Finance Committee on Nov. 20th, 2018

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

Thank you, Mr. Chair.

Thank you, Ms. Malcolmson, for bringing this amendment forward.

On this amendment, in thinking about it, in the legislation itself, currently in those jurisdictions that would be covered by the legislation—the federally regulated industries that would be covered and those employees who would be covered by this act—they would be able to go to a pay equity commissioner who has the power to administer and enforce the act, to also assist those persons in ensuring that they understand their rights and obligations under the act and, most importantly I would say, to facilitate the resolution of such disputes. I think that is what is important under the provision here in the pay equity legislation that's contained in Bill C-86.

I understand your amendment, but the reason that I would disagree with the intent of the amendment is that with the legislation we get the umbrella of pay equity being implemented, and under the pay equity umbrella you have certain mechanisms at work that employees can bring about if there's a dispute, with the establishment of a pay equity commissioner, which is established under the legislation.

With that, I will not be supporting the amendment. The Canadian Human Rights Act is obviously very important. The Canadian Human Rights Commission is important as such, but at the same time, we have a pay equity act, we have the mechanisms under the pay equity act contained therein, and those mechanisms will allow employees to bring disputes to that and facilitate a resolution to those disputes.

[The Chair, Liberal, Wayne Easter]

Ms. Malcolmson.

[Sheila Malcolmson, NDP, Nanaimo—Ladysmith, BC]

I'll say again, because this is my final opportunity to comment on this legislation and this process, that we have had four decades of fighting this in court. We have lawyers and labour activists who have been on the front line. They have been working hands-on and had great hopes that, as a rationale for delaying this legislation three years in this government and 42 years since it was first proposed by another Trudeau prime minister, we would get it right.

We received this testimony maybe only two weeks ago. The timeline has been so short. This is another amendment that the human rights lawyers who are working daily with human rights cases and pay equity have made. That the member finds it to be inadequate or unnecessary just doesn't fit with the spirit of wanting to perfect the legislation, to make this work and to make it challenge-proof and easier for women.

I hope that the member has had the opportunity to talk to the witnesses directly or ask them some more detailed questions on their submissions. They found repeatedly, in multiple places, that this legislation could be improved. The government hasn't taken up a single one of them. Their concerns were serious: no intersectional analysis, no provisions currently for women in female-dominated workplaces that don't have access to a male comparator, no specialized stand-alone pay equity commission and pay equity hearings tribunal, no provisions as recommended for non-union women, no pay transparency. On this one about Canadian human rights, if the government members can't find it in them to vote in favour of this, then I don't know what happened to the party of the charter, honestly.

I'm very grateful to the organizations that participated in this very truncated process in good will, and I am personally disappointed that my arguments have not been sufficient to actually change a single element of this legislation. I wonder if, as we had hoped, this bill had been stand-alone and sent to the status of women committee or the labour committee, it might have had a better run than it did simply running through the filter of finance.

I say that with the greatest respect, but also with thanks to our labour and pay equity partners and with disappointment that I haven't been able to affect any of the language in this legislation.

[The Chair, Liberal, Wayne Easter]

Okay.

We're ready for the question.

[Sheila Malcolmson, NDP, Nanaimo—Ladysmith, BC]

I would like a recorded vote, please.

(Amendment negatived: nays 7; yeas 1 [See Minutes of Proceedings])

(Clause 425 agreed to on division)

[The Chair, Liberal, Wayne Easter]

There are no amendments to clauses 426 to 440, but if you have questions for officials or anything on them, you're welcome to it.

(Clauses 426 to 440 inclusive agreed to on division)

Thank you, Ms. Malcolmson, for coming and explaining your amendments very thoroughly.

Thank you, officials. Thank you for coming and answering any questions there were.

Coming back to part 1, amendments to the Income Tax Act and to other legislation, there are no amendments on clauses 2 to 16.

(Clauses 2 to 16 inclusive agreed to on division)

(On clause 17)

[The Chair, Liberal, Wayne Easter]

Then we have, on clause 17, amendment CPC-1.

Who is doing that?

Mr. Poilievre?

[Pierre Poilievre, Conservative, Carleton, ON]

Yes.

I think the amendment speaks for itself. I'm supporting it.

[The Chair, Liberal, Wayne Easter]

Is there any further discussion?

Mr. Julian.

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

Thank you, Mr. Chair.

I would actually appreciate some discussion and explanation of the amendment. I'm just reading it:

(a) by deleting lines 27 to 31 on pages 21.

(b) by deleting lines 39 to line 3 on page 22.

(c) by deleting line 21 on page 22 to line 7 on page 23.

(d) by replacing line 22 on page 23 with the following:

“(12) subsections (1), (7) and (10) are deemed”

(e) by replacing line 30 on page 23 with the following:

“(13) Subsections (3), (6) and (11) are”

(f) by deleting lines 1 to 6 on page 24.

That does not speak for itself, I don't think. I would like to get an explanation either from Mr. Poilievre or from the ministerial officials as to exactly what the approach is on this humongous bill. I think we have to narrow in and be very specific on what the impacts are.

[The Chair, Liberal, Wayne Easter]

Who do we have for officials? We have Mr. McGowan and others, just in case there is further clarification required.

Mr. Poilievre, I thought his response was very....

[Pierre Poilievre, Conservative, Carleton, ON]

I thought my explanation was also very self-explanatory, but I welcome the officials to offer technical explanation in addition for members.

The reason we object to this entire section of the budget is that it effectively provides massive tax breaks for lobbyists. It turns the charitable tax credit into a benefit for lobbyists who call themselves charities and have almost no charitable function whatsoever. We don't think that was the original purpose of the charitable tax credit. Therefore, we're proposing amendments to oppose the overall section. We'll vote for the amendment and against the clauses in the budget related to this section.

[The Chair, Liberal, Wayne Easter]

Okay.

I have Mr. Fergus and then Mr. Julian had a question for the officials.

Mr. Fergus.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

What a pity that Mr. Poilievre provided that explanation, because I was about to say that these proposals speak for themselves, which is why I am going to vote against them. But now you have stolen my joke.

Mr. Chair, throughout its mandate, the government has been committed to make sure that charitable organizations will no longer be subject to political harassment because they are faithful to their commitment as they conduct their charitable activities.

A lot of discussions were held. I personally participated in a number of discussions with charitable organizations, especially in Quebec, environmental organizations and organizations fighting poverty. They were all quaking when the previous government was in power. That is why we conducted a study on the subject.

The Minister of National Revenue formed a special committee to look at those issues. All the members of that committee came to the conclusion that amendments had to be introduced to repeal the unfortunate provisions in the legislation passed by the previous government.

That is why I will be voting against the amendments proposed by my honourable colleague.

[The Chair, Liberal, Wayne Easter]

Thank you for that.

I should have mentioned in the beginning as well, just as a matter of clarification, that if CPC-1 is adopted, NDP-1 cannot be moved due to a conflict of lines.

I guess that's important to your point of view, Mr. Julian.

We'll have Mr. Poilievre and then we'll go to the officials, if they would like to add to something to Mr. Julian's question.

Mr. Poilievre.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Fergus made a number of false statements in his remarks. He said that the legislation was enforced by the previous government. Partisan governments do not enforce legislation, governmental organizations and public servants do. The Canada Revenue Agency has been enforcing the legislation. The principle in question is intended to grant tax credits to charitable or not-for-profit groups for activities designed to help the less fortunate or for any other charitable cause. But the goal was not to give money to lobbyists. However, the bill as currently proposed deals with a tax credit that the Liberals want to provide to lobbyists.

When they mention environmental groups, they are talking about groups opposed to pipelines and to jobs for workers and for indigenous communities with resources. Not only do they receive foreign money for anti-Canadian political activities, but the government is also going to give a tax credit to help fund those activities. I find it very unfortunate that the government is supporting interest groups opposed to indigenous peoples and workers in the natural resources sector and other lobbyists working to destroy our industries and the possibilities for our workers.

That is why I am opposed to this. A huge majority agrees with us that we must avoid giving excess tax credits to charitable groups in order to fund lobbyists, whatever their ideology. That is why we submitted this proposal. It's very unfortunate that the government is in the process of helping lobbyists to take unfair advantage of our system.

Thank you.

[The Chair, Liberal, Wayne Easter]

Mr. McGowan, or officials, do you have anything you want to add on Mr. Julian's earlier point?

Go ahead, Peter.

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

Thank you, Mr. Chair.

I'd like you to explain the practical application of this.

If this amendment is passed, what would that mean for the charitable sector?

[Blaine Langdon, Director, Charities, Personal Income Tax Division, Tax Policy Branch, Department of Finance]

The effect of the amendment would be to reverse the changes proposed by the government. The default would be that charities would be able to carry on political activities with up to 10% of their resources. They would still be prohibited from carrying on directly or indirectly partisan activities. We would revert to the existing system.

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

Therein lies the problem. Thank you very much for that explanation. We saw it with the previous government's witch hunt on charitable organizations that were trying to get their point of view across. We have charitable organizations that work very hard on behalf of Canadians. Some are in the environmental sector, as Mr. Poilievre just mentioned, others are in the social sector.

I just came from a press conference with the Elizabeth Fry Society. It is actively working to put into place an administrative structure that doesn't penalize Canadian children who are in irregular situations, whether their parents are homeless or their parents are incarcerated. Currently, the Canada child benefit and the housing first strategy don't apply to those children, and these are the children who are the most disadvantaged.

The work that they're doing in the community to help those children necessarily has a political, though non-partisan, aspect to it. What they're doing is trying to promote the idea that we should be treating every child equally in our country. That's a value that is subscribed to by the vast majority of Canadians. The vast majority of Canadians subscribe to the idea that an environmental organization should actually be able to push on behalf of the environment to ensure, for example, that the government decisions that are made don't have a profoundly negative impact on the environment.

It seems to me that what we have had is a handcuffing of those organizations that are working in the best interests of society. The government introduced some amendments that have been welcomed by the charitable sector, but as you know, Mr. Chair, we've also had major concerns raised by the charitable sector about the vagueness of some of the language, and we'll be coming to that later on under the NDP amendments. I find it a bit perplexing to simply say that we are going to continue to allow Revenue Canada to crack down on organizations that are speaking out on behalf of the social, economic or environmental betterment of Canada.

Mr. Poilievre said his amendments didn't need any explanation, and I disagreed because they are very complex, these particular Conservative amendments. Now that he's explained it, I'm going to vote against it.

What started under the previous government, the Conservative government, was an attempt to muzzle organizations for speaking out for the best interests of Canadians. I don't want to see a country where that happens. I decried it and my party decried it when it happened under the former Conservative government.

The Liberal government has brought forward some amendments, but the vagueness of the language is leaving a big question mark in many people's minds. This amendment would take us back to the starting point, allowing Revenue Canada to crack down on whatever organization it doesn't like, or whatever organization the government of the day doesn't like, which would be a major step backwards.

[The Chair, Liberal, Wayne Easter]

Mr. Poilievre.

[Pierre Poilievre, Conservative, Carleton, ON]

The amendment does not do that. It is clear now that it did require some explanation.

The amendment does not allow the CRA to crack down on any organization it does not like. It allows CRA to ensure that the charitable tax credit is used for charitable purposes. That is the reason the charitable tax credit exists. It has never been the case that Revenue Canada identifies a political organization and says, you can't speak. Rather, it says to charitable organizations that use the charitable tax credit to pay their bills that the resulting revenues they bring in should be used for charity. That is what the charitable tax credit is for. If you want to bring in a lobbying tax credit—anybody who wants to engage in lobbying activities gets a tax credit—then just say so, but don't lie to the Canadian people and tell them it's about charity. It's not about charity. It's about lobbyists and advocates using taxpayers' money in order to advance their political agendas. That's what the government is trying to transform this tax credit into.

Frankly, if organizations that are charitable but have political objectives want to advance those objectives, there's no reason why they can't simply set up a separate bank account, and say, in bank account number one, we have the dollars we've raised using the charitable tax credit so we're going to use that for charity. In bank account number two, we raise money for political advocacy and lobbying, and as a result it's not eligible for a charitable tax credit because it's not for charitable works, so we will use that bank account for lobbying and advocacy. There would be no problem with any organization doing this.

Mr. Julian likes the idea of giving tax credits to lobbyists, because he happens to like the lobbyists who use it, but I'm curious. When inevitably other organizations that he doesn't agree with start to do exactly the same thing, you can bet that the NDP will have a very different view.

As for the government claiming that they're suddenly in favour of freedom of expression and want to defend people's right to speak out, this is the same government that said that soup kitchens and recreational camps for poor people and food banks should lose their summer students if they don't subscribe to the Prime Minister's personal values test. They're prepared to crack down on organizations that don't meet the right ideological and political test—no problem with that—but at the same time they want to give a tax credit for lobbying activities, which thus far have been almost entirely related to organizations that are trying to shut down whole industries in this country and put vulnerable, low-income people, indigenous people and other working Canadians out of jobs.

If that's what they want to run on—the idea of giving a tax break to those kinds of groups—they will have to take responsibility for how that money is used.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Poilievre.

Mr. Julian, I believe you're next on the list.

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

Thank you very much, Mr. Chair.

I just want to read into the record an article from the Toronto Star. The headline is “Why haven't Any Harper-friendly charities been scrutinized”. It's by Edward Keenan. It was published on January 23, 2015. I'll read the following:

It turns out charities in Canada—at least the ones the government doesn’t like—are forbidden from “exercising moral pressure.” As if that isn’t the entire point of charitable enterprises. The absence of the profit motive and of self-interest in those involved in such an organization virtually defines a charity. Without those two things, what’s left is the pressure of morality compelling people to do the right thing.

But that’s illegal for a charity, it turns out.

This news comes to us courtesy of the Canada Revenue Agency, acting on a $13-million mandate from Stephen Harper’s Conservative government to take a close look at charities the government thinks are engaged in “excessive political advocacy.” This crackdown on politicized goodwill most recently busted the do-gooders at Dying with Dignity, who have been wielding contraband moral pressure in the service of their mission to provide information about patient rights, planning for end-of-life-care and the case for physician-assisted suicide. The auditors determined that its sins included “swaying public opinion, promoting an attitude of mind, creating a climate of public opinion” in addition to the already mentioned moral pressure tactics.

Now, to be clear, these charitable advocacy activities are only verboten if they might drive or prevent legislative change. The logic seems to be that tax breaks shouldn’t be used for any activities that might influence legislation. Except, of course, the tens of millions of dollars in tax exemptions and direct subsidies we give to political parties whose direct and immediate goal is to drive or prevent legislative change. Harper has actually been an innovator in this arena, inasmuch as, through “Canada’s Economic Action Plan,” he has abandoned mere tax breaks and the hassles of soliciting donations to spend millions of government dollars directly on advocacy to sway public opinion and drive legislative change.

The difference might be that in the latter cases, it is Stephen Harper himself creating a climate of public opinion and exerting moral pressure to achieve his own electoral and legislative goals. And in the case of charities, it is people who disagree with Harper doing it.

Is that an uncharitable assumption? Well, who has been caught up in the taxman dragnet? Environmental groups, free-expression advocates and the anti-poverty group Oxfam, which was informed that “preventing poverty” was not an allowable goal for a charity group.

Who has not been subject to an audit, at least not yet, that we know of? Well, conservative think tanks like the C.D. Howe Institute and the Fraser Institute, which regularly write policy papers directly advocating legislative change.

Or there's Focus on the Family....

Of course, believing that to be so doesn’t just put me on the wrong side of Canada Revenue Agency’s interpretation of the charity laws, it puts me on the wrong side of this government’s entire approach to leadership. Harper’s government has hunted down and exiled information and arguments that might feed good public discussion and lead to intelligent legislation at every turn—from disembowelling the census through shutting down hundreds of research facilities to a justice minister saying bluntly, “We don’t govern on the basis of statistics, we govern on the basis of what we hear from the public...”.

Harper and his ministers clearly want to hear from a public that is untroubled by research, untainted by statistics and, now, sheltered from the advocacy of pesky charities. The better to shape, it seems, a government that is free from evidence, reason and the pressures of morality.

I think that is the strongest contradiction to what Mr. Poilievre has just put forward, namely, that somehow Revenue Canada would not be penalizing or targeting particular charities and thus we do not need to make the changes that are inadequately and vaguely put into Bill C-86.

I cannot support his amendment.

[The Chair, Liberal, Wayne Easter]

On your quote, Mr. Julian, I'm sure the Hansard folks would want to get a copy of that article, so that they get it right.

Mr. Poilievre.