Evidence of meeting #57 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was charity.
A recording is available from Parliament.
4:05 p.m.
Conservative
4:05 p.m.
Conservative
Shelly Glover Conservative Saint Boniface, MB
Thank you, Mr. Chair.
I'm going to continue on in that vein and allow Ms. Bahen to respond to that question.
4:05 p.m.
Managing Director, Charity Intelligence Canada
I think that debate matters. I think what Canada has to be very proud of is its free debate. I believe that organizations, whether for-profit or not-for-profit, should be engaged in that debate. The donors we work with do support political parties, do support not-for-profit organizations that may be involved in advocacy, and I believe that is fine. I think that for every cause you have, there's going to be a donor pool. As long as those donations are voluntarily given, I would like to see a level playing field, where the fact that one would support one type of organization that is political, let's say a political party, shouldn't, in my opinion, receive preferential tax treatment to supporting Greenpeace.
4:05 p.m.
Conservative
Shelly Glover Conservative Saint Boniface, MB
I think the question was a bit different, but thank you for your answer.
I want to ask Mr. Blumberg to continue addressing some of the suggestions from his submission. I know you ran out of time, Mr. Blumberg, but there were some other suggestions that I thought were very interesting, and I'm hopeful they will make it into our process of examination for report. The pages aren't numbered, unfortunately, but number two in your other suggestion area talks about requiring charities to demonstrate, like in the U.K., that they are active and actually have a public benefit. Please explain what you mean there.
4:05 p.m.
Lawyer and Partner, Blumberg Segal LLP, CanadianCharityLaw.ca
In the U.K., since 2006 when they had their new Charities Act passed, one of the things it did was say that every charity every year would have to demonstrate that it had a public benefit. Currently, the rule is that if you're applying for charity status, for the first three heads of charity, which is advancing religion, or advancing education, or relief of poverty, you don't actually have to show that you have any public benefit. Only with the fourth head of charity, which is other purposes beneficial to the community that the law regards as charitable, do you have to demonstrate that there is a public benefit.
4:05 p.m.
Conservative
4:05 p.m.
Lawyer and Partner, Blumberg Segal LLP, CanadianCharityLaw.ca
How do you demonstrate that? Basically, you would be showing how you are helping a sufficient segment of the public with your activities, and for most charities it's actually very simple to demonstrate it. If you're a food bank and you're handing out food to people who can't afford it, we can all understand how that would be beneficial to a segment of the public, and that's not really that hard.
4:05 p.m.
Conservative
Shelly Glover Conservative Saint Boniface, MB
So it's no different in the U.K. than here when our charities are expected to report on their activities.
4:05 p.m.
Lawyer and Partner, Blumberg Segal LLP, CanadianCharityLaw.ca
No. The only difference is there you actually have to show that you have a public benefit, whereas here you don't. Now, I'm saying that was just when you applied to be a registered charity. But on an ongoing basis there's no requirement to have a public benefit. Basically, I think the U.K. model is wonderful in that it encourages charities to actually tell the public every year in their statements, “This is what we do that's beneficial to the public.”
4:05 p.m.
Conservative
Shelly Glover Conservative Saint Boniface, MB
I see. You're right, when you apply for charitable status here, of course, you have to meet the criteria, but I understand what you're saying, it's on an annual basis.
I'm a bit enthralled by the two suggestions that you've made. There's the ability to disclose non-compliance to Canadians, which I agree with you, and I think it might address what Ms. Bahen said about the 69% of Canadians who have some distrust for charities, and there's also the non-profit organizations, who would have to take the tax form, and once it's filled out, it becomes available publicly. I would like the charities to tell me whether they agree with your suggestions, and if not, why not.
Could the Food Banks and Ms. Dodd and Mr. Cloutier tell me, do you agree with those suggestions, and if not, why not?
4:05 p.m.
Conservative
The Chair Conservative James Rajotte
There's about one minute, so maybe you could be very brief in your comments.
Mr. Pegg.
4:05 p.m.
Director, Policy and Research, Food Banks Canada
I would certainly say it's not going to hurt to have greater attention to existing oversight of charities in Canada. You want to have the resources in place—
4:05 p.m.
Conservative
Shelly Glover Conservative Saint Boniface, MB
I only have a minute, so all I want is this. Do you agree with the suggestions? Yes or no.
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President and Chief Executive Officer, Canadian Diabetes Association
No, but we certainly support increased transparency.
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Vice-President, Finance and Operations, Women's College Hospital Foundation
And we support increased disclosure as long as it's a level playing field and all participate equally.
4:10 p.m.
Conservative
Shelly Glover Conservative Saint Boniface, MB
Would you do me a favour? Look at the suggestions. If your organization decides this is actually something you think would be in the interest of this committee to suggest in its report, please let us know.
Thank you.
4:10 p.m.
Conservative
4:10 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
Thank you very much.
Ms. Bahen, you said that your organization did a survey of donors to determine their reason for giving. And when they were asked the question, “Why did you give to a charity, was it the tax break or from the goodness of your heart?”, how was that phrased?
4:10 p.m.
Managing Director, Charity Intelligence Canada
We didn't do the surveys. The submission has the resources, so we've pulled together all the different surveys that we've read and found.
4:10 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
Has it occurred to you that if you ask somebody, a philanthropist, “Why did you give $100,000 to a local hospital foundation?”, they may say, “It was from the goodness of my heart”, and they probably would not say it's because of the tax break?
4:10 p.m.
Managing Director, Charity Intelligence Canada
Absolutely. When they ask donors, there are many reasons for why people give. Maybe it was a hospital that helped them, but at the bottom of the list every single time is tax incentives.
4:10 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
But what I'm saying is, if you ask donors, even though tax incentives may play a pivotal role in their ultimate decision to give, they're highly unlikely to say that this is the reason they're giving. You would agree with that. From a psychological perspective, very few of us will impugn our motivations to that extent.
My other question is this. You've said that your studies have found that two of Canada's top 100 charities are effectively conducting fraudulent activity. Which ones?
4:10 p.m.
Managing Director, Charity Intelligence Canada
They were Hedac and Malvern Rouge, which was a hijack situation, where individuals come to a local charity...and it went from $140,000 in donations one year to—I haven't got the number—about $60 million the next year. It's a hijack situation.