Finance Committee on Dec. 6th, 2010

[The Chair, Conservative, James Rajotte]

You have one minute.

[Joan Jardin]

This invasion of privacy, particularly in rural or smaller communities, is unjustified. Of course I do want to reiterate the fact that it could also cause increased risk for people in certain fields. For example, in rape crisis centres and domestic abuse shelters, workers are often anonymous to increase their personal safety. To the extent that they fall under the disclosure requirements, they would lose this anonymity and could be put at risk.

Any reporting system is a problem. We're opposed in principle to a compensation cap, but that's been talked about. And of course there's always that index, and once it's put in it's very difficult to change. Lack of consultation has been a problem. And frankly, especially since we don't always deal with the big charities.... We deal with the people we know, and for over 74,000 people in Kingston, just one in two people in Kingston have used the agencies of the United Way. Let's not make their work harder. Let's actually let them spend their time working on the actual agency and program that they want.

[The Chair, Conservative, James Rajotte]

Thank you. Thank you very much for your presentation.

We'll start members' questions with Mr. Pacetti.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you, Mr. Chair.

Thank you to the witnesses for appearing.

Ms. Jardin, I think you hit the nail on the head in your presentation, saying that we don't want to dismantle the whole class. Unfortunately, that's the consequence that happens when you have a few bad kids in the class, right?

[Joan Jardin]

No.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

The innocent ones sometimes pay the price.

I heard the presentations, and I think some of the organizations here are doing a good job. I can't say specifically which ones. I have my own personal opinion. But I think some of the presentations are a little bit disappointing, I have to say, because all we're asking for is some transparency and what we're asking for is some help here. I'm not going to speak for all the members, but my feeling is we're all on board here, and we're going to try to make this a better bill and we need your help. If you don't want to help, we're going to make it a better bill based on what parliamentarians think, and I don't think you want that.

We have disclosure. I understand what you're saying. We have disclosure, but the disclosure is in ranges. We don't want ranges, we want exact amounts. That's been clear.

The T3010B does not allow for details. The CRA officials were here last week. The testimony was public, so you must have read the minutes from that. The T3010B is not appropriate.

Somebody mentioned they want government to decide what is reasonable for salaries. I don't think we want that either. I think we want donors to decide. Organizations are benefiting from government subsidies, directly or indirectly. So we want the donors to decide. CRA does not have the ability to audit all the organizations. I'm not going to tell you what the stats are because it's kind of horrendous.

No one here has said that charities or people working in the charitable sector should not get paid. No one here around the table has said whether you should be getting $1 or $1 million. No one has said that. What we're saying is that we want transparency. The CRA definitely does not have the tools, and in the end that's what we're trying to do.

Somebody spoke about minister discretion, so if somebody could send us a recommendation in the next 24 hours of what they would like to see for the minister to have discretion.... But the last thing you want is for a minister to have to pick and choose which organizations should disclose and which ones should not.

The escalator clause: again, if somebody has wording, I would appreciate that. You could send them through the clerk.

The security issue: we've heard some arguments. I'm not going to get into the details, but you have to explain what the security issues are going to be. Again, provide us with a recommendation that you would be comfortable with.

I have a recommendation that I want to get your opinion on. Albina changed her bill slightly, so we're going to just focus on the executives who receive $100,000. What I would propose is to add—I'll read the whole thing—the name, job title, and annual compensation of the five executives or employees with the highest compensation, provided it exceeds $100,000 annually, of any corporations related to the registered or previously registered charities.

I got this from a Conservative member who was substituting. I have no problem saying I plagiarized it or I'm taking it over. There are some charities that are using registered incorporations, so we'd like to include those.

Does anybody have a problem with that amendment or recommendation?

[The Chair, Conservative, James Rajotte]

Mr. Blumberg.

[Mark Blumberg]

Yes. I'm not really sure what that means. The charities have relationships with different entities, either as non-profits or for-profits, and this was referenced last Monday. The CRA was a little perplexed, I think, because there was no specificity. Are we talking about social enterprise here, or are we talking about captured charities working for fundraising organizations? It's not clear what the issue is.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

My understanding is that rather than having a director or a person receiving a salary, he or she is getting a salary through an incorporated entity.

[Mark Blumberg]

Okay.

So in many of the charities, especially small charities, when you see administration or fundraising costs of zero, in large part there's a generous business person who's basically paying all the costs. If you're saying you want to have greater transparency and you want to know when people are doing that, to have that come in so that when businesses provide any support, for example, to charities, it certainly sounds like an interesting idea. However, it's going to really mean that you're going to have to take the regulation that applies to charities and extend it over to non-profits and also to for-profit entities. I'm not opposed to that at all, because I believe in transparency.

The other point I would just make is that we have—

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

It's the disclosure of the expenses. It's not the disclosure of the revenues; that's a different side.

[Mark Blumberg]

Are you talking about a corporation spending the money?

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

The charity is paying someone. Rather than disclose a salary, they're going to find another way to pay somebody indirectly what they can't do directly, meaning they're going to spin it through an incorporated company.

[Mark Blumberg]

This current piece of legislation talks about an executive or employee, so if that person is acting as an important—

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Or related corporation.

[Mark Blumberg]

You're adding “or related corporation”. I think again it would helpful if one understood exactly what the issues are. From what you're saying, I gather the issue is that you're worried about maybe paying a company that will do fundraising, perhaps, or do some sort of charitable service. Then that's going to mean that one is going to require full disclosure of every amount that charities potentially pay. It's going to create all sorts of unintended consequences, and I think the basic idea here is—as a number of people have mentioned—that before one adds things that result in all sorts of other negative externalities, one should consult on that.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

I was going to give Mr. Berger a chance to step in.

Mr. Berger.

[Ken Berger]

To avoid the disclosure of the CEO's salary, we have seen situations where charities will have the leader either as a contractor or in some other non-profit corporation, so it has been used as a tool to hide salaries. That is a way some organizations will try to avoid that particular scenario I've just described.

[Mark Blumberg]

In that very scenario that was mentioned, it's very clear that the legislation covers the executive.

[The Chair, Conservative, James Rajotte]

Thank you.

I'm afraid Mr. Pacetti's time is up. We'll have to move on.

Mr. Carrier, please, you have seven minutes.

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

Thank you.

Good afternoon, ladies and gentlemen.

I'm going to start by speaking to the representative of Imagine Canada. Your presentation disappointed me somewhat, in view of the fact that you represent all charities, I believe.

You say you are in favour of transparency, but you're reluctant when it comes to disclosing salaries. You say that may violate privacy and that the publication of specific details jeopardizes the safety of certain individuals.

You cite the example of people working in international development who often find themselves in some of the most dangerous places in the world. So you cite very specific situations as an argument.

Let's consider that argument. If a security problem arises for people working in the international development field, I believe that's more a consequence of political actions that are taken, not actions based on a specific salary.

That disappoints me somewhat. It seems to me that you didn't make enough of an effort to put yourself in the shoes of donors, of people who have to make donations to organizations. All those who say they oppose this—and that's somewhat the impression this gives me—are protecting the interests of their organizations, and that's normal. However, I believe you have to put yourself in the position of people who have to give.

A number of organizations deplore the fact that donations are declining in Canada. They want to increase tax credits in order to promote donations, to help people give more. Everyone we consult in this field wants transparency. They at least want to be informed and not to be kept in the dark.

I'm going to let Mr. McCreesh continue.

[Don McCreesh]

Perhaps my comments were misinterpreted, sir. Imagine Canada is fully supportive of disclosure. We want more disclosure, more transparency--not just salaries, though. One of the issues is this focuses only on salaries. Charities and organizations have a number of costs.

We've been working on creating a set of standards for the sector. It's going to become a program where people volunteer and sign up for governance, financial accountability, and transparency sectors. Most of the organizations here today are working with us to do this, and we support what's in there for disclosure. My comments were that there are just two caveats, and they're going to apply to very few people. Just make sure there's an escalation clause so it stays relevant in the years ahead and there are some safety and security.... There will only be a few people, I'm sure, but we need to make sure they're protected.

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

I read in your presentation that you represent 1,400 organizations across the country.

I'm going to link my comments to those my Mr. Blumberg, who represents fund-raising professionals and who says he has 3,100 members in Canada. So that's much more than Imagine Canada.

I wonder if Imagine Canada is—

[Mark Blumberg]

These are individuals.

[Don McCreesh]

We are organizations.