasonably with non-profits. The government should listen to their concerns and develop a structure that would allow them to work effectively with the limited resources they have. The member should also bear in mind that our non-profit organizations do an extraordinary amount of work with volunteers across our country. I know the government is trying to do that with the bill but it inadvertently is causing non-profits enormous pain and suffering and comprising their ability to help the people in need who need help from non-profits due to the government's failure to do its job in many areas, from housing to other issues that are affecting those most in need.
Second, I would recommend that the member ask the Minister of Finance and the Minister of National Revenue to change the tax structure to allow foundations to occur in Canada in a similar fashion to what occurs in the United States. If the member were to do that, we would liberate a lot of money.
The last issue concerns the transferring of assets to non-profit organizations, such as real estate. The Canadian Real Estate Association has some very constructive solutions that would enable people to give their real estate assets to non-profits, which would be a huge boon for non-profit organizations to acquire assets that they could use for housing and to run the programs for those most in need.
I would ask the member if he has any views on that and if he is willing to take that to cabinet.
Gord Brown Conservative Leeds—Grenville, ON
Madam Speaker, as a board member of the United Way in Leeds—Grenville since the year 2000, I understand very well the challenges that the not-for-profit sector has to face.
The committee spent a great deal of time listening to witnesses who came before the committee. There were in excess of 300 clauses in the bill. I did address in my presentation that a great deal of time was spent going through the various challenges that the non-for-profit sector is facing.
Many of the things brought forward in the bill would help alleviate the very questions that the hon. member has asked in terms of making it much easier for not-for-profit corporations to operate, but also there would be far more accountability and it would instill more confidence in Canadians in what they do and, hopefully, will make them more generous in their contributions to these various not-for-profit corporations.
Guy André Bloc Berthier—Maskinongé, QC
Madam Speaker, I had asked the hon. member a question about Bill C-4. How will this bill provide clear, additional protection for the directors of these not-for-profit corporations against possible lawsuits that could be filed against them in the course of their activities as volunteer directors?
Gord Brown Conservative Leeds—Grenville, ON
Madam Speaker, one of the problems with attracting directors to these not-for-profit corporations is the liability they may incur by sitting as directors of these corporations. What has been addressed in the bill is much more clear in terms of what their responsibilities are. From what we heard from the various witnesses, they are very happy, not only with the accountability but clearly laying out the responsibilities of directors.
Marc Garneau Liberal Westmount—Ville-Marie, QC
Madam Speaker, as the Liberal critic for industry, science and technology, it is an honour for me to say a few words about BillC-4, An Act respecting not-for-profit corporations and certain other corporations. Let us recall that this bill originated with the Liberal Party about a decade ago. Its object was to revise the regulations and the governance rules of not-for-profit corporations.
As we know, this bill deals specifically with not-for-profit corporations; it would replace part II of the Canada Corporations Act and it would apply to some entities presently covered by part III of that act.
The bill would also provide for continuance of corporations established by special acts of Parliament under the Canadian Business Corporations Act. Lastly, 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, for example, business corporations.
In general terms, this legislation seeks to provide a modern governance framework to regulate some 19,000 federally incorporated not-for-profit organizations, including community organizations, cultural organizations, national charitable organizations, religious organizations and many others.
First in July 2000, and again in March 2002, Industry Canada released consultation reports and organized new consultation meetings across the country to discuss various reform options.
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 of 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 contain amendments to Bill C-21, including the definition of what is meant by “a soliciting corporation”.
As we know, soliciting corporations are those that receive any or all of their funding from public sources, by fundraising, for example, or by other means.
It can be seen that Bill C-4 is sufficiently flexible to effectively meet the needs of not-for-profit corporations of all sizes by providing clearer rules, as well as accountability and transparency in the entire not-for-profit sector.
All in all, the bill makes significant changes to the area of financial responsibility, to the rights and responsibilities of officers and administrators, and to the rights of members.
If passed, Bill C-4 will implement new rules on financial reporting based on the organization's annual revenues and sources of funding; new rules on standard of care for directors and new rules for director liability; new rules that permit written resolutions in place of meetings and allow corporations to avail themselves of technological advances; 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.
A 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, such as 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 and officers and members' rights.
Improving transparency and accountability is a major objective of the new legislation through new rules on financial reviews and disclosure. All non-profits would 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.
In the original consultations, strong support was given for the proposed reforms dealing with standard of care, due diligence, defence, indemnification in insurance and limited liability of directors and officers.
Some of the areas where there was less unanimity between those consulted originally included clarification of the rules governing not-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 or not it should be necessary to file bylaws, and, as well, the level of auditing required.
The committee certainly examined 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.
As a new member, I have really enjoyed my first committee task, which was to make a constructive study of Bill C-4, and I believe that we succeeded.
On a personal note, I enjoyed the committee process surrounding Bill C-4. This was my first experience in committee work and I was certainly conscious that I was participating in an important undertaking on behalf of the people of Canada. I was also conscious that Bill C-4 had been on the books for a very long time and that there was urgency in moving it forward.
During the course of the past three months or so, the industry committee heard from a variety of witnesses, some of whom had appeared before the committee in earlier days. The committee also had the opportunity to interact with officials from the government. I would like to take a moment to commend them for their professionalism. They certainly helped me understand some of the very complex aspects of Bill C-4, being one of the few non-lawyers in this House.
During the witness hearing period, we had the pleasure of hearing from the following groups, among others: the Canadian Society of Association Executives; the Canadian Bar Association; the Certified General Accountants Association of Canada; the Canadian Institute of Chartered Accountants; United Way of Canada; Imagine Canada; the General Synod of the Anglican Church of Canada,
During all the consultations with the witnesses before the committee, it became clear that all stakeholders had the best interests of the bill at heart and had monitored its progress closely for many years. The fact that they had taken the time to prepare their submissions and to travel to Ottawa to speak to us is evidence of the importance they assign to Bill C-4. Their goal, above all else, was to clarify and simplify by making constructive suggestions.
As I said, we also consulted with a team of government experts. I will, if I may, summarize briefly what they had to say about the improvements proposed by Bill C-4.
This bill greatly simplifies the incorporation of not-for-profit corporations by replacing the discretionary approval process of the minister to issue letters patent with one that is closer to a legal procedure.
It simplifies the administrative formalities and related costs for small corporations, by allowing them to dispense with the financial review, subject to membership consent.
It provides the not-for-profit corporations with all necessary flexibility to organize their activities via their by-laws.
It permits members to receive information via electronic means, including the holding of meetings by electronic means, if members so desire.
It provides an unequivocal defence for board members and directors against unjustified civil proceedings.
It provides members with a new set of rights, including the right to financial information, the right to propose items for discussion in preparation for annual meetings, and the right to recourse if there is abuse and a dispute arises with the corporation.
It provides a great deal more transparency to corporations funded by public donations or government grants. It sets out clear rules and procedures for a broad range of potential situations, including funding though borrowing or trust indentures.
We are well aware that a number of these provisions will never be used by the bulk of these corporations, but the new legislation will eliminate ambiguities which can, in some cases, cost thousands, if not hundreds of thousands, of dollars in legal fees before any settlement is reached.
I believe that the latest version of Bill C-4, although no one would ever claim perfection, is a very sensible document. It modernizes the law dealing with Canadian not-for-profit corporations. Needless to say, it has been a long time coming. I hope we can take it expeditiously through the remaining steps of its journey.
Some clarifications, particularly with respect to soliciting corporations, were added as a result of the witness consultations. On the issue of simplifying the bill by removing certain parts that apply to only a very limited number of corporations, the decision was taken to keep them in the bill for the sake of completeness.
While the bill may be a relatively thick document, it is thick so that it can cover all aspects of the law dealing with not-for-profit corporations. Most corporations will be dealing with a much smaller part of the law in their daily operations.
In summary, I believe Bill C-4 is a good bill. It is the product of constructive work between all committee members, and I look forward to seeing it become law.
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Madam Speaker, I listened with interest to my colleague's speech, especially in light of the fact that I was industry, science and technology critic when this legislation was first introduced a few years ago. The drafting of a completely revised bill was delayed by elections. I believe it was urgent that it be done. Indeed, members of the committee did a good job and at this stage, the bill should be adopted as soon as possible.
However, as my colleague mentioned, bills can always be improved. This bill does not contain a classification system for existing types of organizations. This means that a charitable organization whose purpose is to provide services to non-members will be in the same situation as a mutualist organization that provides services to its own members. Under this bill, all not-for-profit organizations covered by the act will belong to the same general category. The Canadian Bar Association sees that as a weakness in the bill.
Could my colleague tell me if he thinks this situation should have been rectified? Was this noted in committee and did the committee decide to leave the bill as is? It seems to me that the current updating of the act, which had not been done in a very long time, may require further adjustments in three, four or five years to take the size of not-for-profit organizations into account.
I would like to know my colleague's point of view on this to ensure that the maximum has been done already so that the act is perfectly adapted to the new realities of the 21st century.
Marc Garneau Liberal Westmount—Ville-Marie, QC
Madam Speaker, I thank my colleague from the Bloc for his very pertinent question which was thoroughly presented by his colleagues who were members of the committee.
The classification of not-for-profit organizations was presented as the member did in his question. However, after listening the Bloc members' arguments, the committee decided not to proceed with a classification of not-for-profit organizations for the moment.
Keith Martin Liberal Esquimalt—Juan de Fuca, BC
Madam Speaker, many citizens in our communities are in dire need, particularly during the economic downfall that has happened in our country and around the world.
There have been a number of very constructive solutions from the non-profit sector. One of those has to do with tax credits, in that non-governmental organizations should receive the same tax benefit as political parties. Why on earth do donors to political parties receive a much higher tax benefit than donors to NGOs, which many of us would argue are certainly more worthy of receiving money for helping those most in need?
Does my colleague think that is something we may want to consider? Does he have any other ideas? Madam Speaker, I know that this is a big interest of yours.This is one of the prime responsibilities of government. The government has really failed to help those most in need. In the city of Victoria, there are 1,400 people living on the street. The absence of a credible platform dealing with housing is a huge problem. No matter what other issues an individual may have, that individual will never be able to deal with those issues unless he has a roof over his head.
It is important for the government to work with other parties and sectors outside the House to have a credible housing strategy. Realtors have some very constructive suggestions, one of which would be changes within the revenue act to include a tax rollover provision. This provision would enable people to sell assets they currently have and roll that money over if they purchase, rebuild or refurbish a new structure within one year. The government could make it a quid pro quo. If a person selling an asset to buy an asset accessed the rollover strategy, the person would be obligated to spend some of that money on affordable housing.
Does my hon. friend have any comments on these issues? Perhaps he could provide other solutions given his vast experience.
Marc Garneau Liberal Westmount—Ville-Marie, QC
Madam Speaker, my hon. colleague from Esquimalt—Juan de Fuca is always thinking broadly in terms of policy in an incredible number of different areas dealing with government business.
During our deliberations in the three months that we saw witnesses, the issue of tax benefits did not come up. Like the hon. member, I certainly agree that people in the not-for-profit corporations, and I am an honorary patron of one myself, devote an incredible amount of their personal time to good causes, without remuneration. The great majority of not-for-profit corporations are made up of volunteers, and they do wonderful things.
The idea of recognizing the enormous contribution they make through some form of tax benefit is certainly appropriate, and perhaps it should be brought up at a future time. For the purposes of Bill C-4, it was not an issue that was raised specifically within the context of the law itself.
Guy André Bloc Berthier—Maskinongé, QC
Madam Speaker, I have a question for the member.
As he said in his speech, he met various witnesses during the study of the bill. I will ask two questions. First, some would want to impose more controls on the role of directors of not-for-profit organizations. Does the member think that the people who will sit on the boards of the new not-for-profit organizations will be better informed of their roles and responsibilities because of the new structures?
My second question relates to the eligibility for charitable organization numbers which has been creating a problem for a few years. Many charities or advocacy groups, for example, would like to get charitable organization numbers and be able to issue tax receipts. That has been more difficult for some years now. Was the issue raised during the study of the bill? Does my colleague believe that the fact that there is absolutely no classification of not-for-profit organizations will allow the government to issue more of those charitable organization numbers?
Marc Garneau Liberal Westmount—Ville-Marie, QC
Madam Speaker, I would like to thank my colleague for his question.
The issue of a charitable registration number has not been raised during debate this time, but it was raised in the past when I was not yet sitting in the House of Commons. The question was not raised again during these discussions and meetings with the witnesses.
We know there is another department involved when it comes to charitable organizations, the Canada Revenue Agency. At this point, there is a consensus among the members of the committee, who believe it is important to keep these two areas, not-for-profit organizations and charitable organizations, in their own niches.
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
Madam Speaker, a number of NPOs will undoubtedly be very happy to see that Bill C-4 is moving ahead and that there is a common desire to modernize Quebec and Canadian corporation laws.
For some years, a number of stakeholders, including experts, public servants and not-for-profit organizations, have been asking the government to modernize the legislation. Starting early in this decade, some people have participated in consultation sessions, while others have sent briefs to Industry Canada calling for speedy modernization of the Canada Business Corporations Act. It does seem that after several vain attempts, Bill C-4 may finally pass. It would seem to be very obvious that there is a common desire on both sides of the House to modernize the Canada Corporations Act, particularly given that the bills introduced by previous governments have many similarities.
We will recall that the Liberal Party introduced a bill in 2004. Then, several years later, in 2008, the Conservative government also introduced a bill with a different number, but that contained essentially the same points and same clauses as were in the bill introduced at the time of the Liberal government. Had it not been for the election, I believe that the bill presented by the Conservative government in June 2008 would have been accepted. Today, we are at the third reading stage for Bill C-4. Even though this is third reading, I think it is important to provide a summary of this bill.
The primary objective of this bill is to propose a new Canadian not-for-profit corporations act that will provide those organizations with a more modern and transparent framework. To that end, the NPO operational framework will base its corporate governance model on the one in the Canada Business Corporations Act. The new act will gradually repeal the Canada Corporations Act and replace Parts II, III and IV of that act. This transition period will be spread over three years. Although the bill is complex, the new framework that will govern not-for-profit corporations should greatly simplify and clarify the role of NPOs in our society, both for their members and directors and for the general public.
During consideration of Bill C-4 in committee, a number of witnesses explained to us how important it was to enact it. Although some groups had suggestions to make regarding the document, the message from the witnesses was practically always the same.
We strongly support Parliament’s objective of providing a modern, transparent and accountable framework for governance in the not-for-profit sector in Quebec and Canada.
Recognizing the important role that not-for-profit organizations play in our society, the Bloc Québécois is convinced that Bill C-4 should pass. According to the testimony we heard at the Standing Committee on Industry, Science and Technology and what the groups I met on the Hill had to say outside of the committee, this bill will be beneficial.
There are several reasons why the Bloc is in favour of this bill at third reading. As I said in a previous speech, Bill C-4 will considerably improve the efficiency and transparency of the process for incorporating not-for-profit organizations.
Not-for-profit organizations are currently required by law to keep itemized accounts of their activities, but they are not required to make the accounts public. These organizations are ultimately responsible, though, to the public. It is only natural for organizations which raise funds to be transparent and for the financial statements they submit to the government director—who supervises or collects all the information—to be available to the public and any citizens who want to know about the funds that were raised.
The legislation in Bill C-4 would require not-for-profit organizations to open their financial records to their members. That is very important. This information is often controlled by a particular member and is not available to other members because of procedures or obstruction. The government administrator and manager as well as the director—it is important that this should be the government—would make this information public. Above all, the information should be available to the grassroots of the organization. The effect will be to help directors and officers manage their organizations and agencies better and enable members to follow the financial situation of the organization between annual meetings to ensure that the funds really are being used for the stated purposes and objectives.
This framework is necessary for transparency and for the free flow of information within organizations outside of the annual meetings. These meetings are only once a year, of course, and information should naturally circulate the rest of the time as well.
When this bill was being studied in committee, one of the main points that kept returning, in addition to the objective of being modern and transparent, was improving the efficiency of not-for-profit organizations, especially by replacing the letters patent system by an as of right system of incorporation. This makes it much easier to establish not-for-profit organizations.
The current system of discretionary approval by the minister is eliminated and the process for granting incorporation is simplified, which helps organizations that could benefit from increased flexibility. In addition, the new process is less costly for both not-for-profit organizations and the government.
Another change that will facilitate the process for these organizations is the fact they will no longer be required to get their by-laws approved by the director or the government agency for not-for-profit organizations. As a result, they will have the flexibility they need to develop by-laws that reflect their particular needs. All this will increase public confidence in not-for-profit organizations and enhance their credibility.
During committee review of the bill, the Bloc Québécois felt that there were some minor flaws in the legislation that we would have liked to fix. However, none of the amendments that we proposed—and that were rejected by committee members—justifies rejecting Bill C-4. There is no classification system for NPOs in the existing act, and Bill C-4 still does not include a mechanism to change that. The need for such a mechanism was not recognized and was not supported by a majority on the committee, but I think that over time the importance of a NPO classification system will be recognized.
Government officials told us that the new legislation does not need a classification system because the framework is permissive and flexible, allowing organizations to choose how to apply many provisions.
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.
This is like a big funnel, because if a corporation asks to be incorporated as a not-for-profit organization and fits in that broad range, it can be recognized as such and thus have the right to operate as a not-for-profit organization.
We would have liked to amend clause 3 of the new legislation, which does not require NPOs to state their purpose in their articles of incorporation, thus sidestepping the whole notion of specifying what action an organization can take in accordance with its objects.
This is an important issue, considering that the federal Parliament has jurisdiction over only those organizations that do not pursue provincial objects.
Finally, we proposed an amendment to clause 181, dealing with public accountants. Based on the testimony heard, public accountants already meet all the qualifications required under a provincial act or regulation, depending on the province, to perform their duties under clauses 189 to 192. Most provinces have regulations to monitor the accounting profession. That provision seemed a little redundant to the Bloc, particularly because a public accountant who provides accounting services must already meet the requirements imposed by his association, whether these requirements are related to a matter of law or practice. The required monitoring level is adequately covered by other clauses in Bill C-4.
Again, despite the fact that we proposed amendments to the committee, and that these amendments were not accepted, we feel that this does not justify rejecting Bill C-4. The issues that the Bloc Québécois raised in committee were legitimate. Public officials presented arguments that reassured committee members. As for us, we wanted to examine the matter thoroughly, so as to avoid any potential conflict between the provinces and the federal government.
Not-for-profit organizations have been waiting a long time for changes that will modernize the Canada Corporations Act. In the light of the testimony we heard, and in the interests of transparency, effectiveness and fairness, the Bloc continues to believe that these changes are legitimate and essential. Those involved with not-for-profit organizations deserve to be able to work with a Canada Corporations Act that will effectively meet their needs.
Since I have a little time left, I will summarize the objectives of Bill C-4. This bill will, in a concrete way, simplify the establishment of not-for-profit organizations. We live in the age of speed.
In my view, the general public, and all those who work as volunteers, do not wish to be overly burdened by nitpicking regulations or forms that have to be filled out. Now we have something that would make their lives simpler.
The bill clarifies the duties and responsibilities of directors. When they belong to not-for-profit organizations that raise their funds from the public, I feel that directors must be aware of the duties and responsibilities that the role requires. Bill C-4 specifies those responsibilities.
The bill would establish means by which directors and officers could defend themselves in liability cases. Sometimes, members of the organization or of the public decide to sue an organization. In a previous career, I was a community recreation director in the city of Chicoutimi and I had an experience like that. Of course, it was not a federal organization, it was local. A conflict arose between a group and the organization responsible for certain activities. The citizens hired a lawyer and launched a legal attack on other volunteers—it was volunteers against other volunteers—with prosecutors and lawyers.
Bill C-4 would allow some protection when complaints are unfounded or groundless. This means that, when a complaint is made, it will have to be well-founded and serious.
Furthermore, the bill will provide members with increased rights to participate in the governance of their corporation. If a member decides he or she wants to see a list of members, can he or she consult it? Bill C-4 allows such consultations. Can he or she consult the accounting records? Bill C-4 also allows a member or director the opportunity to do so.
The bill will establish a better mechanism to oversee the organization's accounts. When doing the accounting or auditing the books, it is important that public accountants audit the books, especially in the case of a Canadian national organization.
Presentations have been made on the matter. We did not see the need to give too many explanations or details. We felt that Bill C-4 clearly states that it is sufficient to be recognized by a professional corporation in order to audit the books. Bill C-4 already includes that, but with a much more detailed definition of a corporation.
Those are the objectives. If I still have a little time left, I would also like to remind the House of the Bloc Québécois' position. I believe I have one minute left?
The Bloc Québécois is in favour of the principle underlying the bill and the overall wording of the bill, considering how outdated the current Canada Corporations Act is. Bill C-4 will modernize the act, encourage transparency and ensure accountability among those who are responsible, both on the board of directors and among the members of a corporation.
Charlie Angus NDP Timmins—James Bay, ON
Madam Speaker, I listened with great interest to my hon. colleague's analysis of this bill and the plan by the Conservative government to try to actually deal with not-for-profit corporations.
Just over a year ago the government cancelled the program that was in place across Canada to support volunteers and the important work they do in our communities. There was very little funding to support the volunteer networks that existed. Yet the government clearly decided that it was not a priority. I do not know what my hon. colleague found in his communities, but in mine the voluntary sector suffered a great deal because of that loss.
While looking at a bill to help the non-profit sector in this country, we in the NDP were certainly hoping that we would see some leadership and a plan that would actually ensure that we have strong, stable and vigorous non-profit sectors, because they do so much of the grassroots work.
It seems this is a bill that tinkers with the regulatory framework. There are 170 pages of complex regulations. It might work if we were protecting corporate assets, but certainly the people who are supposed protect corporate assets never did that job no matter how many pages of regulations there were.
When we are looking at 170 pages of regulations for the non-profit sector, it seems to me we are excluding many people, average lay people who might want to help a local organization and want something simple, like the Robert's Rules of Order, a simple set of rules. Yet the regulatory framework that the government is imposing on the non-profit sector will certainly make it much more difficult to encourage people to participate in the non-profit sector and volunteer work in our communities, because of the onerous levels of regulations that are being imposed.
I would like to ask my hon. colleague what he thinks about this level of regulation on the volunteer sector by a government that is notorious for saying it thinks regulation on the financial sector and every other sector should be lessened.
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
Madam Speaker, I think I would answer my colleague by saying that Bill C-4 regulates and governs organizations of a national character, that is organizations across Canada.
Obviously, we must help volunteers and make their task easier. However, local and provincial non-profit organizations are regulated by the Quebec government or other provincial governments. Having read and studied Bill C-4, I think it should be acknowledged that it brings improvement, modernization and more transparency and protection for volunteers.
I would like to get back to what my colleague said about the program to support volunteers that the Conservatives cancelled. They weakened a lot of programs helping disadvantaged people and the voluntary sector when they cut their financing by $1 billion. This is an aberration. Instead of cutting these funds, the Conservative government should have transferred the money to Quebec. I think Quebec and the other provinces are directly responsible for developing the voluntary sector at the local and provincial levels.
Carol Hughes NDP Algoma—Manitoulin—Kapuskasing, ON
Madam Speaker, my colleague has explained Bill C-4 but I want to mention that the organizations would have preferred to see changes to secure stable, long-term financing. They would also have liked to see some rules that would clarify and improve the charitable status process. We are concerned about charities.
Would my colleague agree that this bill may discourage people from establishing non-profit organizations? Does he think this bill could be costly for these organizations?
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
Madam Speaker, Bill C-4 creates legislation regulating and governing organizations incorporated across Canada. In my opinion, what may discourage both volunteers and non-profit organizations is not Bill C-4 but this government, which is cutting programs indiscriminately. That is what will discourage the voluntary sector and stifle new corporations at the local and provincial levels.
Guy André Bloc Berthier—Maskinongé, QC
Madam Speaker, I would like to ask my colleague a question following his excellent speech here in the House.
One of the things that the Bloc Québécois wanted to see in this bill was a better system for classifying organizations according to their missions and goals. Why did some members of the committees and some departmental officials say no to that? What impact does this lack of classification have? For example, what is the impact of that policy on an economic organization, which is not the same as a volunteer or charity organization?
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
Madam Speaker, we wanted a classification system. There are so many different kinds of organizations. Any organization that meets set criteria, whether it is charitable, political or social, is placed in the same category.
We think that it would have been easier to classify organizations according to type. For example, an organization involved in minor hockey in Canada would be in the sport category. It would be distinct. Sports-related organizations and charitable organizations would have different criteria.
Time will tell, but we think that this kind of classification would have been a good thing for organizations. Maybe there should be criteria enabling organizations to get recognition or to be granted a charter in their field.
Carol Hughes NDP Algoma—Manitoulin—Kapuskasing, ON
Madam Speaker, I do have some concerns with regard to this bill. I just want my colleague to explain this a little bit more.
This bill is not going to improve the way that voluntary sector organizations do their business. It may improve their accountability and transparency, which is, of course, important to members and the public. However, it does nothing to address the broad concerns of the sector, such as securing long-term, stable financing, clarifying and improving the terrible status process, and addressing advocacy needs.
Could he explain to me whether he has these same concerns? Maybe he can try to give me one point as to why I should be supporting this bill.
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
Madam Speaker, the main purpose of Bill C-4 is not to propose funding, but to modernize regulations governing rights of incorporation in Canada.
One good reason to make that happen is transparency. When an organization raises funds from members of the public, it is accountable to those providing the funds. Financial reports have to be made available. Any member belonging to a national corporation should have access to the list of members and, as a member, should be able to review the organization's financial information and management policies. The current act does not allow for such things.
Bill C-4 introduces transparency and a modern approach. Organizations should be accountable to those who contribute financially.
Glenn Thibeault NDP Sudbury, ON
Madam Speaker, I am very glad to be here today to discuss Bill C-4, an act to amend the not-for-profit corporations act. It is of importance for not-for-profits in our communities right across our great land.
I can offer some advice, as the former executive director of the United Way in Sudbury, that there were several initiatives we were involved with that caused us to slow down the process because of the bureaucracy, red tape and heavy paperwork involved. This amended legislation that we amended in committee would actually help us change some of that.
However, before I go into the discussion that took place at the industry committee in these past few weeks, let us first look at how we got to this point.
For five weeks in the spring of 2002, a team from Industry Canada crossed the country listening to the views of stakeholders on proposals for a new not-for-profit corporations act. Over 300 individuals participated in the consultation sessions, while others sent in briefs to the consultation website.
A preliminary round of consultations was held in the previous fiscal year, and feedback from those first consultations and commissioned research studies was incorporated into the two discussion papers circulated prior to this second round of consultations. Written in plain language, “Reform of the Canada Corporations Act: Draft Framework for a New Not-for-Profit Corporations Act” promotes a corporate governance structure grounded on the themes of transparency, accountability, fairness, and efficiency. The second volume, “Discussion Issues for a New Not-for-Profit Corporations Act” highlights some of the proposals in more detail.
What was determined by these consultations?
A number of stakeholders who had participated in the preliminary round of consultations thanked Industry Canada for incorporating many suggestions in the new framework proposal.
Participants were generally supportive of the various reform proposals, as well. Strong support was expressed for the proposals concerning: the due diligence defence, the standard of care and insurance, and limiting liabilities of directors and officers. There was a divergence of views among participants on issues such as: a classification system, the filing of by-laws, and audit requirements.
At the end of the consultations, participants had several overarching concerns. Co-ordination with other federal statutes and provincial legislation was imperative. Many participants were concerned with ensuring that new legislation would fit with other federal statutes and provincial legislation. In each venue, participants concluded that coordination and consistency at the federal and provincial levels was imperative.
There is ongoing confusion about the distinction between not-for-profit corporations and registered charities. Many issues that arose were tax specific and, as such, under the jurisdiction of the Canada Revenue Agency and the Ministry of Finance.
Discussion of many issues returned to the need for a classification system. Although participants were divided on the need for a classification system, discussion of many other issues returned to the question of whether to include a classification system in a new act.
I will now look at some of the structures within the act that caused some concern.
The first structure that was of concern was the classification system. Reaction about the merits of including a classification system in the new not-for-profit legislation was mixed across the country. However, participants returned to this issue time and again, often noting that other issues could not be resolved without deciding on the issue of a classification system.
Those opposed to the inclusion of a classification system felt it would unduly complicate matters. One of the reasons offered was that it would be difficult to classify some organizations because of the varied work that they do and/or the services that the provide. For example, the United Way that I used to be involved with offers leadership development services which provide support, governance training, fundraising training, training to all sorts of small not-for-profits and charities throughout the greater city of Sudbury and, at the same time, offers services to do people's taxes, to help people find shelter. Those are some of the services that we offer, as well as fundraising.
A number of participants were in favour of a classification system that was either based on levels of revenue or number of members or that distinguished between public benefit, mutual benefit, religious and, in some cases, political organizations.
Another area of concern was the filing of by-laws. There was general agreement that moving away from the archaic letters patent system was a positive step. With respect to the filing of by-laws, a number of participants expressed support for the simpler structure proposed; in fact, a minority of participants agreed that there should be no filing requirements at all.
There was a difference of opinion on whether by-laws and amendments should take effect immediately upon passage by members, or only when filing was complete.
Some did not see the benefit of filing at all if by-laws become effective when passed. Others noted that there could be problems if by-laws did not become effective at the moment when members passed them, particularly for organizations that do not meet frequently. One person predicted that with a filing requirement but no scrutiny, Industry Canada would end up with “the worst of both worlds”: organizations that are not in compliance with the law and filed by-laws that are inaccurate. Participants in a number of cities voiced concern about the possibility of an increased security risk without thorough scrutiny.
Recognizing that some organizations have rapid turnover and limited corporate memory, many participants supported the notion of the government acting as a central repository. There were several requests for Industry Canada to put by-laws online if it accepts the repository role.
Most participants agreed that model by-laws would be very helpful, and urged they be kept simple. Some asked for the creation of an easily updateable web interface, including secure access and summary reports.
Another area of concern was the disclosure and accountability. A majority of participants across the country were in favour of the framework proposal that organizations be required to make corporate financial statements available to members, directors, officers, and the director. However, not all agreed that members should be subject to a fee for copies of the financial statement, and many more disagreed with the proviso to allow exemptions to the requirement.
Those opposed to the requirement were concerned that a requirement to make financial statements available could be burdensome and expensive. A number of participants at one meeting objected strongly to the director having access to financial statements at any time. One suggested that the law be written in as narrow a context as possible, only granting the director a right to information for a specific purpose.
It was proposed that a clearer definition of “financial statement” be developed. A number of participants took exception to the notion that financial statements are presented to members “for their approval”. A suggestion was made to change the language on page 45 to read, “directors would be required to present the audited reports”, without mentioning approval or acceptance.
Several participants in Edmonton, Regina, and Toronto were very concerned about the proposal to allow exemptions from the disclosure requirements, arguing that issuing an exemption would place Industry Canada between the auditor of an organization and the organization itself. Exemptions were seen to contravene the principles of transparency and accountability, and should only be granted according to clearly articulated criteria.
Another issue was membership lists. A majority of participants agreed with the framework proposal that would allow members to obtain copies of the membership list of their organization, provided that the framework is narrowly defined and access is restricted. Several asked that the issue of selling lists be addressed. Some participants noted that it would be essential to ensure that the new act mesh with other federal legislation including the Personal Information Protection and Electronic Documents Act and the Anti-Terrorism Act.
In order to circumvent the release of membership lists that include names, addresses, and telephone numbers, it was suggested that an organization charge for undertaking mailings on behalf of members in order to ensure that the privacy of members is not breeched.
The definition of member was confusing to some and worrisome to others.
The definition of “member” was confusing to some and worrisome to others. Some organizations define members as anyone who receives services while others include donors. The statement on page 35 of the “Draft Framework for a New Not-for-Profit Corporations Act”, 'the act would contain a provision defining a member as anyone designated by the board of directors', alarmed some participants and elicited a promise to clarify the wording.
Some participants believed that signing an affidavit in order to obtain a membership list would be pointless. The cost, and the expense of tracking down individuals to sign the affidavit in the first place and pursuing legal action in the event of an infraction, was also seen as problematic.
In addition, the proposed timelines were questioned. The allotted 15 days for changes was seen as too short, and the requirement to maintain records for six years was viewed as “impossible” for many organizations.
Rather than the framework proposal that stipulates a prescribed amount as a threshold above which corporations would be required to have annual audits, most participants across the country favoured a graduated approach, or one based on classification or size.
Many supported the Saskatchewan model in which provincially incorporated not-for-profits with revenues of over $100,000 must be audited, those between $25,000 and $100,000 must have at least an internal review, and those with less than $25,000 have no audit requirements. Concurrent with this was widespread support for the adoption of a graduated standard such as a review engagement, which is less than an audit but satisfies an understanding of the costs involved.
Other suggestions included differentiating between organizations that receive public funding and those that do not, or basing it on classification. For example, if an organization is classified as political it should be required to have an audit regardless of its size, a charitable organization with tax benefits should be subject to a threshold, and mutual benefit organizations could determine their own thresholds.
Suggestions were made to adopt the Canadian Generally Accepted Accounting Principles rather than keeping separate books for protection against not-for-profit corporations using their tax benefits to subsidise for-profit activities, or to have separate statutes for charitable and noncharitable organizations.
Yet another issue was auditors. Representatives of the Canadian Institute of Chartered Accountants did not agree with the framework proposal as it pertains to auditor qualifications and proposed that the new act adopt the Canadian Business Corporations Act definition of “auditor”. The opposite view was conveyed by representatives of the Certified General Accountants, or CGAs), of Ontario. There were several calls to have audits not be restricted to either CGAs or CAs if made mandatory. Some agreed that a smaller organization should be able to agree to an internal review by a non-accountant, provided that individual had no ties to the board.
Two specific suggestions were made about the wording in the “Draft Framework for a New Not-for-Profit Corporations Act”: First, the last paragraph on page 46 be amended to read, “The auditor meets the standards of the auditing profession.” Second, on page 47, “Right to attend meetings,” would imply that the auditor’s expenses to attend all meetings would automatically be paid by the corporation, something that might be a burden for small organizations. It was suggested the wording could be changed to “the auditor is entitled to attend at the request of the board, and expenses will be paid.”
Something I know quite personally about is directors' liability. The vast majority of participants at the 10 consultations favoured the adoption of the framework proposal that specifies that every director or officer of a corporation would owe a duty of care to the corporation. This objective test would create a uniform standard of care for directors and officers, and is clearly understood by Canadian courts.
It was noted that there could be ambiguity in the notion of “acting in best interest.” As many organizations registered as not-for-profit corporations address a public good, one participant wondered about a potential conflict of interest when a director acts in the best interest of the entity as opposed to the community it was designed to serve.
Participants emphasized the need for consistency with other statutes such as the Canadian Human Rights Act, the Employment Standards Act, and the Income Tax Act, commenting that little can be changed in one without amendments to the others.
There was unanimous approval of the framework proposal that would include a due diligence defence for directors and officers of not-for-profit corporations. Participants saw this as a codification of common law and the right thing to do.d
A majority of participants favoured adoption of the framework proposal that would broaden the scope of situations to allow organizations to identify directors and officers, to provide mandatory review of directors and officers in specific circumstances and to allow corporations to purchase insurance. Many participants were concerned about insurance issues, and many supported advancement of defence costs. Many participants across the country were very concerned that the cost of insurance would be prohibitive for small organizations and impossible to obtain.
A majority of participants also agreed with the framework proposal that would place no statutory limit on liabilities for directors and officers and would encourage proper care and diligence in management of organizations. Participants who supported the framework proposal liked the idea of clarifying but not limiting liability. Some remedies were suggested for these concerns.
Mainly, the draft framework proposal does not make a recommendation with respect to the derivative remedy. The concept of including a derivative remedy received mixed reviews across the country. Those opposed to providing for derivative action said that its inclusion would be used to burden organizations with frivolous actions, or allow a third party to hijack the agenda of an organization.
Those who favoured the inclusion of this remedy felt its inclusion was necessary in order to ensure accountability and credibility. A number of other saw this mechanism of accountability as important and urged that it be included as a hallmark of modern statutes. Others suggested keeping derivative as a remedy, but limiting access so that small, special interest groups could not abuse it in clarifying the rules under which it could be used.
Participants were mixed in their reaction to the framework proposal, which does not provide for an oppression remedy. Those who agreed with its exclusion included a participant who argued that any one disgruntled member could use it to halt the workings of an organization. It was pointed out that the common law remedies were made for truly distressful situations.
Among those who argued in favour of including this remedy was one participant who contended that there were many disputes within not-for-profit organizations and therefore a real need for remedies. In Quebec a participant found this option redundant because such protection was already available under civil law.
A strong consensus emerged across the country for the proposition that the dissent right and appraisal remedy should not be included in the new act, but the corporation should be free to include similar provisions in its articles or bylaws.
The framework proposal includes no provisions respecting natural justice and fair procedures. The majority of participants from across the country agreed with the framework proposal. Many participants liked the fact that corporations would be free to include these provisions in their articles and bylaws, rather than enshrining them in the act.
Most participants in St. John's, Halifax, Winnipeg, Edmonton and Vancouver agreed with the framework proposal not to include a modified proportionate liability regime, while several participants in Montreal, Ottawa, Toronto and Regina did not agree with it. A number of the comments made during the consultations were actually points of clarification that reflected the highly technical nature of this subject area.
One participant saw no valid reason for including MPL in the statutes as not-for-profits were not the types of corporate organizations that needed it. Another disagreed and urged that MPL be included, stressing the importance of consistency in legal approaches. Secured creditors rely on audited statements and auditors would be liable to secured creditors, as would directors and officers. A suggestion was made to make the NFP statute consistent with the CBCA.
The CICA argued that the MPL should be included in the act for the sake of fairness. Accountants should be responsible for their own acts, but not the acts or omissions of others. A person who makes a relatively smaller, non-existent contribution to a wrongful act should not, in all fairness, have unlimited liability.
The framework proposal, which has no provision allowing for the creation of corporations sole, met with strong approval across the country. However, the provision to allow standard, not-for-profit corporations to be set up with only one director and one member was not enthusiastically embraced. Many participants in most cities preferred to see a minimum of three directors.
Bill C-4 is long overdue legislation for a very crucial, important part of Canadian society. I urge all members to support this amended and improved bill so the Canadian Parliament can improve the systematic framework for not-for-profits.
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Speaker, I congratulate my colleague on his speech. He informed us of the extensive consultations that were conducted. There was a great deal of collaboration amongst the various parties in order to adopt this bill.
It is appropriate at this time to acknowledge the extent to which non-profits in our society contribute to the quality of the social and economic life of Quebec and Canada.
However, I would like to make one comment. My colleagues who sat on the committee made suggestions that were not retained concerning a situation that may require the review of part of the law in a few years. I am referring to the classification system for non-profit organizations. I will give two examples. There are charitable organizations, that is organizations that provide services or benefits to individuals who are not members. For example, people collect money for a cause of some kind. There are also mutualist organizations, which provide benefits to their members.
The fact that there is no classification in the law to distinguish between these categories represents a problem that could grow in the future. In any event, that is the opinion of the Canadian Bar Association. Organizations with quite different purposes will all be in the same category. That is unsatisfactory.
What does my colleague think about that and why did the committee not retain this suggestion?
Glenn Thibeault NDP Sudbury, ON
Mr. Speaker, I, too, agree that there still needs to be more improvement in the bill, but most of the not-for-profits and organizations we met with talked about it being a step in the right direction.
At the start, we, too, had many concerns about the bill. Until it was amended, we were very concerned about some of the rules and regulations. I hope the organizations that the hon. member mentioned will continue to press the government to include this in the bill.
Rob Oliphant Liberal Don Valley West, ON
Mr. Speaker, I want to ask the member a question around auditing and review engagements and the thresholds that are in the bill. I am speaking as someone who has spent 24 years working in not-for-profits, with a variety of levels of income and scope of business, from $50,000 to $80,000 a year up to over $1 million a year.
While there are differences, we have to protect our smaller not-for-profits from the exorbitant costs that auditors sometimes charge. I have a concern about review engagements actually protecting the integrity of smaller organizations. While we need to ensure those organizations continue in their not-for-profit business and do not have costs thrust upon them, I have a concern about the integrity of those organizations and their ability to keep public confidence.
Is the member convinced that those thresholds are the correct thresholds for audits and review engagements and the differences that are involved?
Glenn Thibeault NDP Sudbury, ON
Mr. Speaker, as a former executive director of an agency that gave out funds, I know of many instances where we provided $10,000 to organizations and it would then cost them $5,000 to get an audit. There was no point in giving them the $10,000 because they would have to spend it all on an auditor. The bill addresses that, but there still needs to be some accountability.
One way we were able to help organizations, specifically in Sudbury, was to create what we called leadership development services through the United Way. Volunteer accountants were more than willing to provide services to those organizations. The bill looks at creating some type of threshold to ensure that those audits continue to happen.
As for not-for-profits and charities across our great land, they always find ways to make things work so they can be, as the member mentioned, accountable and transparent to the public.
Bill Siksay NDP Burnaby—Douglas, BC
Mr. Speaker, I thank my colleague for his review of the discussions that took place at committee. It was very helpful to know the work that went into this stage of the bill.
I want to ask him about some of the things that were not there, the concerns of the voluntary sector. One thing we often heard from voluntary sector people was that they had no opposition to being accountable and transparent in how they were operating their agencies. However, they were concerned about having the skills to do that kind of financial accountability, to get the support for the required financial management. Did the committee have any discussion on that?
Concerns were also raised about some of the complications around advocacy work. Many of the agencies saw this as important, but limitations were placed on their ability to do that. There were complications with the so-called 10% rule of activity that could go into political or advocacy kinds of work.
Concerns were also raised about the complications of establishing charitable status in the first place, how the process took so much time and the complication of that. Were there any discussions about simplifying that process?
Then there has always been the suggestion that volunteers should receive some kind of tax relief for the work they put into non-profit agencies. Did that issue came up in the committee discussions?
Glenn Thibeault NDP Sudbury, ON
Mr. Speaker, I wish the member had been at committee because there were some very good suggestions. There was some discussion relating the smaller not-for-profits, those that have a staff of one or two and base their who organization off the work of their volunteers. Therefore, it would be great if we could get those volunteers some tax relief.
However, we have to be very concerned when we create an act that will be 170 pages long and the ability of one person to review it. Through the committee process, we heard that loud and clear. Hopefully we will continue to bring this forward to the government so when it looks at instituting all of this, it will take that into consideration.
Carol Hughes NDP Algoma—Manitoulin—Kapuskasing, ON
Mr. Speaker, I have listened to my colleague. There are some good points about the bill, but then we still have some concerns about it.
The whole idea of trying to encourage non-profit organizations to come on board, to be profitable at times and to assist the needy in our communities is quite important.
Could he clarify how the government could advocate for better changes in either clarifying or improving the charitable status process? That is very important for us to know.
Glenn Thibeault NDP Sudbury, ON
Mr. Speaker, in committee we talked about how we could look at the not-for-profit act and how we could change that. I cannot give the member an answer for the government because it relates to some of its decisions.
What I can say is the government was looking at ways of making things easier for the small organizations to ensure that if they wanted to go through the process of becoming a registered charity, those avenues would be there. Some of the organizations raised that couple of times.
Siobhan Coady Liberal St. John's South—Mount Pearl, NL
Mr. Speaker, I am pleased to rise today to speak to Bill C-4, an act respecting not-for-profit corporations and certain other corporations.
The legislation has seen several incarnations since first being introduced by the Liberal government in 2004 and makes important modernizations to the regulations governing Canada's valuable not-for-profit sector. While provisions within this bill are modelled on those of the Canada Business Corporations Act, the creation of dedicated legislation governing Canada's voluntary sector will better respond to and address the needs of this country's charities, community organizations and other not-for-profit entities.
Canadians value volunteerism and charitable organizations. On average, each Canadian is a member of four non-profit or voluntary organizations and some 22 million people donated approximately $9 billion to such enterprises in 2004.
Among other things, Bill C-4 eases much of the regulatory burden on non-profit organizations in this country by allowing these organizations a heightened degree of flexibility in how they choose to operate. A major potential benefit under this new legislation enables non-profit corporations to hold meetings electronically as opposed to sometimes costly and less responsive face-to-face meetings currently required.
The new ability to file documents under Corporations Canada electronically may also serve to reduce strain by reducing paperwork and other regulatory burdens currently faced by non-profit entities. Given that the non-profit sector employs some two million people across the country working in some 160,000 not-for-profits, this flexibility to adapt bylaws based on the needs of the specific organization stands to benefit a significant portion of the population.
I am pleased to have had the opportunity to work with other members of the industry, science and technology committee to review this legislation and respond to some of the concerns put forth by stakeholders. Recognizing the importance of getting this long overdue legislative framework right for the nearly 19,000 federally incorporated not-for-profit organizations, it was necessary to ensure that those concerns were heard and addressed through our study of Bill C-4. In fact, a number of issues highlighted by witnesses appearing before the committee have been acted upon through amendments presented during a clause-by-clause review of the bill and have not been adopted and incorporated into this legislation.
Chief among the concerns raised by stakeholders, particularly by the Canadian Bar Association, was the need for clarity concerning important definitions within the legislation. The diversity of the non-profit sector in Canada is a great source of strength but it also poses challenges in balancing the needs of large organizations that solicit public funds with small sporting organizations or mutual aid societies for example, when it comes to setting a new legislative framework.
While there are few differences between how non-soliciting and soliciting corporations are treated under the act, there are rules governing the number of directors required, the filing of financial statements with government and agreements transferring powers within the organization. This is why I and other Liberal members of the committee made it a priority to ensure the distinction between soliciting and non-soliciting corporations was clearly and precisely laid out within the bill.
I am pleased the committee saw fit to adopt an amendment prescribing the test period for determining whether a not-for-profit corporation was soliciting to the corporation's most recent financial period. It was also vital to ensure newly minted soliciting corporations would have adequate time to make preparations for compliance with the more onerous regulations inherent in this classification.
As such, we brought forward a clarification ensuring the change in status would only take effect at the conclusion of the next ensuing annual meeting of the corporation. These changes would go a long way to ensuring non-profit corporations will be prepared for compliance should such a change in status occur.
A further issue of balance with this bill concerns the complexities of what I will call contingency sections of the act. The size and complexity of this bill are largely due to provisions contained in clauses 6 and 7 dealing with debt, trust indentures and receivership, which are situations that likely will never be faced by most of the non-profit organizations incorporated federally.
The inclusion of this complex regulatory road map fills in some of the gaps that currently exist but also enforces compliance on all non-profit corporations in the sector, whether they will ever need these provisions or not. This is a concern for me, as it seems to streamline a process for very few corporations at the expense of many smaller charities, community groups and foundations that will never require these clauses of the bill. The committee agreed that it would be better to offer clear direction to organizations that wished to proceed in this manner than to leave a further regulatory void.
Several organizations, including Imagine Canada, articulated concerns surrounding some rights of members being enshrined within the act itself as opposed to within individual bylaws or articles of non-profit corporations. Some stakeholders felt that the important issue of voting rights of members must be subject to periodic review and change as the mandate and nature of the organization changes, and should not be specified within the act itself.
Bill C-4 does require that each non-profit corporation determine what voting rights will exist for members but does not prescribe the mechanisms for doing so, and authorizes the creation of a class of non-voting members. Should a situation arise where fundamental changes to the corporation are possible, non-voting members would be given the right to vote under this legislation.
According to Industry Canada officials, non-voting members will have the right to vote when, for example, their membership is to be exchanged to another class or their class rights are to be changed; the corporation intends to amalgamate with another corporation; the corporation intends to continue into another jurisdiction; the corporation intends to sell off all or substantially all of its assets; and, if the corporation intends to dissolve. It would seem that these situations would likely be rare. and this is again the case of building in a contingency to ensure appropriate procedures are set out for organizations to follow.
Some concerns surrounding the liability of officers and directors were raised during hearings on the legislation. Boards of directors and officers from many of Canada's charities, foundations and other non-profit entities are often composed of volunteers who dedicate their time to ensuring important causes are furthered to improve the lives of Canadians. At times, some organizations can find the recruitment of these volunteers to be a challenge, as it often means taking on a degree of personal liability and responsibility for the actions of the organization.
Bill C-4 introduces provisions for the due diligence defence for directors and officers, which satisfies many of the concerns raised by organizations intervening on behalf of the non-profit sector.
I am pleased to support Bill C-4, which comes after many years of work and review undertaken by industry officials, advocates in Canada's voluntary sector and the many organizations that made presentations on this legislation.
Not-for-profit organizations provide many of the services cherished by Canadians. Universities, colleges and hospitals across this country provide vital services to their communities and are general regional employers.
In 2003, the non-profit sector accounted for some $112 billion in revenue. Thousands of organizations are supported by over 12 million volunteers, fully 45% of the Canadian population aged 15 and older, who contributed an average of 168 hours each. This totalled 2 billion hours, the equivalent of more than 1 million full time jobs in 2004 alone. Truly, there is no end to the value this sector offers to Canadians.
As a new member of Parliament, it is a pleasure for me to have taken part in the study of this bill. It was impressive to see the balanced approach taken by my colleagues on the industry, science and technology committee in reviewing the legislation. I thank all of my colleagues for their hard work on this matter, for those who intervened and for those who made presentations during the committee hearings. I look forward to seeing this long overdue legislation become law.
Guy André Bloc Berthier—Maskinongé, QC
Mr. Speaker, I am pleased to speak today to Bill C-4, An Act respecting not-for-profit corporations and certain other corporations.
I would like to start by saying that the Bloc Québécois is in favour of this bill. As several of my colleagues have already mentioned, the current act governing not-for-profit corporations is considered somewhat outdated. For the past few years, a number of representatives of community and economic organizations governed by that act have been calling on the government to update the Canada Corporations Act.
I would like to tell this House that before I became a member of Parliament, I worked regularly with several not-for-profit corporations that came under part III of the Companies Act of Quebec's Department of Financial Institutions and Cooperatives. I realized at the time that the people working in these not-for-profit organizations faced a number of challenges. They had to deal with issues such as funding for these organizations, which is a never-ending problem. Often, these people work in various areas of activity, whether it is with disadvantaged people, youth or women or in volunteer centres that provide street worker or mental health services. I am talking about areas with well-targeted clienteles. These people spent hours and hours working in often difficult financial circumstances.
These people were also managed by the administrators of these not-for-profit organizations, community volunteers who worked evenings and weekends and handled the organization's finances, managed staff and looked after community relations. This work is very demanding. I admire all the people who give of their time to help others. In my community, in Berthier—Maskinongé, all these organizations are made up of people with big hearts. That was the theme of this year's National Volunteer Week, and it is worth pointing that out today.
In summary, many people who work in these areas were aware that some provisions of the act were outdated and simply no longer addressed the increasingly complex and diverse demands of today's not-for-profit sector. The law in Quebec has been adjusted. The federal government is now following suit and, with this bill, is trying to make things easier for these not-for-profit organizations by providing a better framework for their actions.
Let us give a brief overview of the background to this bill. Following on a paper published by Industry Canada—my colleague from the Bloc Québécois sits on the Standing Committee on Industry, Science and Technology—titled “Reform of the Canada Corporations Act: the Federal Non-profit Framework Law”, the federal government held a series of round table discussions with a view to preparing the various possibilities for reforming the not-for-profit law.
After those round table discussions, the government felt it was time to make some concrete proposals for a reform of the legislation on not-for-profit organizations.
Since 2002, in fact, there have been a few attempts by the Conservative and Liberal governments to introduce bills, but these have all died on the order paper.
Finally, last January, a bill was at last introduced, the one we are debating today in this House.
In short, the underlying principle behind Bill C-4 is to propose a new Canadian legislation on not-for-profit organizations which would make their administration more effective and more transparent. Transparency and effectiveness are vital to these organizations, particularly the ones I am familiar with, because they are faced with increasing challenges. Day in and day out, they have to deal with the poverty and the ageing of their respective populations.
The underlying principle behind this new legislation would be to take into consideration the financial means, size and objectives of the organization as far as these management mechanisms are concerned.
With this new act these organizations will, I believe, and I am certain my colleagues share my opinion, be able to operate within a more flexible framework with respect to such things as presenting financial statements or setting up by-laws.
For example, the new legislation encompasses: voting procedures, by-laws regulating general meetings, special meetings, regular meetings, and notices of meetings, and quorum. The new provisions will be better suited to not-for-profit corporations in today's reality.
Another part of the bill talks about financial statements. It states that the corporation must make available to its members the financial statements and any report submitted by its public accountant. As we know, not all not-for-profit corporations are required to perform audits. It depends on the financial statements and on the money administered by these corporations. Some not-for-profit corporations manage very small amounts of money and, therefore, are not always required to do an audit. However, when a large amount of money is involved, it is normal for these corporations to have financial statements that meet the criteria of an audit.
That part of the bill provides that corporations must table a copy of their financial statements and of the report submitted by their public accountant to the director, who will then make these documents available to the public.
So, this bill sets more specific operating rules. To this end, the operational framework for NPOs would be similar to corporate governance under the Canada Business Corporations Act.
The new legislation would gradually repeal the Canada Corporations Act and would replace parts II, III and IV of that act.
In addition to significantly clarifying the role of these corporations in our society, both for their members and directors, the bill will also establish defences for officers and directors, in the event of liability.
We must protect the directors who serve on the board of these not-for-profit corporations and who, as we know, do so on a voluntary basis and often with little information on the responsibilities and duties that come with their role within these organizations. We must protect them from the sometime dubious practices that can be used by a member and which have the effect of laying responsibility on all members of these corporations.
I personally believe that the bill achieves that goal. In this regard, it would be important if, at some point, Parliament could look at another issue related to this legislation, namely how to better train the directors who sit on the boards of these not-for-profit corporations.
It is all very well to enact a law that defines the roles and responsibilities of members of organizations, but people are not always informed and do not always have the time to read a law that is 150 or 200 pages long before joining the board of a not-for-profit organization. Often, if we simply look at the mission and objectives of the organization and see a little of the everyday work that is involved in sitting on an organization’s board, they do not always have the time to learn about all the procedures that their role, responsibilities and duties involve, and the relevant laws.
It is the role of government to give the volunteer members who often sit on the boards of these not-for-profit organizations more information. Very little information is provided. I just wanted to point that out.
This bill will also give members of those organizations additional rights, and will thus allow them to participate fully in the governance of their organizations. As well, it will establish a better body to oversee the organization’s accounting, and this is very important. Another benefit of this bill, one that I think is very important, is that it increases public confidence in not-for-profit organizations and their credibility among the general public.
It is important that the people who sit on the boards of these organizations, often as volunteers, and the organizations themselves, which often have few resources for taking action in the community, be perceived by the public as a whole in a positive way.
For example, in my riding, there are often organizations that deal with young people in difficulty or with disadvantaged or illiterate people, and there are many prejudices often expressed against those organizations.
Having a law that can provide more protection for the directors and managers of those organizations is an accomplishment in itself, and it will certainly facilitate the organizations’ work.
Bill C-4 is indeed complex, because it imposes an entirely new framework on not-for-profit organizations, those under federal jurisdiction of course. Organizations under federal jurisdiction and organizations under the jurisdiction of Quebec and the provinces must never be confused. However, this legislation had become necessary here, in Parliament, because the existing law did not reflect our modern circumstances.
The issues this bill addresses are important and it involves major and necessary changes in the way not-for-profit organizations operate.
Bill C-4 involves transparency and accountability, that is, financial responsibilities. At present, the law does not require that detailed accounts of their activities be disclosed. Under Bill C-4, not-for-profit organizations will now be obliged to make their financial records available to their members, directors and officers, as well as the director. That is a step forward.
In more concrete terms, this bill will certainly simplify the incorporation of not-for-profit organizations. Incorporating a not-for-profit organization should be a relatively simple matter. The process should not be surrounded by hard and fast administrative procedures that would make it so that people who came together to create a not-for-profit organization would be reluctant to take action to provide greater support for the community in whatever area or field of activity it might be.
What is interesting in this bill is that the minister will no longer have the right to agree or refuse to allow a group to incorporate a not-for-profit organization.
As I already mentioned, this bill will clarify the duties and responsibilities of the directors. It is important for people who sit on boards to know what their responsibilities, duties and roles are in not-for-profit organizations. This kind of information needs to circulate more freely. My experience has been that people who sit on the boards of these organizations sometimes learn on the job. People show up at the general meeting some evening and end up on the board. They do not always know, though, what their responsibilities are.
More specifically, this bill will set forth defences for managers and directors in case they are held responsible. It is important to protect volunteers who sit on boards against suits from the public, other institutions or other businesses as a result of a purchase or any other situation. I think that the volunteer directors of these not-for-profit organizations should be protected.
The bill will also increase the rights of the organizations’ members and help them participate in the governance of the organizations. These people need to be in charge of what they are doing and have a certain amount of autonomy in the exercise of their duties on boards and in voluntary organizations. The bill provides a certain latitude in this regard.
Finally, the bill provides a better mechanism for overseeing the accounting of these organizations. It is hard to be against that. I think that any organization that receives money and grants should be ready to account to its donors.
In summary, I have taken a good look at Bill C-4 and I think it is a step forward. However, as my colleague in the Bloc Québécois indicated previously, we would have liked to see at least some procedures for classifying the different kinds of organizations. There are no classifications in this bill. Whether it is a charitable organization, an economic organization or a cultural organization, there is nothing in the bill to enable the public or the government to know what kind of organization it is.
Keith Martin Liberal Esquimalt—Juan de Fuca, BC
Mr. Speaker, I would like to ask the member a couple of questions about how we can actually improve on this bill. I think the government needs to hold a public stakeholder meeting to deal with the non-profits. They labour and struggle. They serve the most underprivileged and some of the most desperate people in our country because of the failure of our social programs in many cases. They pick up the pieces. Many of them are run by volunteers who give hundreds, if not thousands, of hours every single year in service to their neighbour. I think the government may want to do a better job of honouring those Canadians from coast to coast who are donating their time, efforts, skills and talents to serve some of the most needy people in our country.
However, apropos to this particular bill, I would like to ask my hon. friend whether he thinks the government ought to again have a public round-table meeting, that it make the tax deductible donations to non-profits equivalent to the tax donations to political parties and that it facilitate the way in which groups can actually get tax charitable status.
For example, the Hospital for Sick Children, with its HealthyKids international program, which is an amazing program, is having real trouble in trying to get tax-free status. It is an absurd situation. I really encourage the Minister of National Revenue to get on that, and that is a message more for the Minister of National Revenue than my colleague.
Guy André Bloc Berthier—Maskinongé, QC
Mr. Speaker, I want to thank my colleague for his excellent question. The financing of not-for-profit organizations is a major concern, particularly those that help people in distress, as my colleague mentioned.
Should there be a tax credit? Should it be easier to obtain charity status so that these organizations can get a tax credit? Indeed, in 1984 and 1985 the Conservatives tightened the eligibility criteria that allow not-for-profits to get charity status. This status is often denied to organizations that are not strictly charitable in nature. This is a way to get charity status or a tax credit, which is important.
Since being elected not so long ago, the Conservative government has cut many programs that provided funds for not-for-profit organizations, such as programs for the voluntary sector, women's programs and literacy programs. When people are declared ineligible for EI benefits, the population becomes poorer, which increases the need for not-for-profit organizations. The government should therefore make it easier to help these people.
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
Mr. Speaker, I first want to congratulate the member for Berthier—Maskinongé for his speech. He gave us a good summary of Bill C-4. It is obvious that he is very well acquainted with the voluntary sector and the structure of not-for-profit organizations. This is very interesting and commendable. I also think that volunteers who work at the local and national levels deserve our admiration.
He talked about a lot of things but I want to ask him a question about financial statements. These have to be made available to members, to the director appointed under the act and to organizations collecting funds.
I would like the member to tell us why, in his opinion, financial statements are useful and should be made available to the public and to members.
Guy André Bloc Berthier—Maskinongé, QC
Mr. Speaker, I thank my colleague for his question. I know that in his own region, he worked in recreational activities, and so he also met many volunteers. He is also aware of the importance of transparency in volunteer organizations.
As I said earlier in my remarks, when we give money to these organizations, it is normal, since this is public and private money, that they are accountable for the money they receive and spend to carry out their missions.
I think this bill strengthens somewhat the moral and legal requirement that these organizations should make their financial statements available to their members. That is one of the reasons we support this bill.
Jean Dorion Bloc Longueuil—Pierre-Boucher, QC
Mr. Speaker, first I would like also to congratulate my colleague for Berthier—Maskinongé on his remarks. He showed his command of the content of this bill, but there is a point on which he could elaborate further, and that is the issue of democracy. I would ask him to comment more on this.
We live in communities where anonymity is prevalent. People want to protect their private life. They do not give their names and addresses to many people, but they do disclose them to the associations they belong to.
Does my colleague think that the provisions of this bill, which require the organization to give its membership list to all members who ask for it, are a step forward democratically, compared to the situation that prevailed in the past?
Guy André Bloc Berthier—Maskinongé, QC
Mr. Speaker, it is indeed important that the ability of not-for-profit organizations to send their membership list to all members be written into this bill. It is important first so that the association knows who its members are; but it is equally important that other members of the association also know who the members are.
Ethics, governance and democracy are now back in vogue. This is as it should be because, more and more, people want transparency and ethics to be part of democracy. These are concepts that must be 100% enforceable, and this bill makes that possible.
Roger Pomerleau Bloc Drummond, QC
Mr. Speaker, my thanks also go to the hon. member fromBerthier—Maskinongé for his overview of the bill that is before us today. As he described, not-for-profit organizations have always faced a number of problems, such as raising funds, finding directors, having countless forms to fill out.
Now it has been decided to update the act. The Bloc Québécois is going to vote for the bill in order to make the act more transparent and to improve governance and make the sector easier to manage.
The hon. member points out that, given the increasing poverty and the increasing age of the population, this is urgent. We know that it is good in theory, but, given that he has worked with organizations on many occasions, what exactly does he think of it in practice?
Guy André Bloc Berthier—Maskinongé, QC
Mr. Speaker, there is still a long way to go in the funding of not-for-profit organizations. The same goes for knowing what information to provide to members working in these organizations about their roles, responsibilities and duties as members. There is also a long way to go in providing more protection for their involvement.
All in all, there is a lot to be done and a lot that could be improved in this bill. Nevertheless, we are going to vote for the bill because it is a step forward for these organizations.
Nicolas Dufour Bloc Repentigny, QC
Mr. Speaker, the Bloc Québécois has repeatedly said that it supports Bill C-4, given that the present Canada Corporations Act has become outdated.
Modernization of the act is certainly a step in the right direction, as has been said several times. The new act would take into account the financial resources and size of the organization in establishing its management mechanisms. It offers a flexible framework for the presentation of financial statements and for the internal rules of the organizations subject to it.
As well, we see a significant increase in efficiency and transparency in the process of incorporating not-for-profit organizations. Replacing the letters patent system by an as of right system of incorporation facilitates the creation of NPOs considerably. Elimination of the minister’s discretion in this regard is essential. All of this will enhance public confidence in NPOs and enhance their credibility in the public’s eyes.
I would like to give a little background to the enactment of the not-for-profit corporations act. The Canadian Corporations Act provides the framework for the incorporation and governance of federal not-for-profit corporations. The kinds of corporations governed under Part II of the Canada Corporations Act (CCA) include religious, charitable, political, mutual-benefit and general not-for-profit organizations.
In recent years some concerns have been raised that the act is outdated and that its provisions no longer meet the requirements of the modern not-for-profit sector. There have been public calls for its reform and in 1999 the federal government’s Voluntary Sector Task Force called for improvements to the regulatory structure that governs the sector. Industry Canada’s proposal to modernize the CCA was part of the task force’s plan.
In July 2000, Industry Canada issued a consultation paper, “Reform of the Canada Corporations Act: The Federal Nonprofit Framework Law”. Subsequently, the department held a series of roundtable discussions in cities across the country to consider the ideas presented in the document, and the various legislative options open to it. Following the suggestions made at the roundtables, the government decided to make concrete proposals for reforming the not-for-profit law.
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 adopted substantially the same direction as the Liberals and introduced Bill C-62. With the hasty election call last September, it died on the order paper, as did a number of other good bills, including the one presented by my hon. colleague to provide a tax credit for young people from the regions who go outside their region to study. This was an excellent bill, which had reached the end of the process and unfortunately, because of the Conservatives’ stubborn desire to trigger an election, died on the order paper. I find this regrettable because at last we had a concrete private member’s bill that could really have helped young people, students, to stay in their region. Because of the hasty election call, it died on the order paper. We will recall that what was uppermost in the Conservatives’ minds was to save their jobs, rather than to save the jobs of workers and young people.
This morning I read in the newspaper that scientists—if I can change the subject for a moment—are starting to leave Canada because of cuts to science and research. We have to set the tone.
I want to get back to Bill C-4. On September 3, 2008, a similar bill was introduced at first reading by the Minister of State (Small Business and Tourism).
Once again, it died on the order paper when Parliament was prorogued last September 4. This was another bill that died on the order paper because of Conservative ideology. The Conservatives wanted to prorogue the House because they were afraid they would be defeated. Twice in six months they tried to save their jobs.
The minister finally re-introduced the same bill on January 28, 2009. This was Bill C-4, which we have been debating all day. The purpose is to propose new Canadian legislation on not-for-profit organizations that will establish a more modern, transparent framework for them to operate within. To this end, the system for not-for-profit organizations will be similar to the system for companies that fall under the Canada Business Corporations Act. The new bill will gradually repeal the Canada Corporations Act and replace its parts II, III and IV.
According to the minister, Bill C-4 will reduce the administrative costs of not-for-profit organizations and strengthen and clarify the rules governing them. More specifically, the bill will simplify the process for incorporating not-for-profit organizations, clarify the duties and responsibilities of their directors, set forth defences that their directors and officers can advance in case they are held responsible for something, increase the rights of the members of these organizations and allow the members to participate in the governance of their organization, and establish a better mechanism for overseeing the accounting of these organizations.
Bill C-4 is very complex. It imposes a whole new framework on not-for-profit organizations. Here is a brief summary of each of its 20 parts.
Part 1 identifies the purpose of the bill and allows for the incorporation of organizations without share capital so that they can carry out their lawful activities. It defines what a soliciting corporation is, namely any organization that solicits funds from the public or a government or any other organization that receives donations from the public or government grants.
Part 2 replaces the current letters patent system with an as of right system of incorporation. After receiving and examining the required documents, the director immediately issues the certificate of incorporation. This will help not-for-profit organizations establish themselves much faster and start providing direct assistance to our fellow citizens.
Part 3 stipulates that these organizations have the capacity of a natural person.
Part 4 states that these organizations must keep accounting records and a list of their members and directors and must make this information available to their members. My colleagues just asked the hon. member for Berthier—Maskinongé and his answer with quite clear. Having accounting records and a list of members will greatly improve the transparency and governance of these organizations. There really will be transparency and not just the impression of it. Part 4 also provides measures to protect the privacy of the members of these organizations. We were discussing this point just a little while ago. It is also very important to keep the membership list private. My colleague from Longueuil—Pierre-Boucher said that with the advanced technologies of today, people need transparency but also their privacy. Bill C-4 covers that part too.
Part 5 gives corporations the authority to borrow, issue debt obligations and invest as they see fit. It also stipulates that corporations are prohibited from distributing their assets to their members, except in furtherance of their activities or as otherwise permitted by the act.
Part 6 deals with the technical aspects of debt obligations and Part 7 deals with the technical aspects of trust indentures.
Part 8 describes the authority and role of receivers, receiver-managers and sequestrators.
Part 9 stipulates that corporations must have a minimum of one director and that soliciting corporations are required to have at least three directors. It also clearly sets out the obligations of directors and corporations as well as the due diligence defence.
Part 10 stipulates that the by-laws set out the conditions of membership, whereas articles set out the various classes of membership and associated voting rights, which makes a clear distinction between the two.
Part 10 also establishes the voting procedure, including electronic absentee voting. It sets out the rules governing the way in which members can submit proposals at meetings, establishes the procedure for calling meetings of the members, including the obligation to give members advance notice of the meeting, and defines what constitutes a quorum.
Part 11 states that a corporation shall place before its members its financial statements and any report submitted to it by its public accountant. As was said earlier, the bill's purpose is to increase transparency and efficiency, and that aim is furthered directly in this part of the bill.
Part 11 makes it mandatory for soliciting corporations to table a copy of their financial statements and of the report of their public accountant with the director, who will then make these available to the public. Thus, donors to these non-profit organizations will know precisely where the money goes.
As members, we are giving a hand up to the corporations in our ridings. In this way it will be possible to see clearly where the money of our very important organizations is going, especially in more difficult times such as the ones we are experiencing currently. We can see how important this is. I attend numerous activities in my riding, which gives me an opportunity to take the pulse of these organizations and see how they operate. This will allow people to concretely see the expenditures and investments these organizations make to give back to the community, which is, to my mind, extremely important.
In Part 12 we see that the level of financial audit that is required is determined by the level of gross annual revenues of the corporation, and depends on whether or not the organization concerned is a soliciting corporation or not. This part states that the public accountant must be qualified to conduct the financial audit while being independent of the organization. The purpose, as you will have understood, is here again to promote transparency. The bill institutes the obligation of placing financial statements at the disposal of members, directors and officers when the organization is a soliciting corporation which solicits funds from the public, and these documents must of course also be made available to the public.
Part 13 establishes the procedure to be followed when the corporation undergoes fundamental changes, including amendments to the articles or by-laws of the corporation, amalgamation, continuance, reorganization or arrangements.
Part 14 describes the procedure for liquidation and dissolution of a corporation incorporated pursuant to the act. It establishes that in cases of dissolution of soliciting corporations or charitable organizations, any property remaining shall be distributed to one or more qualified donees within the meaning of the Income Tax Act, and not to its members.
Part 15 lists the various powers which a court may confer upon an inspector to conduct an investigation, through an order, to follow up on complaints submitted by an interested party.
Part 16 contains provisions regarding the remedies that a complainant can exercise, specifically, the derivative action, the oppression remedy and injunctions. It establishes a defence against the above-mentioned actions and remedies that is based on tenets of faith. A religious corporation can use this defence when it can prove that the act leading to the action was reasonably based on the beliefs of its members. In this type of case, no order is made under the act against the corporation in question.
Part 16 also sets out the offences and punishments for violations of the Act, mainly, with respect to false and misleading statements, and improperly using information taken from a corporation's register of members or other directories.
Part 17 allows for the use of electronic communications between the corporation and its members. We have been talking about this a lot in the Bloc Québécois, and, in light of technological advancements, we believe that this possibility will become extremely important, crucial, actually—emphasis on “crucial”—to corporations' survival. We are now in the Internet age, and it is becoming more and more complicated to reach certain groups, such as young people, who are big Internet users. Electronic communications such as emails would make it easier for organizations to reach and attract them.
Keep in mind that, as the population ages, it will become important over the next few years to attract young people to community and non-profit organizations. Without new blood, these organizations could cease to exist because of a lack of new members to ensure their survival and continued dedication to causes such as protecting the poor. In my riding of Repentigny, Maison La Trace de l'Assomption helps those most in need. It has an incredible team of five directors who do wonderful work for the town of L'Assomption and its most needy residents.
I do not mean that this organization would not be able to find new volunteers, but sometimes the idea that it might experience difficulties recruiting new volunteers touches me personally. Since I am young myself, I understand that ways must be found to go and find new blood, just as political parties must do. The Bloc Québécois does this and has been encouraging young people for years, contrary to the big federal parties who find it somewhat more difficult to do so. My colleague is nodding his head, showing that he agrees with my position. Honestly, we have to help young people to join these organizations and encourage them to volunteer. As someone who has done a lot of volunteering, I know that this work is extremely gratifying, and helps people to mature. It increases a person's self-esteem immeasurably.
To get back to Bill C-4, part 18 sets out the general administrative provisions needed for the application of the act.
Part 19 identifies the passages of the legislation which apply to bodies corporate without share capital incorporated pursuant to a special act of Parliament. It also provides a procedure to revoke organizations incorporated pursuant to a special act of Parliament and associated with a body corporate that was later dissolved.
To conclude, part 20 provides for a three-year transition, for organizations incorporated under part 2 of the act governing community organizations. It also repeals parts II and III of the CCA.
The main issues are subdivided into four categories concerning four different aspects of the changes created by the adoption of this bill. The first classification concerns flexibility and permissiveness. There is no non-profit organization classification system in the Canada Corporations Act. There is no such provision in Bill C-4 either.
I must conclude but I could talk for hours. You can see that I am very interested in this file and very knowledgeable about it, because of the lengthy discussions that took place with my Bloc Québécois colleagues.
We would have liked to see this in Bill C-4.
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
Mr. Speaker, I would like to congratulate the member for Repentigny on his brilliant speech about Bill C-4.
As he pointed out, Bill C-4 modernizes the existing act and makes the system more democratic.
I would also like him to comment on an element he did not mention, but that I am sure he can discuss: the elimination of the minister's discretionary power. I would like him to comment on the fact that the powers are now in the hands of members and organizations.
Nicolas Dufour Bloc Repentigny, QC
Mr. Speaker, I would like to thank my colleague for his excellent question.
The elimination of the minister's discretionary power is an important element. We all know how much the Conservatives like to interfere in everything.
The example I have in mind is the Social Sciences and Humanities Research Council. The Conservatives want to make sure that everyone knows they are funding SSHRC grants, but the grants are exclusively for the study of business and the economy. As I said at the beginning of my speech, scientists, great thinkers, a lot of them from Quebec, are relocating to the United States. Right now, the Université de Montréal is losing a lot of scientists to the United States.
Considering how the Conservatives have been acting for years, I have to say that I am very happy about the elimination of the minister's discretionary power. At least we will have one area in which the Conservatives do not run the whole show. They usually try to control everything. Imagine if the Conservative government had won a majority. Thank goodness the Bloc Québécois was there to prevent a Conservative majority. This is the beginning of a great victory because the Conservatives will not be able to interfere in this area, take control, and impose their own ideology and dogmatism.
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Chairman, I am very happy to rise to speak on Bill C-4, An Act respecting not-for-profit corporations and certain other corporations.
We are indeed at the last stage, in the House of Commons, of a long process that began several years ago. The act governing these matters is completely obsolete. It must consequently be modernized and that is the purpose of Bill C-4. The new act will take financial means into account, as well as the size of the corporation and the implementation of management mechanisms. It offers a flexible framework for the submission of financial statements as well as the establishment of regulations and the structures of the organizations it will govern. There is a considerable increase in the efficiency and transparency of the incorporation process for not-for-profit corporations.
I sat as a member of the Standing Committee on Industry, Science and Technology. We had already begun working on this matter in 2004. This is a very hefty act which demanded an array of detailed analyses. I think that the members from all parties who sat on the committee did their work very well. And consequently, today we have an interesting bill.
The letters patent system of incorporation has been replaced by an as of right system. The incorporation of not-for-profit corporations is greatly facilitated by this procedure. The abolition of the minister's discretionary power in this regard was more than necessary to eliminate the discretion that could be exercised by the minister, which went back to a whole other era. This needed to be corrected.
This will increase the confidence of the public and the credibility of not-for-profit corporations. And we know that the public already has a very favourable view of the nature of not-for-profit organizations. In our work especially, members know that many organizations work to help our citizens and provide different types of support and help their own members. If these organizations did not exist, the state would have to step in instead, in one way or another. From that perspective, it was urgent that the federal act which governs federally incorporated not-for-profit corporations be modernized.
In fact, the Canada Corporations Act, which is the existing act, and will still be in effect until we have passed this bill, provides the frame of reference for the incorporation of not-for-profit federal corporations.
In fact, the types of corporations governed under part II of the Canada Corporations Act include religious, charitable, political, mutual-benefit, and general not-for-profit organizations.
In recent years, some concerns have been raised that the act is outdated, as I was saying earlier. Since 1999, there have been public calls for the act to be reformed. It has been ten years now. A voluntary sector task force created by the federal government called for improvements to the regulatory structure that governs the sector. Industry Canada's proposal to modernize the act was part of the task force's plan.
In July 2000, Industry Canada issued a consultation paper entitled “Reform of the Canada Corporations Act: The Federal Nonprofit Framework Law”. The department then held a series of round-table discussions in cities across the country to consider the ideas presented in the document. That process eventually led to the Liberal government introducing Bill C-21 on November 15, 2004. The bill never made it to second reading.
At that point, we entered a cycle of minority governments, which we are still going through and which I do not think we will get out of for a while yet, in both Quebec and Canada, because the population does not have enough confidence in a single party today to give it a majority mandate. That is especially true in Quebec, where people feel that they have been regularly shortchanged by federalist parties, which have a Canada-wide vision. As a result, they have often put Quebec's interests on the back burner while putting Canada's interests first, and these two sets of interests are not necessarily the same.
So, we are caught in this cycle of minority governments, and we do not know how much longer the cycle will last. In my view, as long as any party aspiring to become the government does not introduce a project that reflects Quebeckers' wants, among other things, the party will not win people's support. Based on experiences in recent years, such as the Conservative party's recognition of the Quebec nation, which was an empty shell and not followed by any other commitments, I think the population has received a very clear message and, as a result, it has not been willing to give such a mandate.
We are now seeing the same thing with the Liberal Party, which is boasting about the fact that it will reform the employment insurance system, when we know very well that that same party is the one responsible for the Axworthy reform in 1994. Even though the Liberals had promised Canadians that they would stop the Conservative reform, instead what we saw was an even speedier reform that hurt the unemployed and had them contributing the most to reduce the deficit. And no one ever returned the favour. I do not think this period is over.
However, in terms of Bill C-4, which is currently before us, this new Canadian legislation on not-for-profit corporations is making its way through the various stages. In this Parliament, we have the opportunity to vote at third reading and send it to the other place. We hope the new legislation will come into force quickly.
I agree with the minister who said this bill will cut administrative costs faced by not-for-profit corporations. That is a good thing, and it will strengthen and clarify the governance rules that apply to these corporations. The only reservation that the Bloc Québécois has expressed in committee and that it strongly defended, although unsuccessfully, is that the bill contains no classification measures. All not-for-profit corporations will be lumped into the same category. I think that constitutes a weakness and that we will be back in this House in three, four or five years to amend the act accordingly. Only then will people see that the Bloc Québécois was right about that.
Overall, the Bloc Québécois believes that this is a good bill that will simplify the incorporation of not-for-profit organizations. Previously, corporations had to obtain letters patent with clear objectives. Now, all they need is articles of incorporation that are recognized. I believe that this will be simpler. The bill will clarify the directors' duties and liabilities. We have seen in the past in this sort of organization that when things are going well, there are no problems. When things are not going well, it is important that each person's liabilities be well defined and that the directors know what they are getting themselves into when they join the board of a not-for-profit organization. There was a need for clarification.
The bill will also establish defences for officers in the event of liability, so that a director's personal property is not at risk. These issues will be clarified in the act, which may motivate more people to get involved in not-for-profit organizations. Our society will benefit, because not-for-profit organizations often fill needs that the government cannot fill and the private sector is not filling either. Consequently, it is appropriate to keep going in the same direction.
The bill will also give members greater rights by enabling them to play a role in the governance of the organization. The liability of members versus directors was not always clear in the old act. These things are clarified in the bill, and anyone who joins a not-for-profit organization will have a clearer understanding of his or her rights, responsibilities and authority and will be able to act accordingly.
The bill will also establish a better oversight and accounting mechanism for corporations. We believe that this will be a great improvement. This bill has many parts that are very complicated, but I would just like to mention a few.
Part 1 outlines the bill’s purpose, which is to allow the incorporation of organizations without share capital for the purposes of carrying on legal activities, and defines the concept of a soliciting corporation. This expression designates any corporation that solicits funds from the public or a government or any corporation that receives private donations or government grants. We can see that this clarification is designed to distinguish soliciting corporations from non-soliciting corporations. I believe that this will be an appropriate clarification.
As I said, the present letters patent system is being replaced with an as-of-right system. Once again, this represents some worthwhile progress. It also sets out the capacity of a corporation as a natural person. This is a simplification as far as the legal interpretation of these matters goes, and will be to the benefit of both members and the corporation itself. A number of more technical aspects are also clarified, for instance the technical aspects relating to issuing debt obligations and trust indentures. These are more technical and more complex matters that would do well to be clarified.
It is stipulated that the by-laws must set out the conditions for membership, and the articles of incorporation the categories of voting rights for each.
There is a section specifically on members' rights, as well as another complete section on complainants and their recourse in the event of such things as abuse, and the possibility of court orders. It establishes a defence based on religious doctrines against the actions and recourses referred to. A religious organization can make use of this defence when it can reasonably prove that the act leading to the court action was based on a tenet of faith held by the members of the corporation. In such a case, the court may not make an order under this legislation against the organization in question.
There is a clear delineation of individual and collective rights, while taking into consideration the charter implications but without this meaning that people will have to take their recourse as far as a charter challenge on each occasion. These clarifications will be welcomed. There is also indication as to how organizations are to communicate with their members electronically, something that was not there before. The act is obsolete and was drafted at a time when there was nothing like the Internet and various other means of electronic communication. It is important that this be included, especially since it will result in significant savings.
There are a number of general administrative provisions as well to ensure that the framework functions very smoothly, but there are still a few questions left untouched. For instance, there is still no classification system, as I have said before. I think that great attention needs to be paid to the application of the law, and perhaps the Senate will re-examine this matter.
There is transparency and accountability. The current law requires non-profit organizations to keep detailed accounts of their activities; however, there is no requirement—as there is under this bill—to disclose this information. With Bill C-4, non-profits must make their financial statements available to their members, directors and officers as well the director. This makes it possible for directors and officers to have better oversight of the corporation's management, for members to monitor the organization's financial position between annual meetings and to ensure that the monies are truly used for the stated purposes and objectives.
We were speaking earlier of the interest in democratization so that members truly know what organization they belong to, what powers they have and how to obtain information. This clarification is welcomed by most stakeholders and organizations. This bill is the result of consultations undertaken in various parts of Quebec and Canada. This is the umpteenth version and one which, I believe, will result in an important consensus in this House.
The current legislation allows anyone to obtain a copy of the list of members of a non-profit organization, and the law contains a list of permissible uses. The new bill would restrict this right to members, creditors and directors. This provision will make it easier for members to communicate, to require directors to keep an up-to-date list of members, to protect the sales of certain types of non-profit organizations, prevent the misuse of such a list and ensure that it is not forwarded to just anyone. We have all received documents inviting us to apply for a certain credit card or program. We wonder where they get their information? On occasion, these lists were provided under this law, which was not specific and did not prohibit this type of transfer of information. That will now be prohibited. That is a useful benefit.
In terms of effectiveness, the former law had a system of letters patent that were very difficult to obtain. Under the law, establishing a corporation was not a right. Now, it will be one and it will be much easier to be approved. In an “as of right” system the establishment of a company is automatically granted. With this major change, the procedure for discretionary approval will disappear.
This is an improvement to the whole of the system and advances its democratization. The incorporation process will be simplified and corporations will benefit from increased flexibility, and a more efficient and less costly system. In that regard, improvements are considerable and well-thought-out.
As regards fairness, we can see that with the new legislation the clear definition of the duties and responsibilities of directors will facilitate the recruitment and retention of qualified people on boards of directors. This was not always the case under the previous act.
The due diligence standards that are being proposed are well defined by the courts. Thus, they offer an established instrument to not-for-profit corporations. This standardizes diligence standards for directors, and the bill takes harmonization with other federal acts into account.
It was urgent that this be done, as the acts that are affected were obsolete and referred to several acts that were no longer in effect or had been modernized.
This too is important: directors and officers are currently exposed to much liability. The new legislation introduces several measures to limit liability, for instance, the incorporation of the organization, which creates a legal entity that can be held responsible; a clear definition of diligence standards; the possibility for the director of defending him or herself by invoking a due diligence defence; new provisions which would compensate the director for costs incurred and costs entailed by legal action pursuant to an unfounded suit or incidents which would, in the opinion of the corporation, justify compensation.
After several years of consultation, this act now appears to us to be one which deserves our support. There will be some specific follow-up to be done on certain aspects of the bill but overall this is a positive piece of legislation. The Bloc Québécois contributed to making this a bill of the highest possible quality. We have arrived at the final stage and I think that the House of Commons will see fit to pass this bill. We will thus have carried out the modernization of the not-for-profit corporations legislation, which will be to the advantage of this entire sector.
Keith Martin Liberal Esquimalt—Juan de Fuca, BC
Mr. Speaker, in my hon. colleague's province of Quebec, some innovative things have been done in early learning. Some of the new science that has come out recently has shown the effects of child abuse and the withdrawal of some of a child's basic needs. This is important in the context of non-profits because many non-profits work toward filling those gaps.
Some of the new neuroscience that has come out has clearly shown that physical activity in children turns on parts of the brain that are involved in learning. It has been found that when a child participates in 30 to 45 minutes of good physical activity, such as aerobics, every day, those parts of the brain are turned on and the children can focus more easily and learn better. It has been found that the outcomes for children in school are profoundly better and more superior when kids have a chance to be physically active. Dr. Tremblay and others in Montreal have been groundbreakers in this area.
Does my friend think the government has a responsibility not only to encourage non-profit organizations to do what they do, but it has a role to play to work with the provinces and learn from what certain provinces are doing superbly?
I would like the member to highlight some of the early learning work that happens in the province of Quebec that other provinces in Canada could learn from.
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Speaker, I thank the hon. member for his question, though I find the question a little far removed from Bill C-4. Certainly, the more not-for-profit organizations that have clear objectives and members who know what they have to do, the more possibilities there will be for those raising funds for good causes such as preventive health programs, and the better off we will all be.
Certainly, in Quebec, very important and interesting measures have already been taken. Everything to do with health is under provincial jurisdiction, of course. Just last week, I had meetings with people responsible for health in my region. They stressed how important it is to discuss prevention.
There is the whole area of curative medicine that must come into play when people are sick. But we also have a responsibility for comprehensive preventive medicine. This is not just the practice of medicine; it is also making each person responsible for his or her own health and making the government responsible—in Quebec's case—for health education. There is the role of physical education, the way in which each individual must be responsible for his or her own heath. We must also make sure that we have all kinds of tools for our young people so that they are able to determine the quality of their own health and so that they can avoid having to resort to curative medicine unless there is no other choice.
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
Mr. Speaker, I congratulate the member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup for his excellent presentation. He spoke to a point that we argued for in committee, the classification of organizations.
In the hon. member's opinion, how would Bill C-4 have been improved if a classification of organizations had been accepted and made part of the bill?
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Speaker, I would like to thank my Bloc Québécois colleagues for expressing that point of view in committee. It should have been part of the legislation but, sadly, it was not. It is not enough to make us vote against the bill, but I do think that it is an important point. The Canadian Bar Association agrees that failure to include a generalized classification system is one of the bill's major shortcomings.
For example, charitable organizations work for the good of the general public by trying to help people who are neither directors nor members of the association. In other words, these organizations have money that they want to make available to a specific clientele. Such organizations are much different from mutualist organizations, which seek to help their own members. If the legislation included this kind of classification, both organizations and the government—in providing services to organizations—would have been able to adopt a much more precise approach.
Without a classification system, all organizations will end up in a melting pot. I believe that, in the end, additional regulations will be needed, but the government and most committee members did not want to incorporate regulations into the legislation. Perhaps regulations will be introduced, but if not, we will be back here in a few years to consider amending the law as a result. I am sure that a classification system would have been a very good move, and I think that the government should have heeded the Bloc Québécois' recommendation.
Roger Pomerleau Bloc Drummond, QC
Mr. Speaker, I want to thank the hon. member for his remarks.
I would like to remind him that, as members, we all know of numerous organizations and non-profit organizations in our ridings that do incredible work. So we have all come across volunteers and seen them working every day. However, during election periods, we have an outstanding volunteer working for us, the official agent.
In my view, he is, in some ways, the ideal volunteer who meets all of the requirements of the new act we have been discussing. The hon. member was just explaining the merits of Bill C-4 and why we will be supporting it.
This bill will simplify the constitution of non-profit organizations. A volunteer agent could be chosen from among everyone in the organization.
It will clarify the duties and responsibilities of the directors. A volunteer agent's role is laid out in the elections act in a way that it is not generally explained to the members of society.
It will establish lines of defence for the directors and officers in liability cases. An official agent's role and responsibilities are very well explained, as are the ways in which he is to fulfill those responsibilities.
It will give members more rights, allowing them to be involved in their organization's governance. We know that the official agent's documents are clearly printed and made public a few months after an election.
It will establish a better mechanism for monitoring the organization's accountability. We know that the financial agent must keep the books according to a specific method and that they are examined twice before being made public.
Can the hon. member tell me if he does not see that by adopting Bill C-4 we are perhaps making the people and volunteers in these organizations and non-profit organizations a little more like financial agents during an election?
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Speaker, my colleague makes a very good case. In fact, we will be establishing a regulatory framework that it is much more clear and precise and one that applies to organizations under federal charter. Non-profit organizations have a provincial and Quebec charter. In this case, the framework will be much better defined. It will result in more volunteers for organizations. When the scope of activity is clearer and more specific, it is much easier to be engaged in an organization.
Modernizing the act will increase the participation of citizens in society through various non-profit organizations. This will be the case for what is truly democratic, such as the electoral process, and also for other types of movements that more closely resemble the type of organization they wish to have.
Our work basically acknowledges the importance of the quality of volunteer work.
Some hon. members
Question.
The Deputy Speaker Andrew Scheer
The question is on the motion. Is it the pleasure of the House to adopt the motion?
Some hon. members
Agreed.