Evidence of meeting #63 for Public Accounts in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cra.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Bob Hamilton  Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency
Sharmila Khare  Director General, Charities Directorate, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency
Geoff Trueman  Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency

5 p.m.

NDP

Blake Desjarlais NDP Edmonton Griesbach, AB

The second part of my question related to the kinds of processes that can be offered to ensure that foundations, agencies and charities generally can approach the CRA for assistance on something like an unverified donation, let's say. If an organization has a donation whose true donor is unverified, what is the CRA's advice?

5 p.m.

Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency

Bob Hamilton

I think Sharmila may want to add to this, but I think our advice is twofold. First we try to provide enough information in general to people so that they know where to turn and what's acceptable and not acceptable. We try to educate, because the rules can get a bit complicated and people might not know what to do. We put a lot of effort into educating people about the rules.

Then, if somebody sees something they want to contact us about, I think our best advice is to go to the leads program. Give us a lead, and that way everything is confidential. We have the ability to then pursue it to whatever end that is. If it is a penalty or something, we will put that on our website publicly.

5:05 p.m.

NDP

Blake Desjarlais NDP Edmonton Griesbach, AB

How much time does it take for the CRA to investigate a lead that it's acting on?

5:05 p.m.

Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency

Bob Hamilton

I would expect that would vary quite significantly depending on what the lead is telling us—how significant, how complex.

If somebody is claiming something is happening in a small little corner of a big charity, it could take a while. If it's something fairly straightforward about a relatively straightforward charity that might not be doing their receipting correctly, it might be quicker.

I don't know. I wouldn't—

5:05 p.m.

NDP

Blake Desjarlais NDP Edmonton Griesbach, AB

What about suspicious activity on the board?

5:05 p.m.

Conservative

The Chair Conservative John Williamson

That is your time, I'm afraid, Mr. Desjarlais.

Ms. Khare, you are excused. Thank you very, very much.

Turning now to our second round, we're going to begin with Mr. Genuis. You have the floor for five minutes, please.

5:05 p.m.

Conservative

Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB

Thank you, Chair.

I think we have quite a significant problem here. I'm starting to perceive what is perhaps the diabolical genius behind this Frankenstein structure of an organization.

To be clear, the reason that this committee is interested in the Trudeau foundation is not in terms of some private charitable organization that may have some problems. The public is interested in the Trudeau foundation because it is a public institution. It's subject to ATIP. It's subject to various statutes, including the Federal Accountability Act.

However, it is not, in a sense, a purely public institution. It has many features of a public institution, including a massive injection of public money, but it also receives private donations in a way that makes it susceptible to foreign influence. Foreign interference comes through external donations to the Trudeau foundation at the same time as it's able to use public money.

It also benefits from the fact that it shares the name of the Prime Minister, and within the foundation there is also a privileged position of power and influence for the Trudeau family, so you have this odd organizational amalgam of a family foundation with influence protected by the Prime Minister's family, a public institution with public money in it and the ability to receive foreign private donations.

This makes it opaque and hard to investigate. This also makes it at much greater risk, I think, of foreign influence, as I have spoken about before.

This is evident as we try to get to the bottom here of what happened. The foundation said that they wanted the Auditor General to investigate. Initially people on this committee said that they wanted the Auditor General to investigate. The Auditor General said no, they can't investigate, because they can investigate when public dollars are spent but they don't investigate when private donations are spent.

Then we said, “Okay; well, let's have the CRA investigate. Let's ask the CRA to investigate.”

However, what you're telling us is that you can't give us any information, basically, about what's going on. You can't tell us whether you're auditing it. You can't tell us any of these details. You can't report to us unless you have come to specific conclusions, and there's no opportunity for public scrutiny.

Because of the way that this foundation was set up by a previous Liberal government, we have an opaqueness and an inability to ask who's investigating, whether they are investigating and what their timelines and results are going to be for that investigation.

I would put to you that this is a significant problem for the level of accountability that we would expect of a public foundation with protected influence by members of the Prime Minister's family. Again, you're not able to respond to the things that we're asking.

I do want to ask you this.

You spoke about “when we get a lead” that can inform what you do. How responsive would you be in general to a parliamentary committee saying that we think it's important for CRA to look at this, if the House of Commons were to concur in the report from this committee and to vote that we're asking the CRA to look at it?

Generally, the way the Auditor General does it is that if a request comes, she preserves her independence, but she takes seriously recommendations that come from Parliament.

If Parliament votes to say that they think the Trudeau foundation needs to be audited, is that something you would take into consideration? Let's say it's any foundation. Would you take that into consideration, or would you say, “Too bad. We're going to make our own decisions. We're going to do whatever we want.”?

5:10 p.m.

Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency

Bob Hamilton

Mr. Chair, maybe I will separate that out a little bit, and then my colleagues may want to answer more on the question of foundations, private or public.

I'm not talking about one—

5:10 p.m.

Conservative

Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB

Sorry, but I'm very tight for time, so maybe you can be as quick as possible.

5:10 p.m.

Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency

Bob Hamilton

Yes, but I think it's an important part of your question.

What I would say in terms of our role in looking at this kind thing is, first off, when we get information and a lead, we act on it. We don't need Parliament or anybody to come in and tell us that. If we get information that we think something seems to be going wrong, we pursue it.

5:10 p.m.

Conservative

Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB

Okay, but if Parliament is saying, “We think this is important and in the public interest”, is that part of the data you look at, or not really?

5:10 p.m.

Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency

Bob Hamilton

That's something we could take into account, for sure, but I'm saying that it doesn't take that for us to look into something.

5:10 p.m.

Conservative

The Chair Conservative John Williamson

You have 30 seconds.

5:10 p.m.

Conservative

Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB

In the time I have left, I want to ask you about the rules against dishonest conduct. Can you confirm that a charitable organization can already be deregistered for dishonest conduct? Would, for instance, telling the public that a donation had been returned when it hadn't been returned constitute dishonest conduct, in your view?

5:10 p.m.

Commissioner of Revenue and Chief Executive Officer, Canada Revenue Agency

Bob Hamilton

I would defer to the experts on that specific question, but can I just finish the one point quickly on the other one?

When you look at CRA's role here, we are basically regulating the rules in the Income Tax Act. There may be a lot of things happening within a foundation or a charity. We're focused on what the rules of the Income Tax Act say and whether the entity is respecting them. We've talked about receipting, etc. I'll leave it at that for that moment.

In terms of the dishonest conduct, I don't know if that would qualify or if we could say—

5:10 p.m.

Conservative

Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB

So—

5:10 p.m.

Conservative

The Chair Conservative John Williamson

Mr. Genuis, don't interrupt. I'll allow an answer, but your time is up.

If Ms. Khare would like to give a brief answer to that question, I'm certainly all ears.

5:10 p.m.

Director General, Charities Directorate, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency

Sharmila Khare

Charities can't carry out activities that are illegal. Depending on the particular facts of a situation, if there were an illegal activity, that is something that would be of interest to us from a compliance perspective.

I also want to correct the record. I know that the name of the organization includes the word “foundation”, but this organization is actually registered as a charitable organization, which is generally a doer.

5:10 p.m.

Conservative

The Chair Conservative John Williamson

Thank you very much.

5:10 p.m.

Conservative

Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB

Now that I'm thinking about it—

5:10 p.m.

Conservative

The Chair Conservative John Williamson

Your time is up, Mr. Genuis.

Ms. Yip, you have the floor for five minutes.

5:10 p.m.

Liberal

Jean Yip Liberal Scarborough—Agincourt, ON

Thank you for staying on later. We do appreciate it.

Is there a difference between a charity and a foundation? I'm following up on your answer.

5:10 p.m.

Director General, Charities Directorate, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency

Sharmila Khare

Under the Income Tax Act, we have three different types of registered charities. We have the charitable organizations that are generally the organizations that are on the ground delivering services to charitable beneficiaries, and we have two types of foundations: public foundations and private foundations. Those are specific designations that relate to where the money came from and to the leadership of the organizations.

5:10 p.m.

Liberal

Jean Yip Liberal Scarborough—Agincourt, ON

Are public and private foundations treated any differently by the CRA?

5:10 p.m.

Director General, Charities Directorate, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency

Sharmila Khare

There are certain rules that apply to private foundations that would not apply to other types of registered charities.