Finance Committee on Nov. 6th, 2018

[Bill Schaper, Director, Public Policy, Imagine Canada]

Thank you, Mr. Chairman and members of the committee, for giving us the opportunity to be here today.

As the national umbrella for the charitable and non-profit sector, our comments are limited to those portions of Bill C-86 that propose changes to how charities are regulated through the Income Tax Act. Clause 17 of the bill proposes to place a renewed and welcome emphasis on registered charities fulfilling a charitable purpose with specific ramifications for an organization's public policy activities.

As members of the committee may be aware, much of how charities in Canada are regulated dates back to laws passed in the era of Queen Elizabeth I and judicial interpretation of those laws in the centuries since. Organizations can be deemed charitable if they fall under one of the four so-called heads of charity and if what they do furthers their charitable purpose.

The Income Tax Act establishes the conditions under which charities can be registered for the purposes of issuing tax receipts to donors and for other benefits that registered status provides them. The Canada Revenue Agency, through the charities directorate, enforces the requirements of the ITA.

The system is far from ideal as we try to apply 400-year-old rules to modern circumstances. Over the years, the Income Tax Act and guidance issued by the CRA have attempted to keep up. The result has been increasingly complicated attempts to define and establish parameters for the individual activities in which charities might engage. We have guidance on issues as broad as fundraising, investing assets, business activities and until now, so-called political activities by registered charities.

In many cases, ITA provisions and the associated guidance have moved away from the jurisprudence that focuses on organizations fulfilling a charitable purpose and has placed an emphasis on whether individual activities taken in isolation are themselves charitable. This leads to inconsistencies between the common law and the Income Tax Act. Bill C-86 specifically supports charities' engagement in public policy work.

Charities have long engaged in public policy development and dialogue. They're often in a unique position to recognize the impacts of government policies, or the lack thereof, on the populations they serve. Because they are legally required to work in a non-partisan way towards purposes that are deemed for the public benefit, they play a key role in advocating for change in that they can take a long-term view of those issues.

A number of significant policy advances achieved under governments of all stripes have been due, in part, to charities identifying issues before they become mainstream, proposing solutions and advocating for change. Just a few examples include the work that MADD has done in shifting public and legislative attitudes towards impaired driving. Environmental charities worked with the Mulroney government to successfully combat acid rain. The work done by the Canadian Cancer Society, the Heart and Stroke Foundation and many other health charities led to workplace smoking bans and other reductions in exposure to second-hand smoke. Charities were also at the forefront advocating important social policies like the original national child benefit or registered disability savings plans.

A few years ago, a focus was placed on charities' involvement in public policy debates, specifically, their so-called political activity. New reporting requirements were implemented and an audit program was announced in a federal budget and carried out by the CRA. This created uncertainty for those charities who play a role in working with governments on public policy issues.

Last year, the consultation panel appointed by the Minister of National Revenue made a number of recommendations. Included in those was one to remove the distinction between the types of policy work carried out by charities and to remove the hard limit on portions of those activities. Bill C-86 would legislate the changes recommended by the panel.

We know that there are concerns in some quarters about making these changes, so we want to emphasize a few points. Charities must still work exclusively to fulfill a charitable purpose, that is, a purpose that meets the requirements of the common law and is in the public benefit. Bill C-86 just allows them greater flexibility in how they do so.

Organizations that have a political purpose remain ineligible for registration as charities. The CRA has always applied this test, rooted in common law, in registration decisions and will continue to do so. Organizations that exist solely to seek changes to laws and regulations would fall under this category. Finally, charities must still operate in a non-partisan manner.

We note these changes are also in line with reforms that have already occurred in countries like the United Kingdom, Australia, Ireland and New Zealand, all of whose charity laws share the same origins as ours and all of whom have undertaken fundamental and wide-ranging modernization efforts in recent years.

We support the Income Tax Act changes proposed in Bill C-86 as they pertain to registered charities and we hope that it is only the first step in what we believe is a much-needed conversation about modernizing charity law and regulation in Canada more broadly.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Bill.

From the National Association of Women and the Law, we have Ms. Beavers.

[Suki Beavers, Project Director, National Association of Women and the Law]

Good afternoon, and thank you for the opportunity to speak on the subject matter of Bill C-86 on behalf of the National Association of Women and the Law.

I think most of the members of this committee are familiar with NAWL, which is an incorporated, not-for-profit feminist organization that promotes the equality rights of women in Canada through legal education, research and law reform advocacy. We work on our own and in collaboration with other women's and equality-seeking organizations to impact public policy on a wide range of issues.

I'd like to begin my comments today by congratulating the government for prioritizing action to advance women's rights and gender equality in Bill C-86, particularly in relation to division 18, which establishes the department for women and gender equality; the pay equity act, included in division 14; and the Canadian gender budgeting act, included as division 9.

I'll just say a few words very briefly on the pay equity measures that are included in Bill C-86. We've been calling for pay equity legislation for decades and simply want to reiterate that pay equity is a human right and the government has international and domestic obligations to eliminate the pay equity gap. However, as NAWL is a member of the Equal Pay Coalition that you heard from earlier this morning and we support all the positions taken by that coalition, I'm going to focus my comments today on the establishment of the department for women and gender equality.

We welcome the creation of a full department. Feminist groups have been calling for the elevation of Status of Women to a full department for decades now. We applaud the decision to include a strong preamble in this act that highlights Canada's international and domestic obligations to respect, protect and fulfill the rights of all women in Canada. The retention of women as a primary focus of this elevated department is an important recognition of the ongoing impacts of the historical and systemic sex-based discrimination that women in Canada continue to experience in all aspects of our lives. We applaud the explicit adoption in this bill of an intersectional feminist analysis and approach to advancing substantive gender equality for women in all of our diversity.

I want to turn now, though, to our two key points, which are about the importance of ensuring there will be an adequate and appropriate funding guaranteed to ensure the full implementation of the gender equality components included in Bill C-86, which includes funding for the independent women's movement and the need to ensure more meaningful consultation in the law-making process with independent women's groups.

As members of this committee will no doubt be aware, after the change in the mandate of Status of Women, which was introduced by the previous federal government, NAWL and many other feminist and equality-seeking groups were defunded. Many, including NAWL, were forced to close their operations. These were very challenging times for feminist and equality-seeking groups. We faced not only defunding, but prohibitions on advocacy and challenges to our charitable status. Many feminists and equality-seeking organizations faced similar fiscal and organizational challenges and the landscape of feminist and social justice work was eroded significantly, with severe consequences for women and equality, including the dismantling of significant achievements and knowledge.

I reiterate this because it is not just history. The impacts of those cuts remain significant today. However, the good news is that we are beginning to recover and rebuild our capacities and our feminist networks, but this will take time and investment—and I focus on investment. Many organizations, including NAWL, remain underfunded. We cannot yet meet the demands for our feminist legal expertise, or that are required to rebuild feminist legal capacities and advocacy in other feminist organizations, and rebuild our coalitions.

We're very appreciative of the project funding that Status of Women Canada is now providing and the new capacity-building grants that have just opened up for women's groups; however, these do not and cannot replace the need for a restoration of core funding to independent women's groups. We urge the new department for women and gender equality to include core funding in its fund modalities, as was recommended in the 2005 report of the FEWO committee, “Funding through the women's program: Women's groups speak out”.

On the topic of funding, there is no question that this new department must receive additional funding to implement what is clearly an expanded mandate. This is not a change in name only. This is a new mandate.

The gaps in funding and capacity of women's groups, when coupled with the incredibly short timelines for engagement, make it nearly impossible for meaningful engagement in law-making, including in relation to this bill. For example, as you all know, Bill C-86 was tabled on October 29. We received an invitation to appear before this committee on Friday afternoon, and here we are this morning, on Tuesday. This is clearly an insufficient period of time to analyze such a complex bill. Even if the legislation to establish the new department had been tabled on its own, rather than as part of this really complex omnibus bill, this would have been insufficient time.

On the issue of meaningful consultation, we are also advocating for the establishment of an independent advisory body comprising groups that lead on critical women's rights issues and gender equality issues to provide advice and feedback to the department of women and gender equality.

I'd like to finish by saying that it's been a pleasure to appear before the FINA committee again, after more than a decade. We look forward to this committee's facilitating of the reinstitution of core funding for feminist and equality-seeking groups and to an expansion of the time frames and the mechanisms provided for engagement in law-making processes. Both are required for meaningful engagement by feminist and equality-seeking groups in law-making processes such as this one, which are critical for the future of our country.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Beavers.

We're turning to Oxfam Canada, with Ms. Sarosi, Policy Manager.

Go ahead, Diana.

[Diana Sarosi, Policy Manager, Oxfam Canada]

Thank you so much.

Dear committee members, thank you for the opportunity to present Oxfam's views on Bill C-86.

At Oxfam Canada, we put women's rights and gender justice at the heart of everything we do, both here at home and in our work with some of the poorest communities across the planet. As such, we know that women are vastly overrepresented in the bottom rank of the economy. Nowhere in the world do women earn as much as men for work of equal value. Women shoulder three to 10 times more unpaid care work than men do, and they are disproportionately represented in the lowest paid and least secure jobs.

This is true in Canada as well. Women make up 70% of part-time, casual and temporary workers, and 60% of minimum wage earners. The gender wage gap persists, hovering at 32% on average, and as high as 45% to 55% for indigenous women, racialized women and women with disabilities. Women do two to three times more unpaid care work than men do, and the labour force gap between men and women remains close to 10 percentage points.

Federal budget 2018 saw some major investments and measures meant to advance gender equality. Bill C-86 now ensures that the budget announcements translate into legislative action. I would like to offer thoughts and recommendations for two acts covered in the bill: the new department for women and gender equality act and the Canadian gender budgeting act.

There are many more measures in the bill I could address; however, the nature of omnibus bills is such that it makes it difficult for stakeholders to review all elements in detail and provide substantive comment. This has serious potential to stifle democratic engagement and should be considered in light of the government's desire to meaningfully engage civil society.

On the department for women and gender equality, Oxfam congratulates the government for turning Status of Women into a full department. Canada has a ways to go to close the gender gap, and a full department mandated to do just that is a significant step in the right direction.

We are pleased that the department's mandate includes a strong intersectional lens, recognizing the full range of diversity in sexual orientation and gender identity or expression. At the same time, we must not lose sight of women's particular challenges and barriers in fulfilling their social, political and economic rights. We hope to see the department retain the strong focus on advancing women's rights.

Considering the current political climate around the world, this legislation is timely. The women's rights movement remains underfunded and too many organizations are scrambling to provide services, without having access to core funds to sustain their operations. Project-by-project funding is not sustainable in delivering quality programming. Whether advocating in favour of comprehensive sexual health education in Ontario, or standing behind women's rights advocates in Saudi Arabia, a department that will dedicate resources to supporting the strength of the women's movement is an excellent investment. We encourage the new department to consider how it can learn from and help Canadian organizations connect to the global women's rights movement, recognizing the universality of challenges women face the world over.

At the same time, the department must continue to build the capacity of all departments to deliver policies and programs based on gender analysis, and work to advance gender equality. While capacity is growing, it is important that gender analysis is grounded in the reality of women, and particularly the most marginalized ones. It is important that capacity building includes hearing from a diverse range of women and ensuring they have access to policy-making processes.

It is for these reasons that Oxfam would like to see a significant increase in the department's resources, to an amount of $100 million a year, with a significant amount of the department's budget going directly to resourcing the women's rights and feminist organizations, and core funding for these organizations.

On the Canadian gender budgeting act, Canada is long overdue for gender-budgeting legislation. Oxfam applauds the government for finally legislating gender budgeting, ensuring that no budget plan will ever be tabled without a robust gender analysis of all the measures in the plan.

We are pleased that the gender analysis of the budget will be made public and that gender budgeting will apply to both the taxation as well as the spending side of the budget, including transfers to other levels of government.

We recognize that it will take some time to meet the gold standard of gender budgeting. We therefore recommend that the government work closely with civil society to strengthen its capacity and ensure greater participation of women in all their diversity in the budget process. The government should strive to apply a feminist approach to gender budgeting and ensure that women's voices and experiences are at the heart of budget and decision-making processes. Gender budgeting is not merely a technical tool to assess differential impacts but a means to promote gender equality in both process and outcomes. We call on the government to establish an advisory council on gender budgeting that includes diverse representation from women's rights organizations and non-binary persons.

I also want to remind committee members of the recommendations we made earlier as part of Oxfam Canada's budget submission. We hope the finance committee will also take leadership to ensure that pre-budget consultations strive to advance gender equality. This can be done by ensuring that at least 15% of witnesses are women's rights organizations and by providing guidance to encourage that all budget submissions to do their own gender-based analysis.

In closing, I would like to highlight that Oxfam endorses the views presented earlier today by the Equal Pay Coalition on the pay equity act.

Thank you again for the opportunity to present today.

[The Chair, Liberal, Wayne Easter]

Thank you, Diana.

The bells are ringing, which means we have a vote in about 29 minutes. I would suggest that we go to four questioners for four minutes per round. That would get four questioners on.

Mr. Sorbara, you have four minutes.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Mr. Chair. I'll get right at it.

To the Canadian Credit Union Association, we as a committee undertook a study on bank and financial institution sales practices. That was followed up by a report by the FCAC. I know that most credit unions in Canada are regulated at the provincial level. Nonetheless, they serve Canadians from coast to coast to coast.

I want to get your feedback on the division within the BIA ensuring that Canadians know that their financial institutions have sound banking practices and, more importantly, sound sales practices.

[Martha Durdin]

We support the direction in which the bill is going in that regard and the work that FCAC is doing. We're also in the process, as I mentioned, of putting in place a self-imposed consumer code that credit unions would adhere to. It would include things like access to basic banking services, acceptable sales practices and business practices, a third party complaint-handling process, and governance and accountability measures. Those are the kinds of things credit unions would adhere to and would be in line with where the government is going on consumer....

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Martha.

To Nancy at Equal Voice, I've been blessed for the last two years to have an Equal Voice daughter. I actually have two daughters of my own, so I guess this is the third one; she's been working with us.

In this BIA legislation, we have a department that's been set up for women. We have pay equity for the first time, with legislation coming forth. We heard last night at committee that currently in the federal public service, the gap is 6¢ or a little bit less, at 94.1¢ and it's 88.5¢ for federally regulated workers in various sectors.

I think we are making a ton of progress. I was actually surprised by the earlier committee participants and their lack of enthusiasm for a lot of the measures contained in the BIA, because I think we're making a darned amount of progress. If you look globally and compare us relative to a lot of countries, I think we are leaders in this file. There are others who are sometimes first movers, but we are definitely leaders nonetheless.

I want to get your comments on the material contained in this BIA that we have produced for moving the feminist lens and gender equality file forward.

[Nancy Peckford]

Obviously I think you are signalling to so many young women out there that by virtue of establishing a new department for women and gender equality that you're really elevating the focus. I think the concern historically has been that the previous, the outgoing department, if you will, did not have the kind of capacity to provide appropriate public service direction. Advice to cabinet itself was beleaguered, in terms of being able to effectively champion gender equality across the board. I think the elevation of the department is huge.

I echo the concerns around making sure that the investment is there, so that it can be the most tenacious champion possible. We're obviously extremely encouraged by the efforts and by the investment.

On the gender budgeting act, I was just reviewing the committee report from 2008. There was a very comprehensive report undertaken by the House of Commons status of women committee. They outlined seven steps to undertaking gender budgeting, as discerned from global learning. I would recommend that you take a close look at some of those measures.

Obviously the focus on women in leadership and closing the gap, including the pay equity gap, signals to a whole new generation of women that anything is possible, and that their participation across the economy will be both welcomed and leveraged to its fullest extent possible. I know that the Daughters of the Vote's first cohort is watching very closely as to what their prospects are in the coming years and decades ahead.

I would also say that the investments in the women's programs specifically allow for some of that not-for-profit collaboration that is required. It is true that some of the administrative and operational pieces remain not fully covered under this current arrangement, but I would see that as a work in progress. From our perspective, we are very encouraged that the mechanisms we've all recognized were absolutely necessary and waited for over time are now in the process of being fully realized.

[The Chair, Liberal, Wayne Easter]

We'll have to cut it there, Nancy.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you.

[The Chair, Liberal, Wayne Easter]

Mr. Kmiec, the floor is yours.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Thank you, Mr. Chair.

A few witnesses mentioned that you had difficulty appearing on such short notice. I truly regret that.

There was a programming motion that was passed by the other side that basically cuts us off by November 20 for the clause-by-clause. If I hadn't mentioned it, Mr. Julian would have done it, so I thought I would do it too.

It is a very big omnibus piece of legislation. Both Mr. Julian and I have different ways of dealing with it. I have a binder. I think he uses elastics, because it's the only way to bring it around. There are many different parts.

I will focus on Canadians for Tax Fairness. You said “digital forward" design. We had department officials yesterday and the committee has been taken with this issue.

Could you tell me a bit more about your view? What are you thinking about with digital forward design?

[Toby Sanger]

In terms of the amendments to the Canada Business Corporations Act, some of the language suggests that the registry would just be held by the corporation, and that any replication of it in other forms would not necessarily be verifiable in that way.

We've had some conversations with law enforcement and financial industry experts. There's been quite a lot of progress in terms of developing a digital format for that. If this could be done in a digital way, so that it could be shared also in terms of the financial industry with the reporting entities on it, then that would reduce the compliance costs and presumably make it more efficient as well.

There are other provisions in the BIA that allow digital signatures in these ways.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

You also mentioned having greater access for different regulators. Who do you imagine should be added in terms of gaining access to the registry?

[Toby Sanger]

This legislation is silent in terms of sharing that information with reporting entities, and the reporting entities are largely in the financial industry. There's the question of whether that would be possible or not, and there's the question of which legislation has precedence on that.

I think the committee is going to be discussing this later in terms of the proceeds of crime act, but it would be good if that were explicit in terms of how this information can be shared with those other reporting entities in that way and how it can be shared in digital formats and not just in terms of a record that's kept with the corporation.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Okay.

Finally, you mentioned the poverty reduction act. We spent quite a bit of time on it yesterday with officials. I think you said that there are 51 words. It's a short little piece. It almost looks like a news release.

Have you had time to look at its contents and its enforceability in any way? If this were a government goal or if they wanted to make it an actual document.... I think the words used yesterday by the official were that it was a concrete way for parliamentarians to keep government accountable. I asked him what in here makes it a concrete way to keep them accountable, because they use the word “aspires”, which is unusual in legislation.

I don't see any enforceability, do you?

[Toby Sanger]

Yes, there is an enforceability. I absolutely applaud the government for bringing forward the more detailed plan that they had before on this, but once you get to.... I also applaud the initiatives in the last budget in these areas. I think it was an historic budget.

My concern is that the legislation is extremely short and very thin and that future governments or other governments could interpret this in any way they want. It would be good to have something more concrete in the legislation in terms of what the targets are and how the reporting is done, not just in this area but also in terms of the gender budgeting.

[The Chair, Liberal, Wayne Easter]

Thank you. We'll have to end it there.

Greg, you may get one question.

Mr. Julian.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you, Mr. Chair, and thanks to our witnesses.

What I gather from your testimony, which is very important, is that you are raising broad concerns about the scope of this omnibus legislation—which is in direct contradiction to what Mr. Trudeau promised back in 2015—in that there's not enough time for a reasoned review.

Ms. Sarosi, you mentioned how this stifles democratic engagement. I think the committee certainly is hearing you. This is absolutely inappropriate in terms of how the government is trying to ram this through, even more so when we come back to the very disturbing testimony we heard this morning around the pay equity provisions of the budget bill.

I'd like to go to Ms. Beavers and Ms. Sarosi on this. This morning we heard that what this actually does is put forward unconstitutional provisions. We were told that women will have to go back to the courts because this bill has been badly botched in its present form, and that for women who work in part-time or temporary situations—precarious work—it actually lessens the provisions that existed prior to the bringing forward of this omnibus legislation.

Do you share the concerns we heard from the pay equity coalition this morning about how deeply flawed this bill is? Do you believe that we should take the time to fix all the provisions in this bill that are flawed?

[Diana Sarosi]

Thank you, Mr. Julian.

Yes, as I mentioned, we endorse the views of the pay equity coalition, and we share their concern on the ways that some of the provisions within the bill are not reflective of the spirit of what we're trying to achieve.

With that, I also want to say that it's taken us so long to get here. It's been a really long uphill struggle. We want to see pay equity legislation, and we want it to be as strong as possible. As the pay equity coalition mentioned, we are very happy to work with the committee in making some adjustments to the bill, but ultimately it's time to have a pay equity framework in place.

[Suki Beavers]

Thank you.

We are also part of the pay equity coalition and support all the positions that were put forward by the coalition in terms of the concerns with some of the specific provisions, but we also applaud the measures to finally introduce pay equity legislation after such a long period of time.

I have nothing further to add, except to say that some of the specific concerns that were raised by the pay equity coalition we think can be adjusted during the remaining process that we have before us. In particular, I'd like to turn the committee's attention to the importance of ensuring that an intersectional analysis is included in the pay equity bill. This would allow for consideration of the ways in which women experience multiple and intersecting forms of discrimination, how this results in pay equity gaps for them, and how these gaps can be rectified in the bill.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you very much. That is important testimony.

Mr. Schaper, I'd like to go to you. We've been examining the bill. Some people have raised concerns about the definition that is yet to be clarified with CRA around any indirect support for or opposition to a political party. Of course, that transgression would end the charitable status of a charity. Some people have raised concerns around what that could mean in terms of an environmental charity objecting to the Liberal government's purchase of a pipeline, for example.

The CRA has clearly not acted in the public interest on the disability tax credit and on benefits. Do you share any concern at all that until we get a very clear definition from the CRA, this may actually boomerang against charities that are actively working on behalf of the causes they champion?

[Bill Schaper]

We need to remember that the existing provisions in the Income Tax Act also include language about direct and indirect partisan support. The concept itself isn't new, and it's been in the guidance before.

That being said, there has been an increased emphasis on making sure charities are acting appropriately when they engage in public policy activities, and it is probably reasonable to expect that with the 10% limit taken off, there may be that.

The consultation panel actually advised removing the references to indirect partisan activity. I have the quote here, if you'd bear with me for one second. The language they used was “removal of the prohibition on ‘indirect support’, given its subjectivity”. We think what's in the bill is significant progress, but if members wanted to look at that bit about indirect support—