Industry Committee on March 31st, 2009

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

But was that in keeping with bill C-4?

[Christiane Brizard]

No, we did not discuss that.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Do you think it would be possible to choose a term acceptable to all parties?

[Christiane Brizard]

Personally, I do not object to the term “expert-comptable”. Historically, that is the term that has always been used in legislation. In my opinion, changing terms without providing an explanation results in more confusion than anything else.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

My second question is for Mr. Hatton.

You mentioned some of your concerns, including the difficulty in recruiting quality volunteers and the need to simplify requirements for small organizations.

Do you feel that Bill C-4 can address these concerns?

[Al Hatton]

I think if, for instance, forms are built after the fact to be able to share with organizations so they can simply understand what their rights and responsibilities are.... Frankly, if you're a small organization you're not going to take a 300-page document and figure out how you're going to be able to respond. I think the challenge is going to be to simplify that. We had a bit of the same challenge with CRA in terms of their T3010 forms.

We are doing other regulation with Finance and with Canada Revenue. They actually created two forms. One was for complex organizations that they would have to fill out each year in terms of their operations, and they were 16 or 18 pages. They had a second form for organizations under, let's say, $200,000 of five or six pages, where they really accented the key things that organizations would be responsible for. That's the sort of thing we'd be thinking of. Otherwise people are overwhelmed and then they take it to auditors. If they don't have the money and if they can't find volunteers, then they don't have the resources to be able to do that. I think that's sort of the tone in which we would make that recommendation.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Hatton.

Mr. Lake.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Thank you very much for coming in today.

I'm going to come back to the same question, but maybe I'll ask it in a different way regarding the CGA and CA difference.

Hypothetically, let's say we were to change the bill as per the request of the CGA. If that were to happen and an Ontario organization decided they were going to a CGA rather than a CA to perform their necessary accounting work, how would that organization suffer by making that decision?

[Thomas Warner]

I don't think it is the organization itself that would suffer, but the third parties who would be relying upon or using the audited financial statements of that organization. The concern there is that whether you're a for-profit organization or a provincially established not-for-profit or a federally established not-for-profit, the financial statements have all been prepared in accordance with the same standards and the same requirements, demonstrating the same competencies. I think it's more a question of the ability of the third parties, the users of the financial statements, to rely on those and to understand that an audited financial statement means the same thing regardless of who has prepared it.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

So would a third-party organization, as you're talking about, using the outputs of a CGA in Saskatchewan be at a disadvantage compared to a third-party organization using the outputs of a CA in Ontario?

[Thomas Warner]

Let me answer it this way. Saskatchewan at the moment does not regulate public accounting at all. They have no legislation governing public accounting. So anyone may do public accounting there, whereas in Ontario, it has been regulated at an international standard.

So within Saskatchewan there would probably not be any difference, but that individual wanting to provide that engagement in Ontario would not be required to perform it at the same standard as a public accountant in Ontario.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

In general, how do the qualifications of CGAs and CAs differ substantively?

[Thomas Warner]

I'm a little hesitant to get into that, because I'm sure the CGAs would come back with a response that would disagree with me. I would tell you that all the components of both the CA qualification requirements and the CGA requirements, which include professional program requirements, the competencies and knowledge you need to write the examinations themselves, practical experience, and education--if it's a university degree, what's in the university degree--have been assessed by the Public Accountants Council in the province of Ontario, which I indicated has been set up under the legislation as the standards-setting and regulatory body. They did that through a rigorous process involving academics and practitioners and psychometricians. They did a thorough review, and it was their conclusion that at this point in time, the CGA in Ontario did not meet the standards they had set when you look at those aspects of the qualification program: education, examination, experience.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Is the fact that the legislation as it stands right now would allow a CA in Ontario and a CGA in Alberta or Saskatchewan to do the same work a shortcoming in the legislation, in your view?

[Thomas Warner]

It isn't in Ontario.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

No, no. I'm talking about the fact that the legislation, Bill C-4, as it's presented, would allow a CA in Ontario and a CGA in Saskatchewan to do the same work. Is it a shortcoming in the legislation that it allows CGAs in any part of the country to do this work?

[Thomas Warner]

No. Bill C-4 says it allows them to do it in any province in which the provincial legislation allows them to do it.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Okay.

I have a quick question for the United Way, if I could.

First of all, I want to comment that I really do appreciate, and I think we all appreciate the work you do in all of our communities.

In terms of the impact, you mentioned that you'd like to see less onerous requirements for smaller organizations. Are there particular examples of areas where the requirements would be too onerous for the small organizations you're talking about?

[Al Hatton]

Yes. The whole section under the previous clause 375--debts, trust indentures, receivership.... Those are exceptional circumstances. That sort of very loaded, legalistic verbiage, in a sense, is fairly challenging.

Obviously, people have to obey the law. Obviously, if an organization gets into trouble, there's a whole process by which you can deal with that. That would be an example, Mike. It's overwhelming. Then people have to go to lawyers and they have to start a whole process. They're there to actually give service, and often with limited resources.

It starts to create a very uncomfortable feeling for organizations, whereas if you simply state that you have to be honest, you need an audit, you have to have an annual report, and you have to share results with your members, that's the basic stuff people have to honour.

You can make it much more complicated. If somebody wants to do something that's illegal, they'll find a way around it. How do we make it simple and yet not so general that people can say, “I didn't know I was supposed to behave that way”? Most people know what's right.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Lake.

Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you to everybody for coming.

I'd like to continue with the United Way. I have a lot of concerns with the bill, not because of what it's trying to do but because of the lack of initiatives to even deal with this section of the economy. It's 8% of the economy. People forget about that.

There hasn't been any charitable tax reform. In fact, there's actually been a reduction in the amount you can rebate back to people for giving. It's tied to the lowest bracket of income tax. When that is dropped, then your rebate is dropped. Mind you, it's only a couple of bucks in overall donations, but it's sending the wrong message.

My concern, coming from the not-for-profit sector myself, is this. In terms of resource-based training, do you envision that the organizations will have to actually consult a lawyer? Will they have to bring in outside resources? Or do you really think that people could actually do this through a workshop?

I'd like to know whether or not you think, looking at the medium to smaller ones in particular, it wouldn't have the lawyer volunteering on their time, or the accountant sitting on their board. Sometimes it might even be a conflict of interest for some of them to do that training anyway.

Can I get a response to that? Do you think they'll have to expend resources to do this training?

[Al Hatton]

Well, fundamentally we support the principle of this--namely, to ensure that organizations are well run, are transparent, are very conscious of their responsibility to the public, and are husbanding their resources in the best possible way.

There are three years for us to sort of soften up organizations and make them aware that this is important. I think the trick is going to be in simplifying the implementation. This is obviously a regulation to cover all kinds of things, some of which you wouldn't want to happen and some of which people should just be conscious of.

I think the trick, from an implementation and bureaucratic next-step point of view, will be to come up with simple processes that help people understand their basic responsibilities and how they can exercise those in a practical and non-complicated way. It's not clear how that process is to take place.

I think that's where the real challenge is going to be. If the intent is to, in a sense, put a whole bunch of rigour onto organizations and tell them they have to do all sorts of things that don't actually advance their missions, then I think that will be complicated. It will be costly. And that's where it will become complicated.

That I don't have a sense of, but our concern, I think, would be that this be thought through. And then, once this goes through, how do we actually bring this alive and make sure that organizations continue to be effective without breaking them?

[Brian Masse, NDP, Windsor West, ON]

Right now we really only have a commitment for pamphlets. You're suggesting workshops.

Would it be practical enough if we actually...? Let's say over the next three years we were getting that commitment to have workshops in regions, and then maybe some funding to make sure they can get to that training, too. You have rural and other types of organizations that, I can tell you--well, I don't have to tell you, as you'll know this very well--don't have this money budgeted for training, let alone for executive directors. Then you have staff members, who then have to be up on all of this stuff. Even if they don't participate in the decision-making, they need to understand how their boards function, and their rules, and all those things, if we're going to change all that.

Would that be a model that you think the United Way could support, or would be able to participate in, to make sure that the training gets done?

[Eva Kmiecic, Executive Vice-President, United Way of Canada]

Thank you for that.

That is, in fact, an understanding of ours from the previous consultations we had with Industry Canada, that in a three-year transition period there would be effort made to have either workshops done directly by the department, with non-profits across the country, or to provide funding to other organizations, such as ours, national membership-based organizations with membership agreements, around which our members have to meet minimum standards that will change as a result of this act. So we would be allowed the opportunity, and provided some resources to provide that training to our members.

It's very important for us to have not just awareness-building sessions—some tools and templates, as Al has mentioned—but also the opportunity to actually do some training, if not through the department, then working through some credible organizations that would provide for that opportunity to ensure that we are compliant.

There are some additional areas where in fact this will put a harder burden on our non-profits. The voting rights of members is one that we have also not identified. Certainly we would like to see some changes in that regard.

So yes, there was an understanding that those provisions would be allowed for.

[Brian Masse, NDP, Windsor West, ON]

You correctly mentioned at the beginning of your presentation the strength of actual organizations right now, and the accountability for this, because every single cent makes a difference. In fact, the private sector could take some lessons from what's been happening in the not-for-profit sector all these years.

Here's what I really worry about at the end of the day. I look at a community like Windsor right now. We've had a successful United Way drive, even recently, and there are other not-for-profits that are dealing with some of the significant social consequences we have now, and I don't want to see a single cent diverted to a new Robert's Rules of Order at a time when we can't even retain volunteers and programs are required to expand when we know they've been shrinking.

If I understand correctly from the testimony, the United Way would be open to being part of one of those organizations that trains, follows up, and does that type of work. I just believe it's going to be a lot bigger than what we're talking about here today.