Evidence of meeting #49 for Finance in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was charities.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Greg Thomson  Director of Research, Charity Intelligence Canada
Kate Bahen  Managing Director, Charity Intelligence Canada

1:15 p.m.

Bloc

Rhéal Fortin Bloc Rivière-du-Nord, QC

Mr. Chair, I have one final question. You didn't tell me that it was my last question just now.

1:15 p.m.

Liberal

The Chair Liberal Wayne Easter

Do you want a supplementary? Okay, we'll allow it, although we're well over.

1:15 p.m.

Bloc

Rhéal Fortin Bloc Rivière-du-Nord, QC

Thank you, Mr. Chair. That's kind of you.

My final question goes to Ms. Bahen and Mr. Thomson.

In the light of all this, and with your expertise and your knowledge of the issue, if you had had a recommendation for the government before it gave the contract to WE, what would that recommendation have been?

1:15 p.m.

Liberal

The Chair Liberal Wayne Easter

Could we have a quick answer, Mr. Thomson?

1:15 p.m.

Director of Research, Charity Intelligence Canada

Greg Thomson

We recommend that all donors, all funders should ideally take a look at our website and see our assessment, but also ask their own specific questions and, if they are so inclined, take a look at the audited financial statements and make their own assessment of what is going on with the organization.

1:15 p.m.

Liberal

The Chair Liberal Wayne Easter

We have Mr. Julian, followed by Ms. May.

Mr. Julian, go ahead.

1:15 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

Thank you very much, Mr. Chair.

I would like to go back to the issue of transparency and WE's involvement in activities using private, for-profit companies.

According to an article in today's La Presse, WE Charity had no intention of providing services in Quebec. Instead, it wanted to hire the public relations firm NATIONAL to do that work. That is one more curiosity in this entire curious scandal.

I have two questions for you. First, when you evaluate not-for-profit organizations, do you often see government funds move from a charitable organization to a company that makes profits from them?

Second, when you evaluated the contract you mentioned just now, the one that made it possible for money to go to other companies associated with WE, was the firm NATIONAL Public Relations clearly mentioned as one that would be making a profit from this government money?

1:20 p.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

I would just say that this is part of the entire issue we've been dealing with over these last five weeks. I have not read today's news about this, and there is so much new information coming out that we have not processed yet. You know more about the Quebec situation, and nationally, than I do. We have learned more about speaker fees than we were told by WE management. We are learning more information all the time.

Government funds for for-profit entities inside the charity.... I have not seen that before, sir.

1:20 p.m.

Liberal

The Chair Liberal Wayne Easter

This is your last question, Mr. Julian.

1:20 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

Thank you.

Of course, the other aspect of the question involves a statement by the Prime Minister, who said that he had done an in-depth evaluation of WE, and there was no other possibility. It was either offer them the program or not offer it at all. In other words, only WE was able to do it.

However, the president of the Public Service Alliance of Canada has clearly stated that the public service could and should have done all the work.

As regards bilingualism and the fact that WE was not able to manage a national program of this kind, does your organization also check whether charitable organizations are able to provide services in both the country's official languages?

1:20 p.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

No.

I will add that one of the concerns in assessing the ME to WE Foundation in the U.S. three weeks ago was that it was engaged with corporate sponsors and the advertising of the corporate sponsors. The idea was that if you buy this box of garbage bags, the money will go to WE Charity, but it was interesting to me that the contract wasn't signed by WE Charity; it was signed by the ME to WE Foundation in the U.S.

We saw this pattern of a partner thinking they're contracting with one of the entities, but then there's a different name on the contract and the money flows to a different entity. I really questioned whether the corporate sponsor in the U.S. was aware that the contract was not with WE Charity U.S. but with a separate ME to WE entity.

Listening to last week's testimony, I was concerned whether this had happened again, whether the cabinet was not aware and everybody just didn't.... Maybe they were thinking, “It's for charity. It's WE.” Maybe people, as we're all learning, weren't aware that the contract was with the WE Charity Foundation, which is very different from WE Charity. Just so long as everybody knew who the co-signing party was....

1:20 p.m.

Liberal

The Chair Liberal Wayne Easter

We'll go to Ms. May for a couple of minutes.

Be fairly quick, Ms. May.

1:20 p.m.

Green

Elizabeth May Green Saanich—Gulf Islands, BC

Thank you, Mr. Chair.

I want to thank both witnesses. Charity Intelligence, I've gone through your website. I think you do good work, and it's impressive that you do it on such a small budget and with so few people.

I want to ask a policy question, if I may. I imagine that you've been very interested in the Senate report, which was referenced by the Kielburgers in their testimony. The Senate report on catalyzing action, or something like that—the road map for charities in Canada—came out from a Senate subcommittee last summer. The Kielburgers mentioned that they regretted that hadn't been acted upon, because it would have given more scope to charities to use social enterprise and have that understood by policy-makers as an appropriate way to assist the good work that charities do. I wonder if you have any commentary at all on the Senate report and the nature of policy around charities in Canada.

I'll ask you, Kate.

1:25 p.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

Not really. You deal with the hand you're dealt.

I didn't want to go into the policy, but I was really surprised that there wasn't a recommendation in the Senate report to raise the disbursement quota from 3.5% to 5%. That, to me, is low-hanging fruit. I would really like to see that happen in Canada, and it could really help front-line charities.

August 6th, 2020 / 1:25 p.m.

Green

Elizabeth May Green Saanich—Gulf Islands, BC

Thank you.

This is my second question. I don't know if I'll have more than two.

Have you ever seen a charitable entity with the structure of a board of directors, staff and a separate category called “founders”, who are also, apparently, receiving funds from the organization, something of a stipend? In any context, have you seen a structure in which founders play this kind of role and in which, in the bylaws, a founder can fire a board member?

1:25 p.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

No. When people believe in a charity, they serve at that charity, and they serve as a director.

1:25 p.m.

Liberal

The Chair Liberal Wayne Easter

Be very quick.

1:25 p.m.

Green

Elizabeth May Green Saanich—Gulf Islands, BC

I was just going to ask Mr. Thomson if he'd ever seen it. I know I never have. I just wondered if there were any other charities in which founders play a role in governance but don't have fiduciary duties, as a board member would normally have.

1:25 p.m.

Director of Research, Charity Intelligence Canada

Greg Thomson

Possibly at a very small charitable organization.... I've probably seen this once, maybe twice, at a very small charitable organization, but never when a charity becomes anywhere close to the size of WE Charity.

1:25 p.m.

Liberal

The Chair Liberal Wayne Easter

Thank you, all.

Mr. Poilievre is next. Mr. Vaughan will then wrap it up.

Mr. Poilievre, you have a five-minute round.

1:25 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

Thank you very much for your good work.

My first question is this. We saw testimony regarding luxury $4,000-per-night escapes for prospective and previous donors to WE. What percentage of charities would you say offer this kind of luxury and expensive travel to donors, as apparently WE has done from revelations before this committee?

1:25 p.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

I may be confused on that, but I believe those trips were provided by ME to WE, the private business.

1:25 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

Interesting. All right, that's very interesting to know.

Regarding the contribution agreement, the Kielburgers claim there was no way they could make any money, yet the agreement specifically allows the WE Charity Foundation to subcontract to a series of other organizations, including the ME to WE for-profit enterprise. Do you believe there's anything in the contribution agreement that would have prevented monies from flowing through the WE Charity Foundation to a list of other organizations that would be subcontracted and ultimately, therefore, benefit the Kielburgers?

1:25 p.m.

Director of Research, Charity Intelligence Canada

Greg Thomson

The agreement specifically laid out the possibility of money flowing to other WE organizations, but I want to clarify.... I mean, the Kielburgers said that there was going to be no financial benefit to WE Charity, which is true. It is a charitable organization. They were not going to make a profit on this, because that's not part of the charitable sector. However, it would allow them to maintain their staff, potentially grow their staff, and maintain the charity at its current levels, if not grow it.

So there was certainly a social benefit to having this contract, but clearly there was no.... There's no such thing as a financial profit for a charity.

1:25 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

Well, of course. I think the word “profit” is being used as a red herring here. Of course, you don't have to make a profit to make money. In fact, we all know people who have businesses that don't have any profit, but they personally do well, either by subcontracting to themselves, covering their expenses or paying themselves a salary, all of which is deducted from a would-be profit.

All of that would have been allowed by this contribution agreement, so the use of the word “profit” is a complete red herring. It tells us nothing about the ability of the Kielburgers or their related organizations to benefit from the contribution agreement.

How many staff hours would the Charity Intelligence group have spent to produce the research it published on WE Charity in the last year?