Industry Committee on March 10th, 2009

[Cathy Barr]

I would say some, but not a large number at all.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Okay.

I'm a little concerned--I just found this somewhat puzzling--that in our own notes it says the following:

The proposed legislation will also make it easier for these corporations to take advantage of the protections offered by incorporation and the predictability and accountability offered by a modern corporate governance framework.

We would all agree with that.

In doing so, the law will make the sector more sustainable and self-sufficient and increase its potential as a governmental partner.

Wouldn't some of those whom you represent be a little uneasy about that? Don't they form non-profit organizations because they want to act separate from government?

[Cathy Barr]

I would say the majority probably wouldn't see themselves as a government partner. Some are for the delivery of government services, but many are not. They see themselves as separate.

[The Chair, Conservative, Michael Chong]

Thank you very much, Mr. Van Kesteren and Madam Barr.

Mr. Rota.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

Thank you for coming out. It has been very informative.

One thing in this bill is that there's a strong governance structure proposed. It's mainly related to accounting and financial matters, but it really doesn't contain anything ensuring that non-profits are carrying out activities in accordance with their mandate. Not often, but occasionally I'll get a call saying, “Okay, I got a call from somebody who's off on some tangent and it doesn't seem to be their core structure.”

I'm sure that happens while you're working, and you're stepping on each other's toes trying to do something. Is that something that would help if it were included within this legislation?

[Susan Manwaring]

I would think that one of the positive things about this legislation is that it takes us out of the realm of an entity. If they don't just do exactly what's described in their objects, then somehow they don't have the legal authority to do it. That is gone with this legislation. That's a modernization step that I think is appropriate.

Where there is room and regulation already—I would suggest we don't need more--on the activities of non-profits or activities of charities, is through the income tax legislation. Really, this legislation sets up an environment where you can incorporate a membership-type corporation. The status of whether you're non-profit or charity is driven by the requirements of the Income Tax Act, not by this statute. I would suggest that's where they should remain. Heaven forbid we get conflicting requirements as to what qualifies where--in my view. I think for the sector, it would be much more straightforward to have regulation at the one level.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

In that vein, I guess not-for-profit is not defined in this legislation. What you're saying is that it shouldn't be defined in this legislation, it should be defined basically at Revenue Canada or in the tax act.

[Susan Manwaring]

There is a definition of a not-for-profit corporation in the Income Tax Act. The concept of this legislation is non-share capital, meaning members don't have equity in the corporation, with the exception of private golf clubs; they fit in. The requirement of what you can do to be non-profit, therefore non-taxable, is regulated. I think the only real relevance is the Income Tax Act.

I'm not necessarily speaking on behalf of Imagine. We haven't had that discussion. That would be my view.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

That was it for me. I don't know if you want to add something, Mr. Reid.

[Alan Reid]

I would just like to comment.

I think the act will promote stronger governance through self-regulation, and getting the government regulation out of it.

I think the overall operation of the act will be to encourage strong governance within not-for-profit corporations.

[The Chair, Conservative, Michael Chong]

Madam Coady, if you have a question, go ahead.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Certainly. I do have a question on the remedies.

Mr. Reid, you raised an issue of the dispute mechanism being challenged with the way it is currently worded in the act. Perhaps you could comment on what you would prefer to see. I know that Ms. Barr and the Imagine group also have a question about the remedies section.

[Alan Reid]

I'm not sure that it's something you could probably build into the statute itself. I think it may be more a matter of the overall administration through the ministry, part of perhaps the educational component. I don't think you can put in mandatory mediation. If I had to sit down and draft up a provision, I don't know exactly what I would say.

I guess my concern is that I don't want to create a whole lot of rights that people are going to be running off to courts to try to enforce. Maybe it's going to be the responsibility of organizations like ours to make sure that doesn't happen by our own governance procedures.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Thank you.

[The Chair, Conservative, Michael Chong]

Ms. Manwaring, did you have any comments?

Thank you very much, Madam Coady.

We're going to go to Mr. Lake now.

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

I'll start by thanking you for coming out today and taking this time.

It's interesting; I was looking through your report here, and in appendix 1, it lists the National Nonprofit Sector Task Force. The first name on that list is Jacqueline Biollo, one of my constituents. It's been my pleasure to have an ongoing and productive discussion with her on some of these issues.

I have a couple of questions. I guess the time issue has come up. Mr. Reid mentioned this. The political reality is that we're in another minority Parliament. My colleagues across the way might be able to indicate when the next election's going to be. They may have some knowledge of that, I don't know. It seems to me that it's constantly around the corner. This bill has come up time and time again and not been passed.

You have 161,000 people whom we're talking about consulting with, potentially. The danger in this sector is that if you invited 161,000, there's enough passion out there that they would probably all want to come. Obviously there's only so much time that we have to dedicate to consultation. We had 350 members of the public take part in the consultations between 2000 and 2002--many of them probably part of your organization. There was an additional round of consultations in 2005. The committee studied this between 2004 and 2005.

This question is more for Imagine Canada. Mr. Reid can comment, although I think I know the answer from Mr. Reid.

If you had the choice right now between the bill as it is or no bill at all because time expires again, which would you take?

[Cathy Barr]

Our task force was in fact quite divided on that question. I think the non-profit sector probably is too.

There is a group of organizations that would prefer this bill to the current one. There are certainly many experts in the field who believe we will be worse off if this is passed because more complex sections will become embedded in the act and will be there for the next 50 or 60 years.

So I would say that opinion is quite divided among those who are aware that this bill is here at all. I don't feel that we would even take a position on that. I would say even our task force was divided on that.

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

Mr. Reid, do you want to comment on that?

[Alan Reid]

I think our position is in our submission.

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

Okay.

[Alan Reid]

We think it's time to look ahead.

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

Looking at the five recommendations for improvement from Imagine--for example number three, number four to some extent, and number five--it seems to me that we're just talking about some housekeeping in terms of those things. They don't seem overly substantive.

Regarding the remedy section, it seems to me that if the bill were to pass as is, based on what you're saying here, you could probably solve that problem simply through your organization being representative of other organizations by putting on your website a catalogue of remedies in one place that they could refer to if they had to.

I want to come back to the two-tier approach, the soliciting versus non-soliciting. I want to get some clarification. Most people would see the need for accountability for organizations that are raising money. Further to Mr. Warkentin's point, it doesn't seem to make sense to hold organizations that aren't asking for money from other people, from members of the public, to the same standard.

Are you suggesting that there should be less accountability, that looser standards should be in place for everybody?

[Susan Manwaring]

There are differences between soliciting corporations and non-soliciting corporations mainly in the areas of financial audit requirements--there's a significant difference there--and the makeup of the board of directors. I'm probably forgetting one or two things.

The main difficulty with it, and where I see that it will cause problems, is that people aren't going to know from time to time where they fit, that they will likely be more in non-compliance than compliance.

I would say you take the tougher standard and you apply it to everybody so there's one set of rules. They apply, and everybody....

I don't think the accountability should be loosened.

[The Chair, Conservative, Michael Chong]

Thank you very much, Madam Manwaring.

Do you have any more questions, Mr. Bouchard?

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

Yes. I have a question for Mr. Reid from the Red Cross.

Mr. Reid, as you said, the Red Cross has a presence in many communities across Canada and in all provinces, as well as internationally. Your organization's purpose is to improve the situation of the vulnerable.

Do you have any reservations about Bill C-4 applying to co-operatives given that you work in humanitarian aid?