Good afternoon. My name is Tom Closson and I'm president and CEO of the Ontario Hospital Association. The OHA represents Ontario’s 154 public hospitals, virtually all of which are CRA-registered charities.
We originally requested the opportunity to appear before this committee because we had grave concerns about the effect the proposed salary cap included in Bill C-470 would have on hospitals across Ontario and the largest and most successful hospital foundations. The majority of Ontario's hospitals employ at least one individual who earns more than $250,000 per year. In many hospitals these individuals include physician leaders or physician specialists. In Ontario, approximately 15 hospital foundations pay at least one employee, usually only one employee, more than $250,000.
Hospitals are in the business of providing patient care. Hospital foundations are responsible for raising the funds necessary to support the associated hospitals.
In Ontario, hospital foundations fund two-thirds of the salaries of many hospital medical researchers who are principal investigators. They're also responsible for raising 10% of the funds necessary for major capital construction projects and 100% of the funds necessary to purchase medical equipment like MRIs and CT scanners. If a hospital lost its charitable designation, its foundation could not give the hospital the funds it has raised. If a hospital's foundation lost its charitable designation, the hospital could not receive the funds raised by the foundation. In either case, the result would be devastating for the hospital's patients.
Leading a hospital or a hospital foundation is not easy. Leadership has a big impact on the success. In Ontario, hospitals and hospital foundations have volunteer boards of directors who are responsible for recruiting in-demand medical research and management talent. They also determine appropriate compensation structures and they manage performance. Their leadership has helped to make Ontario's hospitals some of the highest performing in the world. If passed unamended, Bill C-470 would undermine the responsibilities of those boards of directors, which in the case of hospitals have a direct legal relationship to the Government of Ontario. For these reasons, the OHA does not support Bill C-470 as it currently is drafted, but we acknowledge and appreciate the sponsoring member of Parliament's commitment last week to stripping out the salary cap from the bill.
With respect to the proposal to create a salary threshold of $100,000, above which registered charities would be required to publicly disclose the salaries of the top five executives, Ontario's hospitals have no objection to that. As you may know, Ontario's hospitals are already subject to our province's public sector salary disclosure, which requires us to disclose the top compensation for every hospital employee who earns more than $100,000 per year every March 31.
I also understand there has been some discussion here regarding the disclosure of the relationship that some charities have with third-party fundraising companies and that action could be taken through an amendment to Bill C-470. I would encourage the committee to refrain from doing so without additional formal examination of the issue. The operations of charities are complex and sensitive, as are their vendor relationships. I believe a full examination of all of the issues would be beneficial before action is taken by legislators.
Let me sum up by saying that the Ontario Hospital Association would have no objection to Bill C-470 if it were amended to strip out the salary cap or include a public sector requirement for the top five executives earning more than $100,000. That said, we believe that the Canada Revenue Agency already has sufficient authority to properly police the charitable sector, and we remain unclear about what substantial new benefit even an amended Bill C-470 would provide to the public.
Thank you for your time today, and I look forward to questions.