Mr. Speaker, earlier today the parliamentary secretary to the government House leader raised a point of order asking that Bill C-470 be ruled out of order.
Bill C-470 addresses exorbitant salaries at charities that abuse the generosity of millions of Canadian donors. At present, the revocation of a charity that violates requirements of the Income Tax Act is at the discretion of the minister.
Bill C-470 does not reduce that ministerial discretion. It simply adds to the existing grounds available to the minister. That being the case, the minister would act in the same way as before, and there is no certainty of a change in tax exempt status regardless of the behaviour of a particular charity.
The bill provides an effective date of 2011, which adds to the context and the purpose of the bill which clearly is not to increase taxation or government revenues.
Mr. Speaker, let me draw to your attention to one key word in subsection 149.1 of the Income Tax Act. That word is “may”. It says:
The Minister may, in the manner described in section 168, revoke the registration of a charitable organization for any reason described in subsection 168(1) or where the organization
(a) carries on a business that is not a related business of that charity; or
(b) fails to expend in any taxation year, on charitable activities carried on by it and by way of gifts made by it to qualified donees, amounts the total of which is at least equal to the organization’s disbursement quota for that year.
If Bill C-470 becomes law:
(c) pays to a single executive or employee annual compensation exceeding $250,000.
So in addition to five requirements in section 168 and two requirements in section 149, Bill C-470 adds one more. But what it does not do is change the word “may” to “shall”. So it remains in the discretion of the minister as to whether to allow funds to be legally skimmed from charities into private fortunes.
There is no change to the tax rate or tax payable of any charity affected by this bill. It simply provides the minister with expanded grounds under which he may choose to act in the interest of Canadians.
The parliamentary secretary made reference to a case in 2007 where the chair ruled Bill C-418 out of order as it would impose a change in the tax deductibility of remuneration beyond a certain level.
Bill C-470 operates in a materially different way. It expands the requirements that a charity must comply with or be exposed to the discretion of the minister. It cannot be reasonably expected that any charity will choose not to comply and face de-registration, and it cannot be certain that the minister will revoke the status of an organization that fails to comply.
Bill C-470 does not impose a tax or other charge on the taxpayer. It does not require the imposition of a new tax, the continuation of an expiring tax, an increase in the rate of an existing tax, an extension of the incidence of a tax so as to include persons not already payers, nor an increased or accelerated tax burden on any class of taxpayers.
As such, it does not violate any of the principles set out by Marleau and Montpetit or Beauchesne.
Bill C-470 does impose responsibility on the minister. It is a responsibility to the millions of Canadians who donate billions of dollars to charity every year.
If the provisions of Bill C-470 were in place and they continue to see their donations going toward million-dollar payments to CEOs, money intended for the sick or starving going into luxury lifestyles, they would know that the minister had the power to stop it and chose not to.
Bill C-470 would give charities a powerful incentive to maintain the trust of their donors and would give the minister the responsibility, capacity and discretion to respond to breaches of that trust.
If the government does not want greater capacity to protect millions of Canadians who donate to charity, it can choose to vote against this bill. However, the facts remain clear. There is no certainty, or even likelihood, of any change to taxation that would require a ways and means motion.