Mr. Speaker, today we are talking about Bill C-470, which would amend the Income Tax Act in order to create certain conditions under which a charitable organization's registration could be revoked.
I will start by saying that the Bloc Québécois is in favour of this bill and will support it at second reading. We will then be able to study it further in committee and amend it as needed.
I would like to discuss the various amendments that Bill C-470 would make to the Income Tax Act. I will then outline the reasons behind the Bloc Québécois' support as well as some of the reservations we have about this bill.
Bill C-470 would cap salaries and other compensation given to directors of charitable organizations and would, by preventing excess, ensure the overall credibility of these types of organizations. The bill would cap charitable organization directors' salaries at $250,000.
Bill C-470 would also allow the minister to provide the public with a list of the five highest-paid employees in each registered charitable organization. This would make charitable organizations more transparent and would allow the public to trust them more.
The bill does not cover everything; it is a little bill. I would like to speak about the Bloc's stance regarding the two amendments to the Income Tax Act proposed in this bill.
We feel that this bill's goal is to create balance. On one hand, the ceiling for salaries cannot be too low because that would turn off the most qualified candidates. On the other hand, organizations have to maintain a certain level of credibility so that the public will trust them. We must strike a balance.
It is also important that this credibility and trust be maintained. More and more people in Quebec are making donations to charitable organizations.
According to Imagine Canada, from 2004 to 2007, Quebeckers increased the value of their donations by 24%, giving $1.17 billion of the $12 billion donated annually in Canada. That is the biggest increase in the country. There has also been an increase in major donations, that is, donations over $500,000.
If we want this trend to continue, the public must have confidence that these donations are being put to good use, especially in the current context, and that they are not being used to pay excessive salaries. Also, scrupulousness and performance must be a key part of the commitment made by the directors of such organizations.
However, the Bloc Québécois believes that a thorough review of the compensation paid to directors is necessary, so that charitable organizations can continue recruiting qualified staff despite the $250,000 salary cap.
As Peter Broder, a lawyer with an Edmonton foundation, stated:
—those salaries need to be seen in a broader context. That means a hard look at both the nature of the responsibilities of these individuals, given the mandate and scope of their charity's work, and better consideration of the salary structure within the sector as a whole...if we are to have a sector where people want to make a career, and a sector that attracts innovative and dynamic individuals, the other inadequacies of the current model need to be addressed.
A salary cap must be established in order to avoid excessive salary inflation. In recent years, the salaries of directors of charities have increased significantly. Last year in Canada alone, they went up 17%, and between 1999 and 2008, they went up 44%. That is a significant increase.
Since there are no guidelines or safeguards, many concerns have been raised regarding excessive salary inflation in the very near future, which has happened in the United States, where the median salary was $410,000 U.S. in 2007. That is a lot of money.
When this bill is being studied in committee, we must consider adding a provision that will allow us to ensure that salary increases remain reasonable. This will act as a control mechanism.
In Quebec, with the average salary of organization directors being $125,000, a $250,000 ceiling leaves a lot of room to manoeuvre when it comes to salary increases. We know that it is more outside Quebec where somewhat higher salaries are paid to directors of charitable organizations. That is not the case in Quebec.
For greater transparency, people would also like to know how the money they donate to charitable organizations is spent. Some organizations have shown some reluctance to disclose the salaries of their directors, thereby fuelling a culture of secrecy that could hurt the image of other organizations.
The salaries of the directors could be disclosed without naming the people who earn these exorbitant salaries. We also feel that such a measure would contribute to making charitable organizations more transparent.
I believe it is necessary to look at a person's salary without that person being named in order to comply with the Privacy Act. The purpose of this initiative is to increase public trust in charitable organizations and make people more inclined to make donations. If there were more transparency, the public would be more inclined to make donations since people would see that their money is well spent and that directors are not too greedy when it comes to their salaries.
Nonetheless, we have to make sure this bill does not encroach on the private lives of the directors, as I was saying earlier, so that their lives are not paraded through the media. When this private member's bill is studied, we have to be careful of any possible invasion of privacy. That is why we are proposing that the requirement to publish the names, job titles and salaries of the five highest-paid employees of each organization be studied in committee and possibly amended to remove the name of the person whose salary will be published.
The publication of the salaries, as set out in Bill C-470, will allow comparisons to be made between the salaries of the directors of agencies of similar size and will help determine whether any stand out as being unjustifiably high.
In my opinion, that should be the objective. We cannot compare apples and oranges, that is, salaries paid by a large corporation and those paid by a small one. We must be fairly vigilant when it comes to employees of charitable organizations that we deal with. A public list would make it easier to establish an acceptable average based on data for the sector as a whole.
The Bloc Québécois is in favour of this bill, which should be studied in committee. We have a few minor reservations. However, the member who introduced the bill is willing to examine the reservations about this bill expressed by other parties.
If this bill is adopted at second reading, committee members will have the opportunity to sit down, discuss it and get the facts about a number of charitable organizations. I believe that the member who introduced this bill got it right and has identified a specific problem. For example, when a charitable organization pays $500,000 to an executive, and that amount represents a significant percentage of the funds collected by the organization, the salary has to be justified.
As I was saying, that may not be the case for our charitable organizations in Quebec. I know that, in Canada, there are other ways of doing things and charitable organizations are on a different scale, as they have patrons and receive significant donations.
We must also examine the qualifications of the incumbents of these positions. We believe that it is very important to maintain this balance and to reassure the public about how charitable organizations spend their donations.
We will be following this matter with a great deal of interest. We hope that the committee will make amendments to ensure that transparency is the objective of this bill.