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

11:25 a.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

Yes, we've been in contact regularly with WE Charity management at least once a year, multiple times during the year on the impact side, going back and forth and getting information.

With WE Charity, when the government grant was announced, we were trying get the order to financial statements. There were multiple emails. They were provided by the CFO on July 8. We analyzed them and we had questions and we got in contact. We said that whenever you have a moment, and we know it's extremely busy, there are a couple of clarifications for understanding management discussion and analysis.

We had discussions with the chief operating officer. We set up two video calls that went on for 30 minutes, sharing our concerns and sharing our recommendations on how to shore up donor support. That's our normal process with charities.

11:25 a.m.

Liberal

The Chair Liberal Wayne Easter

Marty, we're well over the time, but if you're on a line of questions, I'll let you complete them.

11:25 a.m.

Conservative

Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB

No, I guess I'll just finish by saying that given the vast resources of the federal government, it seems to stretch credulity, as I said, that they wouldn't have been able to find this information.

My one last question is—

11:30 a.m.

Liberal

The Chair Liberal Wayne Easter

Before you ask that, I will have to tell both witnesses that the interpreters are having a little difficulty hearing you, so please speak into the mike and speak a little louder if you could. Neither of you has a headset, so it's just for their benefit.

Marty, this is your last question.

11:30 a.m.

Conservative

Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB

Just to clarify this and to put it in simple terms, how easy would it have been for those doing their due diligence within the public service to uncover the same information that you've been able to discover?

11:30 a.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

In 2019 the audited financial statements were posted on the WE Charity website, and we believe that due diligence starts with the audited financial statements. It would be clicking, receiving those documents, and reading through them.

11:30 a.m.

Conservative

Marty Morantz Conservative Charleswood—St. James—Assiniboia—Headingley, MB

Very good. Thank you.

11:30 a.m.

Liberal

The Chair Liberal Wayne Easter

Thank you all.

We'll turn to Mr. Sorbara. He'll be followed by Mr. Fortin for around six minutes. We have lots of time today.

Go ahead, Mr. Sorbara.

11:30 a.m.

Liberal

Francesco Sorbara Liberal Vaughan—Woodbridge, ON

Thank you, Mr. Chair.

It's great to see everyone today.

The first comment I'd like to make is that we have undertaken this study on the motion that was passed. The intent of the motion that was passed was to examine the programs that have been put in place to assist Canadians. We should remind ourselves, during this most extraordinary and unique time in Canada and in the world's history, with a pandemic afoot, to look at programs that have benefited Canadians: the Canada emergency response benefit, which over eight million Canadians have utilized; the Canada emergency business account, which nearly a million businesses have utilized; the Canada emergency wage subsidy, which is helping almost three million Canadian workers maintain attachment and helping their employers build a bridge to a full recovery; and the rent assistance program.

I think that was the intent of the motion and of the report that will be delivered by, I believe, March of next year. We're spending time analyzing an organization, and I don't think that was the intent of the motion that was put in place by the finance committee. I want to put that on record, because I think it's important that we understand why we're here. We are here, but we also need to remind ourselves of what was the original intent of the motion. We get these great biweekly reports—we have the ninth report, which was delivered July 23, 2020—on where the government is spending money to help Canadians. We are spending money so that Canadians don't have to take on debt on a personal basis. I think that's the right thing to do. I'm an economist by training. I think our response has been second to none. It has been top-notch in assisting Canadians. We've seen it in our economic data that's come out. It's been quite constructive.

Moving on to Charity Intelligence, Ms. Bahen, I'm a former sell-side debt analyst. I was a ratings analyst. I worked in corporate finance and investment banking in New York City for a number of years. You were a sell-side equity analyst, I believe. I appreciate the work you are doing at Charity Intelligence. It's important, but it's also a double-edged sword, because when you make a wrong call, you can actually hurt a charity significantly. I don't know who's doing the due diligence on Charity Intelligence on your calls. You have had to apologize in the past when you've made that wrong call and when the damage is, I would say, done.

You indicated that you look at partisanship in a certain manner. I look at partisanship as a debate about ideas. I do want it on record that I believe one of your co-workers, one of the members of your team, is a long-time donor to the Conservative Party of Canada. I do want to put that on record. Substantial sums in donations have been made over the years. That should go on record. There's nothing wrong with that. Canadians have a right to donate to the political parties of their choosing. But we should get that on record, because your work is very important.

One thing that is very concerning to me is a letter by MP McLean. I wanted to get your opinion here. Do you think it's appropriate for political parties and governments to use CRA to audit charities for political purposes? We do know that letter would be...and that mandate to have the minister do that would be in violation of section 241 of the Income Tax Act. Do you think it's right for MPs to say, “We need to audit them”?

We know that under the Conservative government, Prime Minister Harper criticized the Supreme Court of Canada. We know that they muzzled scientists. None of that—

11:30 a.m.

Liberal

The Chair Liberal Wayne Easter

We're going to have to stay on point here, Mr. Sorbara.

11:35 a.m.

Liberal

Francesco Sorbara Liberal Vaughan—Woodbridge, ON

Absolutely.

Ms. Bahen, do you think it's appropriate for government, for political parties, to mandate audits of charities?

11:35 a.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

Mr. Sorbara, please call me Kate.

11:35 a.m.

Liberal

Francesco Sorbara Liberal Vaughan—Woodbridge, ON

Kate: thank you.

11:35 a.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

I'd love to answer that question, but could I just ask, when did we make a call wrong, in your reference—

11:35 a.m.

Liberal

Francesco Sorbara Liberal Vaughan—Woodbridge, ON

It's called the Truth North Youth Foundation, I believe—when I was doing my due diligence.

11:35 a.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

Our research report stands. There were 28 charges of error on our part. We went through extensive legal on that. The error was in my very rude comment on a radio show calling them a swear word. I apologized for that and I paid for that mistake, but there was absolutely nothing in our research or our analysis or our star rating of the True North Youth Foundation in Winnipeg.

No, I hope politicians don't use the CRA [Technical difficulty—Editor]

11:35 a.m.

Liberal

Francesco Sorbara Liberal Vaughan—Woodbridge, ON

Sorry, Mr. Chair—

11:35 a.m.

Liberal

The Chair Liberal Wayne Easter

We're losing you, Kate, for some reason.

Just step back for a minute.

Where we started to lose you was when you said, “I hope the CRA”. If you could go back to that point, where you came through kind of bubbly, go ahead if you can.

11:35 a.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

Sorry, my [Inaudible--Editor] laptop.

I hope the CRA is not used as an attack dog.

11:35 a.m.

Liberal

Francesco Sorbara Liberal Vaughan—Woodbridge, ON

Thank you for being so direct on that because—

11:35 a.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

Blame [Inaudible--Editor] if my connection is unstable.

11:35 a.m.

Liberal

Francesco Sorbara Liberal Vaughan—Woodbridge, ON

Greg, would you like to say something?

11:35 a.m.

Director of Research, Charity Intelligence Canada

Greg Thomson

No, but per Kate's point, we would hope that the CRA is not used to go after charities. Nonetheless, the CRA's charity directorate does need to be there to make sure that charities are following the guidelines and are doing what they're supposed to be doing.

11:35 a.m.

Liberal

Francesco Sorbara Liberal Vaughan—Woodbridge, ON

I asked because it concerned me considerably to see a letter written by a member of Parliament that would violate a section of the Income Tax Act. It hearkens back to very dark days under the prior Conservative government, where the CRA was, I don't want to say directed, but where we saw court cases—I think one went up to the Supreme Court if my memory serves me correctly—from charities being, I'm going to use the words, under attack by a prior government.

We also saw this the other day by Mr. Poilievre when he criticized the actions of the Bank of Canada, directly or indirectly, which is an independent agency. I think that's very important to note. Therefore, I am very happy with your answer.

11:35 a.m.

Liberal

The Chair Liberal Wayne Easter

You'll get time for one more question, Mr. Sorbara.