Bill S-222 (Historical)

Effective and Accountable Charities Act

An Act to amend the Income Tax Act (use of resources)

This enactment amends the Income Tax Act to permit charities to provide their resources to a person who is not a qualified donee, provided that they take reasonable steps to ensure those resources are used exclusively for a charitable purpose.

Effective and Accountable Charities Act

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

moved that Bill S-222, An Act to amend the Income Tax Act (use of resources), be read the first time.

Mr. Speaker, it gives me pleasure to rise today on behalf of Bill S-222, an act to amend the Income Tax Act.

What this bill would do is fix a problem due to the archaic legislation in the Income Tax Act that restricts the ability of Canadian charities to do good work around the world. By reducing bureaucracy and redundancy, this bill will seek to provide greater accountability while also giving charities in Canada the ability to do greater work, unfettered by excessive regulation and bureaucracy.

Once again, it gives me great pleasure to introduce this bill, and I hope all members will support it.

(Motion agreed to and bill read the first time)

Foreign Affairs and International Development

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Madam Speaker, I move that the third report of the Standing Committee on Foreign Affairs and International Development, presented on Friday, February 26, be concurred in.

I will be sharing my time, Madam Speaker.

I appreciate the opportunity to address this important report of the Standing Committee on Foreign Affairs and International Development, which relates to international development and to the situation globally in light of vulnerabilities created in the context of the COVID-19 pandemic and the Canadian response to those events. This is a four-part study and the committee has decided to present interim reports on each part of the study.

Earlier this week, the second report was tabled, which is very interesting. It contains a joint supplementary report among all the opposition parties, the Conservatives, NDP and Bloc, highlighting, in particular, the plight of Canadian children who are detained in northern Syria. That is the second report as far as this COVID study.

The report I am requesting concurrence in is the third report of the committee.

The first report in this study deals with a different set of issues. It deals broadly with vulnerabilities created by the COVID-19 pandemic and Canada's response to it.

In the Conservative Party, we recognize and appreciate the important role that international development plays. First and foremost, our engagement with respect to international development is an expression of our belief in universal human dignity and of our commitment to the advancement of justice. It is a core principle for us, recognizing the importance of engagement in the area of international development and stemming from that basic motivation to seek the advancement of justice, especially for the world's poorest and most vulnerable.

We also recognize that strategic advantages come from international engagement, and a recognition of the strategic dimension should not supersede the commitment to justice that is involved. We recognize that in a world where hostile revisionist powers are increasingly using the language of aid to exert greater influence and to advance their autocratic objectives, our engagement in open-handed friendship with the peoples of the world in a way that expresses our commitment to justice, freedom, autonomy and human rights is the right thing to do. It also has strategic advantages for us.

Our party has also been very clear in articulating a commitment to not reduce aid levels and in articulating a commitment that emphasizes partnership in international development. For too long there has not been enough attention to the people who are struggling to develop and improve their circumstances, really as the heroes of the stories. The heroes of the stories are not those from developed countries giving resources. The heroes of these stories are the people themselves who have autonomy, who have choice, who seek the expansion of their own rights and abilities. We can support them in the effort to remove those barriers.

When I look at the particulars of the report in front of us, we heard from many excellent witnesses, and many important issues were raised as a part of that study. I want to focus on three issues that come out of this report. The first one I want to address are aid levels.

Recommendation 8 in the report calls for the government to effectively be more transparent and to articulate its intentions with respect to aid levels as a percentage of gross national income. Generally speaking, the international standard for measuring commitment to international development is how much countries can contribute as a percentage of gross national income. This metric is important because some people like to talk about their commitment to aid in terms of nominal dollar value. However, I think all members of the House understand, or should understand, that as a result of inflation, the value of a dollar gradually decreases over time and also that a country's capacity to contribute shifts as a result of gross national income.

This is why the general standard with respect to international development is to assess the commitment of countries, of governments, as a percentage of gross national income, not in raw dollar numbers. Even if somebody is over time contributing slightly more in terms of raw dollar numbers, in substance they may be contributing less.

When the government talks about international development, it says that it is increasing aid level amounts. While that may be true in nominal dollar terms, that is not true as a percentage of gross national income. Aid levels over the years, since the Prime Minister took office, have been cut in terms of a percentage of gross national income. The consistent levels under the last Conservative government, but also the government of Brian Mulroney, were higher than they were under Liberal governments, measured in the way these things are measured, as a percentage of gross national income. The Liberals like to talk about their commitment to international development, but, in fact, in real and meaningful terms, they have not really been where they need to be.

The other thing to note, though, about this measurement is that when there is a dramatic drop in gross national income, that can lead to the increase in apparent contribution in aid levels measured as a percentage of gross national income. Although we have been critical of the government for this cut in aid levels as a percentage of GNI, we do not want it to achieve this level by simply presiding over significant reductions in our gross national income. As a result of its failures on the economy, frankly, there is a risk of doing this, that instead of increasing our contribution to the world, we would be increasing the apparent contribution simply by seeing our gross national income go down, and that is not a particularly good thing either.

This report calls for the government to be transparent about what its plans and intentions are with respect to aid levels as a percentage of GNI. Unfortunately, we have not seen that transparency, and we did not see a commitment to that transparency in the government's response to this.

The second issue I want to talk about is direction and control. Direction and control is a structure by which charities are required to be in full direct and control of monies that they receive to maintain the qualification of those resources as part of their charitable status. Canadian requirements around direction and control are relatively unique in the world. Other countries emphasize that charities have to be accountable for the resources they spend. Being accountable for those resources does not mean they have to be in total control of how those dollars are spent.

Let me make this concrete. If a Canadian charity is working on a project in a village somewhere overseas, the gold standard in terms of development would be to give as much autonomy and control over that project to local people and have the international organization, the Canadian charity, come along as a partner and supporter, recognizing the need to build and support autonomy for the local community with respect to its delivery of this program.

The direction and control requirements that the CRA imposes are not only extremely expensive with respect to the requirements around compliance, they effectively take dollars away from international development by requiring charities to spend more money on tax lawyers. They also run counter to the values of local autonomy and partnership that are supposed to be part of what effective international development looks like.

The Conservatives have been consistent in calling for reforms to the direction and control system. I have asked the minister about this. I have also specifically raised the question of Bill S-222 from Senator Omidvar, a bill that seeks to reform the system.

I call on the government, again, to articulate its position, and there is a strong unanimous recommendation in this report for the government to, as quickly as possible, reform the direction and control system.

I wanted to talk a bit about COVAX, but maybe I can get to that in questions and comments.

Budget Implementation Act, 2021, No. 1

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Madam Speaker, I appreciate the opportunity to ask the parliamentary secretary a question that directly relates to his area of responsibility.

This pandemic is global in scope, yet the budget missed an opportunity to reform onerous direction and control regulations. Direction and control regulations are unnecessary red tape that reduce the resources our critical international development organizations can bring to the front lines to help the world's most vulnerable.

I asked the Minister of International Development about reforms to direction and control. She said it was not her primary responsibility. Because this would involve changes to Canada Revenue regulations, I would like to hear clearly from the parliamentary secretary why reforms to direction and control were not included in this budget. Does the government see the need for reform of direction and control regulations? What is the government's view on the Senate bill from independent Senator Omidvar, Bill S-222,which proposes one way of reforming those direction and control regulations?

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you, Mr. Chair.

Thank you, Minister.

In its last report, this committee denounced the direction and control regime and called on the government to immediately reform it. We unanimously recognized that direction and control requirements impede important international development work and perpetuate colonial structures of donor control.

Senator Omidvar's Bill S-222 proposes to replace direction and control with a system that emphases resource accountability. As we all know, however, private member's bills generally generally face a long and uncertain journey, even when they have wide support.

I'd like to ask, then, whether the minister agrees with this committee that direction and control is an impediment to effective international development work and should be reformed. What is the government's view of Bill S-222? And is the government contemplating their own legislation on this?

Minister, in the interests of managing my time, I'll give you two minutes to respond on direction and control before I go on to other topics.

Go ahead.