Finance Committee on Dec. 6th, 2010

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

The members you refer to, Mr. Blumberg, are fund-raising professionals; they aren't necessarily representatives of organizations as such, are they?

[Mark Blumberg]

No. Actually it's broader than that. Many of them are professional fundraisers, but there are also professional advisers, accountants, lawyers, and others who are interested in fundraising.

Many people in the charities sector are not only involved with one thing like running a charity or fundraising or doing charitable activities, but they also do a mix of things.

We just had a conference in Toronto with 1,000 people for three days, and it was a mix of different people who are working in charities. Many people, fortunately or unfortunately, have to deal with fundraising, whether they like it or not.

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

Is your organization as such also registered as a charity, or are you simply contract professionals working with organizations?

[Mark Blumberg]

I'm sorry, I'm not sure if I understood that. I'm actually with a law firm. I'm a volunteer here, and I'm on the Association of Fundraising Professionals' government relations committee. We basically are volunteers who are interested in public policy that relates to charities and issues relating to charities.

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

However, you represent professionals who work for philanthropic organizations, don't you?

[Mark Blumberg]

Yes, that would be a lot of the people who are involved, correct.

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

Is your association registered as a charity? Would it be directly concerned by the bill?

[Mark Blumberg]

No, I don't believe the association is a registered charity, and it wouldn't be affected. It's the individual members who would be affected and all the charities they're involved with.

In many cases, it's not fundraisers who are receiving the higher salaries, it's people who are involved with running very complicated institutions or medical doctors, researchers, and others. In some cases it could be fundraisers, but in most cases, or many cases, it's not going to be fundraisers. It's going to be other people, their compatriots and co-workers, who are going to have to deal with this issue, yes.

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

When you say that the bill would have very negative consequences for the work of those organizations, you mention hospitals, universities, people who perform professional duties within the organization—

[The Chair, Conservative, James Rajotte]

You have one minute left.

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

—without necessarily being involved in fund-raising.

So you don't believe in judgment and transparency, that is that information could be disclosed; you don't believe that people could judge the salary of each person. You think that salaries are simply, regardless of people's positions... You believe that the impact would be negative.

[Mark Blumberg]

What I would say is that there are huge possibilities for advancing transparency in the charitable sector.

I'll give you an example. For 80,000 non-registered charities that are non-profit organizations, there is zero transparency about their work. That's 80,000 organizations in Canada that have to file a form, many of them a two-page form, but CRA is forbidden to disclose it because the Income Tax Act under section 241 prohibits it. That's something this committee could look at at some point and think about. These documents are being filed. There are 80,000 non-profit organizations that are not registered charities, but CRA is forbidden to disclose it.

The other point I would make is that one of the issues is that there's about six billion dollars' worth of charity-gifting tax shelters that I'm sure CRA has advised you about, which is one of the biggest problems the charity sector has. CRA is forbidden to say anything about those individual organizations until they lose their charitable status, again because of section 241, which are the confidentiality provisions of the Income Tax Act.

[The Chair, Conservative, James Rajotte]

Thank you. I'm sorry, we do have to cut you off. We are over time.

We'll go to Mr. Wallace, please.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair.

I want to thank you and the clerk for putting together the panels today. I know that there was some pressure because of the number of groups that wanted to appear, and you did a fantastic job. I want to thank you for that. You are the gold standard, by the way.

I have two quick points, then I have a question. On the part we heard from this panel and the panel before about security issues, my colleague here, Cathy, has pointed out to me on her machine here that in health, you have to post salaries of over $75,000 in the nursing sector. There are almost 2,000 nurses here with salaries of over $75,000. These nurses work in all different areas, not just in hospitals. They also work in halfway houses and women's shelters and wherever. It's a hard pill for us to swallow that there is a security issue on the transparency piece. It does happen, and I don't think it has caused that much trouble.

I will be bringing an accelerator clause to the meeting next week.

My next point is that this is why I'm not a big fan of private members' bills. I think they do a great job. Albina's bill got you here and got us talking about the issues and the problems of transparency and other issues, but it's down to one clause.

Most of us, when we have a bill to deal with, have a whole binder, with background information, consultation, and so on and so forth. This is what? It's an eight-clause bill that is down to one. It's done a great job of making the issue apparent to us in terms of there being issues with transparency. I think there are, as we heard from the previous panel and from this panel, other things we could be working on to make the charitable sector more efficient and more effective and delivering better for Canadians and the charities they're trying to serve.

My personal opinion is that a private member's bill is not the way to do this. It does bring it to our attention. I will likely be supporting the one clause that's left in it, but I think there's another private member's motion to force us, as a committee, to look at bigger, broader issues in the charitable sector. I think that's where we should be going.

My final question is for our friends from SickKids. I know that you mentioned that you're a SickKids mom. Well, my mother was at SickKids when she was a child. Her doctor just passed away last year.

[Patsy Anderson]

Was that Dr. Salter?

[Mike Wallace, Conservative, Burlington, ON]

Yes. Dr. Salter was her doctor. So I just want to thank SickKids for the work they've done over the decades they've existed.

We're here partially because of what happened at SickKids, or at least because of the news about what happened at SickKids. I want to give you an opportunity to tell us about it from your perspective and to maybe set the record straight, as people would say. There was a newspaper article about salary and so on. I want to give SickKids an opportunity to clarify for us, for our education, what actually was the issue and how it was resolved.

[Patsy Anderson]

Thank you very much.

I welcome that opportunity, because as I mentioned earlier, we had a leader with a very complex employment agreement. It was a difficult situation to get across when we were asked about it by the media a little over a year ago.

What I would say is that our IRS filing, which we filed in late September of 2009, disclosed that for the prior president of the SickKids Foundation, the number on our 2008 filing was $2.1 million for the departure of that leader. In addition, there was an annual salary figure and other smaller items, which added up to $2.7 million. This was a number that was picked up by The Toronto Star after they looked at our IRS filing.

The first thing I think it is very important for the entire committee and my colleagues at this end of the table to know is that we did not pay a salary of $2.7 million. This number was a composite. It included annual salary, benefits, elements of incentive compensation, and other contractual obligations over a period from 2003 to 2010.

[Mike Wallace, Conservative, Burlington, ON]

That's seven years.

[Patsy Anderson]

Yes, it's seven years.

I would add that I had the opportunity to sit on the search committee in both 2003 and in 2009 in selecting the foundation executive to lead SickKids Foundation. We thought very big in 2003. We knew we had to raise the level of the foundation and its support of the Hospital for Sick Children to maintain this wonderful hospital as a world leader.

In the five years before we selected that leader we raised $227 million, and in the five years after we selected that leader we raised $489 million. The board was very happy with the performance of that leader, and we believe we did the right thing. I think really it's a board that is very dedicated to the excellence at the Hospital for Sick Children, and right across their foreheads every day is the question, what is the best thing for SickKids? We knew we could no longer sustain the excellence of our research institute and world-leading equipment if we were only raising $40 million a year, so we thought big and we hired a foundation executive who raised the bar significantly, so that we raised $489 million during his time there.

[Mike Wallace, Conservative, Burlington, ON]

Thank you.

Do I have any more time?

[The Chair, Conservative, James Rajotte]

You have abou thirty seconds.

[Mike Wallace, Conservative, Burlington, ON]

This is just a clarification concerning what Mr. Chong was talking about. There is an organization, and I'll give you a good example. I won't name it. They have the same address as the charity and they claim that all their profits go to the charity. So they are in business, the individuals are collecting salaries out of the side that is the business, and there's no control on how much salary they're collecting and how much profit they make. They're working off the name of the charity, in his view.

That's exactly why I think we should have a bigger, broader discussion on what we should be doing in the charitable sector than a little amendment on a one-clause bill.

Thank you.

[The Chair, Conservative, James Rajotte]

It's going to have to be a point of clarification.

Monsieur Mulcair, s'il vous plaît.

[Thomas Mulcair, NDP, Outremont, QC]

Thank you, Mr. Chairman.

I mostly agree with Mr. Wallace's opinion; we need more. It's not because we need to do something else that we shouldn't at least do that now. In my view, the bill that Mr. Wallace describes as being virtually reduced to a single clause, will nevertheless be a first step for the public.

Mr. Berger, I wanted to say that you've now replaced my former favourite image for explaining to people what causality means. From now on, I'm going to have your buffaloes and your text messages. My former one was to explain to people that it's not because every time there's turbulence in a plane the “fasten your seat belt” light goes on that the “fasten your seat belt” light actually causes the turbulence. But yours is better.

I thank you for the lucidity and the clarity of your responses.

[Ken Berger]

Thank you.