Mr. Speaker, I am glad to be able to join the debate and express my support for Bill C-470, a bill that I feel is of utmost importance in ensuring that Canadians retain faith in giving money to charitable organizations across the country.
The bill will provide Canadians with the knowledge that the presidents, CEOs and other executives of the thousands of registered charities throughout Canada are limited in the amount of compensation they are receiving. Therefore Canadians will feel more confident donating to charities without having to worry that the money they are providing is going to line someone's already-deep pockets.
With the current state of the economy, perhaps more than ever we need charities that act in the best interests of Canadians. We need food banks to ensure that people who find themselves fallen on hard times can eat property. We need health and wellness charities to guarantee that we can adequately support the individuals and families of those who find themselves sick or injured.
To ensure Canadians feel confident in giving what they can to charities, we need to give them the benefit of the doubt that the money they provide is actually going to support their chosen cause.
The bill will put a much-needed cap on the amount of compensation executives of charities can receive. The bill will limit executives working for charitable organizations to a yearly compensation of a more-than-reasonable $250,000, with compensation in this instance to include all salaries, bonuses, wages, commissions, fees and honoraria.
It seems only logical to place a limit on the amount of money executives of charitable organizations receive, both as a benefit of providing greater oversight into the inner workings of charitable organizations, and as a method of restoring and maintaining donor confidence in an industry that has been tested by scandal over the past few years.
Here is an example of why this bill is needed. Some members may be familiar with one of the more high profile scandals over the past year with regard to executive bonuses. It involved former SickKids Foundation president, Michael O'Mahoney. O'Mahoney reportedly received a salary of $600,000 for the fiscal year of 2008-09. In addition to this, O'Mahoney also received a bonus of $2.1 million upon leaving his post, a bonus that the SickKids Foundation referred to as an incentive payment for the work he did for the charity.
Most of us called it a golden parachute, the kind of excess we are all too used to in the corporate world but would not expect in a charity. Is it not a little ironic that the president of one of Canada's most highly regarded philanthropic organizations pulled in a yearly income that would rival that of all but the most lucrative corporate salaries? Is it not also ironic that O'Mahoney pulled in a far greater salary than Mary Jo Haddad, president and CEO of the Hospital for Sick Children, for whom the SickKids Foundation does its primary fundraising?
To reiterate, this is not a slight against the SickKids Foundation or the Hospital for Sick Children. SickKids is one of this country's most beloved and well respected charitable organizations. They have done exceptional work to ensure that the Hospital for Sick Children is adequately funded and is provided with the latest in cutting-edge treatments and preventive care. The problem I have with a situation such as this is that the money provided to Mr. O'Mahoney would have been taken out of the coffers of the SickKids Foundation, thus undercutting the amount of money the charity could provide to the Hospital for Sick Children and damaging the reputation of the charity, which in turn hurt their donations. And that is exactly what happened.
When this story broke in the news media, the SickKids Foundation received a backlash from donors in the form of a reduction in donations. People were not willing to pad someone's golden parachute. They wanted to help their community. The end result was a 10% decrease in donations and a 38-staff layoff.
Why would we allow an individual to walk away from a post with $2.7 million while the charity he was supposed to support lost vital donations, income and staff? Many will argue that paying these kinds of salaries and bonuses is the best way to attract the brightest talent, but these are charitable organizations and should not be the types of places for upper-tier executives to act in a manner that is comparable to Bay Street executives.
If the main focus for these executives is to line their pockets, I am certain there are many corporations that would love to hire them, but I cannot in good conscience sit and watch them play with funds that are designed to help people. At least with this bill, the minister will be able to exercise discretion to de-list charities whose executives see fit to claim massive salaries under the guise of charitable work.
The Canada Revenue Agency's charities directorate has the ability to audit roughly 1,000 charities per year. With approximately 100,000 registered charitable organizations in this country, that amounts to currently being able to perform an audit of a charity once every 100 years. Not only that, if the charities directorate actually digs up some form of unscrupulous dealings within a charity, it has very limited means to warn the public about such matters, as current tax laws keep the CRA from warning the public.
We need more stringent oversight into how charitable organizations do business. Many charities have been using commission-based incentives for employees, which can lead to aggressive, often-misleading tactics designed to lure people into donating to charities they might not wish to support otherwise. The use of such tactics is certainly frowned upon in the charity community. But with such lax oversight in this industry, it is almost impossible to discover who is using these methods.
It is not enough to simply expect charitable organizations to perform their duties in an honourable manner. I would assume most charities do operate nobly, but to simply assume they are is not enough. Take the example of the Wish Kids Foundation controversy of 2005. The fraudulent charity, which in name closely resembles the renowned Make-A-Wish Foundation of Canada, took $900,000 from donors who thought they were helping to give terminally ill children their dying wish.
As it turns out, not a single dime of the money raised by the Wish Kids Foundation went to sick kids. Instead, the executive director of the foundation, and I use the term loosely, took the money, purchased a new car, funded flying lessons for his son and put a down payment on a private jet. Think of the good $900,000 could have done for terminally ill children to enhance their quality of life, if only for one great day.
We need to work to ensure Canadian charities are acting in the best interests of the Canadian people. I am positive most are, but the few who are acting unethically tarnish the reputation of those looking to do some good for our country and the world at large.
If nothing else, limiting the amount of money executives earn within charitable organizations will provide much-needed oversight into how these organizations are run. It will allow us to more accurately see whose hands are in the till. People are cynical enough these days. We need to feel that institutions that stand for the name of good and charitable work are in fact delivering on their promise.
To summarize, given that there are so many charities out there, it is important that regulations are in place. We need to ensure that those dollars actually go to the right locations. I think the problem here is that we are seeing CEOs who are earning more than the Prime Minister, and he is running the country. If this were in place, I think we might end up seeing an increase in donations.
I would like to leave it at that. I certainly hope every member in this Parliament will support this bill.