House of Commons Hansard #28 of the 40th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was colombia.


The House resumed from March 15 consideration of the motion that Bill C-470, An Act to amend the Income Tax Act (revocation of registration), be read the second time and referred to a committee.

Income Tax ActPrivate Members' Business

11:05 a.m.


Robert Carrier Bloc Alfred-Pellan, QC

Mr. Speaker, it is a pleasure today to speak to Bill C-470, which was introduced at first reading on October 29, 2009, by the member for Mississauga East—Cooksville. The bill itself is very short. It would amend several subsections of section 149.1 of the Income Tax Act.

These amendments would enable the minister to revoke the registration of a charitable organization, public foundation or private foundation if any of its employees receive compensation in excess of $250,000. Bill C-470 clarifies that compensation includes not only salaries, but also “wages, commissions, bonuses, fees and honoraria, plus the value of taxable and non-taxable benefits”.

Lastly, Bill C-470 enables the minister to make public the names and salaries of the five highest-paid employees in each organization registered as a charity, as part of the annual listing of charities in accordance with section 149.1 of the Income Tax Act.

I would now like to describe the circumstances that led to this bill. On October 1, 2009, the SickKids Foundation made headlines when it was reported that its president collected a severance package valued at $2.7 million. A debate ensued on the huge salaries paid to charity executives, what constitutes fair compensation, and whether these salaries are in line with such organizations' missions.

In Quebec, a series of articles was published in les affaires in 2008 calling into question the salaries of top executives at a number of charities. The title of the series was “Philanthropy: worthy causes, whopping salaries”. Naturally, the articles made a lot of people skeptical about how donations to these organizations are being used and may have a negative effect on future fundraising efforts for charities as a whole.

The author of these articles explained how surprised the average Quebecker was to learn that such a significant portion of donations and other amounts received by charitable organizations is spent on salaries, including those of the directors of these organizations. According to the figures declared to Revenue Canada in 2007, 55% of the revenues at Moisson Montréal was spent on salaries, 44% at Mira Foundation, 38% at Fondation québécoise du cancer, 35% at Sun Youth Organization, 31% at Leucan and 60% at Le Bon Dieu dans la rue.

This was also surprising to experts in the field. For example, the CEO of Bolduc, Nolet, Primeau & Associates, a philanthropic management company, stated that when salaries are as high as 30% or 40% of all revenues, there is a problem.

According to these articles, the average salary of directors of charitable organizations in Quebec was $125,000. These high salaries surprised not only the public, but also the experts, who thought they were much too high. Even more disturbing than the high salaries was the silence or reluctance of some major organizations to reveal the salaries of their directors.

This made the public even more doubtful about the legitimacy of these salaries. There is a lack of real safeguards, and there have been concerns that these salaries could get out of control and end up comparable to the salaries of American charitable organizations, which had an average salary of $410,000 in 2007. These salaries have been skyrocketing in recent years. In Canada, they increased by 17% last year alone, and there was a 44% increase between 1999 and 2008, according to the annual survey of benefits and compensation published by the Canadian Society of Association Executives.

However, the Bloc Québécois knows how essential it is for charities to be able to continue hiring qualified managers.

Bill C-470 would require that the names of the five highest-paid employees in each charity be published. The Bloc Québécois understands the underlying principle of transparency in this initiative, but it is worried about the privacy of these organizations' administrators. Perhaps the requirement of publishing these names should be removed from the bill.

Quebec charities with executives who earn an average of $125,000 a year will have some room to manoeuvre when it comes to salary increases. By respecting a $250,000 ceiling, these organizations will be able to recruit and retain qualified applicants.

But what about the salaries of executives in larger Canadian charities? Numerous factors need to be taken into consideration: the size of the organization in terms of its revenue, expenses and staff; the complexity of the regulatory environment in which the organization works; and the number of departments and government organizations it deals with.

Of course, these factors affect each organization differently. We cannot determine a realistic salary ceiling without considering these factors and taking into account the changing needs of the organizations as well as the domestic and international market.

The heads of several Canadian charities are already being paid over $300,000, which seems reasonable, considering the size of the organizations they manage.

Also, the number of Canadian charities is quite remarkable: 161,000 in all. In Laval alone, where I am from, there are 383 registered charities, including childcare centres, community centres, volunteer associations, regional recycling depots, private schools, the Laval symphony orchestra and the Laval health and social services centre, a Government of Quebec organization. All of those organizations are registered under the Income Tax Act.

So it would be very difficult to establish a salary cap for such a diverse group of charities and organizations whose volunteer elements are not necessarily obvious.

Given that the Quebec and provincial governments have full jurisdiction over the charitable sector, we must ensure that Bill C-470, in its current form, does not infringe on Quebec's areas of jurisdiction.

Furthermore, given that any charitable organization that wishes to register in Quebec must first be registered with the CRA, we must ensure that Bill C-470 fits in with Revenu Québec's provisions in that regard.

In any case, the Bloc Québécois is in favour of the principle of Bill C-470, which is why we will support it at second reading, so we may examine it in committee.

The Bloc Québécois recognizes the importance of charitable organizations in Quebec society. In order for these organizations to be able to pursue their charitable missions, it is important to maintain their credibility and the public's trust in them.

Nevertheless, the bill's impact on all charities must be thoroughly reviewed in order to ensure that these organizations can continue recruiting qualified staff despite the limitations this bill would impose.

Income Tax ActPrivate Members' Business

11:10 a.m.


Sukh Dhaliwal Liberal Newton—North Delta, BC

Mr. Speaker, I rise today to second private member's Bill C-470 put forward by the visionary member for Mississauga East—Cooksville. I call her visionary because she brought in a bill on proportional sentences for murderers that was so good for Canadians that the government adopted it. I hope the government takes the same lead on this private member's bill as well.

Charitable giving is part of our nature as Canadians. Charities across the country receive billions in contributions from Canadians of all income levels, of all backgrounds, and from every province and territory.

That being said, I am well aware of the challenges that charities have faced in recent years. In 2008 Canadians donated $8.19 billion, a 5.3% drop from the previous year. Although the figures for 2009 have not been released yet, the charities I have spoken to have told me how difficult 2009 was as well. The global economic downturn has had a huge impact in this regard, and like businesses, charities have felt the pinch.

There was good news however. The number of donors did rise to 5.8 million, which represented a 1.7% increase from the year before. This bill is about those 5.8 million Canadians.

The first component of this bill has to do with transparency, which is a standard that each and every charitable organization should be trying to achieve.

Those that give to a cause want to know that their gift is going to the right place. So we ask about a charitable organization's administrative costs, and how much of a donation is actually making a direct impact.

But surprisingly, up until last year, the Canada Revenue Agency never required charities to report the salaries of their top executives.

The charitable filings for 2009 mark the first time Canadian charities have disclosed compensation information for their ten highest paid officials. Previously, charities only had to provide limited information about their five best paid staff positions.

Yet, there is still great ambiguity with this disclosure. There are no exact salary figures for these individuals. Instead, there are only categories, like the top bracket of $350,000 and over, which leaves a lot to be desired when it comes to information.

The bottom line is that if someone chooses to make a contribution, they have a right to understand exactly what the leadership within their chosen charity is being paid.

Donors are like shareholders of any public company, so disclosure needs to be a lot more specific to give donors the information they need to make informed decisions about where they choose to donate their hard-earned money.

The second aspect of this bill is about introducing a salary cap of $250,000 within the charitable sector.

As the hon. member for Alfred-Pellan mentioned, there was great confusion and even anger when last year it was revealed that one of Canada's largest charities, the SickKids Foundation, paid its former president $2.7 million in 2008. To many this is a figure that is very hard to comprehend, particularly when considering how hard it is for a charitable organization to raise that kind of money. It is especially hard to see how someone can faithfully accept that kind of salary for doing good deeds.

The salary cap in Bill C-470 would allow charities to pay their top executives salaries comparable to federal deputy ministers who run even larger and more complicated organizations. If a charity wants to exceed the cap, it would fall to the federal minister. If he or she does not accept the justification, he of she can decide to de-list the charity.

I have an issue with those who say that the House of Commons should not be involved in the salary decision-making process.

As I mentioned previously, tax receipts were given to over 5.8 million Canadians in the year 2008. The Government of Canada encourages charitable giving through these subsidies. This is a long-standing tradition and I will go as far as to state that it is one of the essential components behind charitable giving in our country. Thus, we as members of Parliament have every right to scrutinize the salaries of executives that are, to an extent, being partially paid by way of Canadian taxpayers.

This past December, the Fraser Institute released its 2009 Generosity Index. The Generosity Index measured charitable giving for both Canada and the U.S. in the year 2007 and detailed the percentage of tax-filers who donated and the percentage of income that they gave to good causes.

For Canadian charities, the numbers were troubling. Americans donated 1.6% of their aggregate income to charities while Canadians donated less than half of that, at 0.73%. In dollar figures, Canadians donated approximately $8.5 billion to charitable causes, but if we had given at the same rate as our southern neighbours, the total would have been in excess of $17 billion.

Bill C-470 is an attempt to assist charities with this gap by instilling greater confidence in their practices among the Canadian public. The successful passage of this legislation will ensure that not only will Canadians be able to access more information, but they will also be able to have confidence in compensation packages that are equitable and fair in consideration of their charitable gifts.

As the economy recovers, the rate of charitable donations will recover. This bill would open the books of charities so that Canadians can open their wallets to charities with confidence.

Once again I thank the hon. member for Mississauga East—Cooksville for bringing in this important measure as a private member's bill.

Income Tax ActPrivate Members' Business

11:20 a.m.


Kelly Block Conservative Saskatoon—Rosetown—Biggar, SK

Mr. Speaker, I am thankful for the opportunity to speak to Bill C-470, a proposal before the House sponsored by the member for Mississauga East—Cooksville.

From the onset, I will state that our government agrees with the member on the importance of ensuring proper and appropriate regulation of the charitable sector in Canada. This includes the need to remain vigilant against undue personal benefit for individuals employed in the sector.

Our government is always open to exploring ways to strengthen current legislation. In that regard, we welcome and will support Bill C-470 for discussion in the finance committee in the coming weeks and months. Moreover, we understand that many charitable organizations, both large and small, would like to participate in the debate on Bill C-470 and potentially make some suggestions related to the proposal.

We are especially encouraged that the member noted earlier in the debate that she was ready to more fully explore this proposal at committee stage. The member for Mississauga East—Cooksville would likely agree that we need an opportunity to hear the voices of those involved in charities across Canada to make certain that occurs.

I also believe that all members of Parliament share in the member's belief that charities are a vital part of communities right across Canada. That is why since 2006 our government has taken some notable actions to help bolster charities and allow them to keep doing the great work they do in our communities.

In budget 2010, our Conservative government announced it would move forward with a plan to reform what is referred to as a disbursement quota. This reform is intended to reduce unnecessary red tape to better allow charities to focus their time and resources on their charitable activities and helping their communities.

For the benefit of the House, I will relay a small sampling of the feedback we have received on this particular budget 2010 announcement.

Imagine Canada applauded it for providing the following:

...greater flexibility for charities as they seek to meet the increasing and changing needs of Canadians....

The [disbursement quota] added layers of red tape and reduced flexibility in responding to the needs of Canadians and communities. ...[it] will help charitable organizations, especially smaller and rural ones, to better plan their activities to meet the real needs of their communities.

The Salvation Army cheered it by saying:

The removal of the quota will provide The Salvation Army; one of Canada’s largest charities, with increased flexibility....

We are very pleased with this announcement. The proposed changes will allow us to better respond to the needs of the people we serve in 400 communities across Canada.

Finally, someone the member for Mississauga East—Cooksville may be somewhat familiar with, the Community Foundation of Mississauga's executive director, Eileen MacKenzie, explained:

We applaud the government’s decision to reform the disbursement quota policy. ...[it] will lessen the administrative burden on our charities, direct more resources to addressing community needs and enable them to plan more effectively for the future.

This is a specific example of a helpful initiative our Conservative government has undertaken to support Canada's charitable sector. Today's proposal deals with the accountability of these registered charities, specifically regarding the compensation given to those employed by such organizations.

To put this debate into context, I believe it would be informative to look at how charities are regulated in Canada. First, responsibility for the regulation of registered charities is divided between the federal government and provincial and territorial governments.

Within the federal government, the Canada Revenue Agency, or CRA, regulates registered charities. The CRA is responsible for applying the provisions of the Income Tax Act relating to registered charities. Beyond income tax considerations, the regulation of charities is constitutionally under the jurisdiction of the respective provinces and territories in which they operate.

As mentioned earlier, recent reforms have given CRA more powerful compliance tools when regulating the charitable sector. The ultimate compliance tool is the ability to de-register a charity. If a charity is deregistered, it immediately loses its ability to issue tax receipts to donors. It also may become taxable on its existing assets. In addition, it must transfer its charitable resources to another charity within a specified period of time or pay a revocation tax to the government. Clearly, considering the special tax treatment that registered charities receive, excessive compensation for those employed by them is not something that donors or everyday taxpayers would approve.

That is why, currently, if the CRA comes across a situation where a registered charity is not fulfilling its charitable purposes and/or there is undue personal benefit, such as compensation clearly in excess of fair market value, CRA can take strong corrective action.

Under the present system, for the first infraction by a registered charity, CRA can impose a tax of 105% of the amount of the undue benefit. If a charity repeats such an infraction within five years, the penalty increases to 110%. In addition, CRA can immediately suspend the tax receipting privileges of the charity. Finally, if the problem is ongoing and repeated, CRA can move to deregister the charity completely.

Before concluding, I want to state that our Conservative government firmly believes that Canadians who donate their hard-earned money to charities should have the proper tools available to ensure that those organizations are accountable, and that is why we took action to improve accountability.

Up until last year, CRA had only required charities to report on the compensation for the five highest paid employees and indicate limited salary ranges, with the last threshold being $119,000 and over. Our Conservative government did not believe that to be sufficient and brought in changes. Now we require charities to report the 10 highest paid positions, double than before. What is more, we expanded the salary ranges, with the last threshold being $350,000 and over. I note that all of this information is available publicly and online for all to view at

Our new accountability rules will improve transparency, allowing those generous men and women in Canada, who donate their own hard-earned dollars, the information they need to make their charitable giving decisions with peace of mind.

Without a doubt, our Conservative government has taken action to both encourage charities to serve our communities across Canada better, while at the same time improving transparency surrounding their actions.

We are clearly committed to accountability and transparency in the charitable sector. While the tax system already has tools in place for both the regulation of compensation in the sector and to guard against undue personal benefit, we are always open to exploring other ways to strengthen it.

As Bill C-470 successfully passes second reading and advances to the finance committee, however, we again both welcome and urge a very comprehensive discussion at that stage. That discussion will provide an essential opportunity to hear directly from those in the charitable sector and explore their questions and concerns.

Income Tax ActPrivate Members' Business

11:30 a.m.


Andrew Kania Liberal Brampton West, ON

Mr. Speaker, “Salaries at some charities make a mockery of the concept of charity”. That is a quote from the member for Mississauga East—Cooksville, and she is correct. That is why I wish to congratulate her on introducing this bill which seeks to protect and stand up for donors, recipients of charitable funds, and taxpayers. I am honoured to be a seconder of this bill.

The purpose of this bill is twofold: first, to limit the global compensation of employees of charities to $250,000 per year, which is a substantial sum; and second, to allow full public disclosure of the incomes of the top five employees of charities.

In terms of the analysis of the bill and the $250,000 limit, the practical effect of imposing this, if it were to be exceeded by a charity, would be to provide the minister with the discretion to revoke the charitable status. This would not be automatic. It would allow the minister to use discretion in a particular circumstance if there were some reason that this should not take place. As well, there is an effective date of 2011 for this bill to provide ample time for transition purposes.

There are multiple reasons to support this bill. First, we must protect the recipients of charity, Canadians in need. We must ensure they are not taken advantage of and that the money raised to help them actually reaches them to the greatest extent possible. Every dollar spent on an executive that is in excess of what is reasonable is a dollar taken away from a recipient, and that must end.

Second, we must protect donors. Most donors are ordinary people who dig deep into their pockets in order to help others. It is simply unfair to these ordinary donors, ordinary Canadians, to allow such executives to abuse their generosity and, frankly, to earn far in excess of what most Canadians earn.

Third, we must protect charities and the charity system itself. Every year Canadians dig deep and contribute billions to 85,000 registered charities. They will not do so if they believe the system is broken, if their trust has been violated and, frankly, if their money is being wasted on exorbitant compensation packages for executives.

The SickKids example, which has already been mentioned in the House today, is relevant. When the Toronto Star broke the story that the head of the SickKids Foundation took home $2.7 million in salary and severance in one year, people were rightly shocked and outraged.

Think about the average donor who is providing a donation of $30 or $50, whatever it may be, digging deep to help. Think about the recipients of charities who need that money to live. When they hear that somebody is making $2.7 million from moneys that should be used to help, they are outraged and they should be.

What is important in terms of the integrity of the charitable system is that once the SickKids Foundation story broke, it hurt the foundation. There was a backlash from donors. The foundation had to set up a specific hotline to take questions and address concerns. The SickKids Foundation received a 10% decrease in donations and had to lay off 38 staff members.

I ask, how is it right that that individual received $2.7 million in one year, and then the foundation itself was hurt by a decrease in contributions and 38 innocent Canadians received a pink slip, a layoff notice?

If this legislation had been in place at the time, it would have stopped this. The foundation would not have been allowed to pay $2.7 million to that executive. The SickKids Foundation would not have received a 10% reduction in contributions, and those innocent 38 people would not have been laid off.

It is instructive to reflect upon the recent changes the Conservatives did make for disclosure provisions. The disclosure provisions, although admittedly an improvement, are not enough. The $2.7 million salary was only learned of because the foundation also operates in the United States and had to file there.

The changes that have been made by the Conservatives create a continuing problem, because despite the new filing requirements introduced by them, there are no exact salary figures or names of the highest paid individuals that must be disclosed. Instead, charities must identify the number of people who earn a salary within a certain range, with a top range of “$350,000 and over”.

Using the SickKids Foundation as an example, if that foundation had not also operated in the United States where there are strict filing and disclosure requirements, and we only had the benefit of the new regime that the Conservatives introduced, the only thing we would have known is that at least one person, if not more, at the SickKids Foundation made more than $350,000. We would not have had the right to know that $2.7 million had been paid to an individual. Although the changes introduced are an improvement, they do not go far enough. This private member's bill must be supported in order to ensure that we have full disclosure of this information.

The other reason we must support this bill is to protect taxpayers. In the most recent year, the taxpayers of Canada contributed almost $3 billion in federal tax credits. Every Canadian has the right to know the salaries of such executives and provide reasonable limits to these taxpayer-supported activities. We are supporting these executives in their positions. We have a right to know how much they are making and we have a right to set reasonable limits on what that income is.

In terms of integrity, it must be remembered that in 2007, Canadians donated a total of $10 billion and volunteered 2.1 billion hours. If that goes down because people do not believe that the system can be trusted and people are being treated unfairly, Canadians will suffer. Six years ago, in 2004, the United States recognized it had a problem regarding disclosure. The IRS announced new enforcement efforts to identify and halt such abuses. The IRS said:

We are concerned that some charities and private foundations are abusing their tax-exempt status by paying exorbitant compensation to their officers and others.

In Canada, nothing has been done to remedy the situation apart from the small change that I noted, which does not solve the problem.

This outrageous compensation is a serious problem in Canada. It is not limited to the one example of the SickKids Foundation that I noted. That perhaps is what broke the story, but it is not the only example. One reporter stated:

It seems for some of Canada’s best known charitable organizations, charity begins in the chief executive’s office.

Some of Canada's largest and best known charities pay some of their top officials more than $300,000 per annum, which is more than deputy ministers make. Frankly, it is more than most Canadians make. Chief executives at Plan International Canada Inc., the Heart and Stroke Foundation of Ontario and York University Foundation all were paid more than $300,000 last year. The BC Children's Hospital Foundation and Toronto General and Western Hospital Foundation paid top executives between $250,000 and $300,000 per year.

Some people will oppose this legislation, but I ask why. First, why are they afraid of transparency? What are they trying to hide? Why would they not want to disclose what the top executives actually are making on an individual basis? Taxpayers have a right to know. Donors who provide the money have a right to know. Canadians who are receiving the benefit of these dollars have a right to know.

Second, is $250,000 not enough? It is enough, but more than that, setting a limit will level the playing field in Canada. Tim Price, chairman of the York University Foundation board, said it paid CEO Paul Marcus $394,000 in salary and bonus last year and that the payment “was in the context of the competitiveness of talent to be able to get a first-class person”. The foundation would not be required to have paid $394,000 to that individual if there was a cap of $250,000.

Frankly, people would not be seeking to move around and drive up the cost of compensation packages if there was a limit. Canadians who need these funds would actually receive them.

There are very large Canadian charities that already are compliant, such as Big Brothers Big Sisters of Canada, United Way of Canada and the Red Cross. There is no reason that everybody cannot be compliant.

Income Tax ActPrivate Members' Business

11:40 a.m.


Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I am pleased to speak to Bill C-470, brought forward by the member for Mississauga East—Cooksville, which has to do with charities.

I support this bill very much. I am little concerned because there has been some misinformation of which I think members should be aware. Probably the best reason this bill should go to committee is to enable the charitable institutions and foundations to provide some input. I understand there was concern in the charitable sector initially, but that actually has turned around. I believe there are some 85,000 charities.

I approach this not from the standpoint that I am looking for some charity that is doing something that it should not be doing. What is needed is greater transparency, openness and accountability. We are talking about taxpayers' dollars. When people make a charitable donation, they claim that donation and get the appropriate tax credit on their income tax return. All Canadians, all taxpayers, are subsidizing the contribution to various charitable organizations and foundations. From that standpoint, it is very consistent that disclosure of relevant information should be made available to all Canadians about how their tax dollars are being spent.

I do not think there are many people who have not heard some conversation about exactly who is getting how much and how much of their dollars is actually hitting the ground and helping the people they want to help. The United Way is asked this question all the time, and it reports on it and it boasts about it. Campaign 2000, which helps deal with the issue of child poverty, is constantly looking at how much money is actually going toward helping people and promoting the alleviation of child poverty in Canada.

It is extremely important that we look at this from the accountability aspect.

Today I received a letter from the Prime Minister's chief of staff, who subsequent to his appearance before the ethics committee on the subject matter, provided copies of the letters that he sent out to the ministers indicating that it is a responsibility of the government to promote accountability, transparency and openness. I think the House concurs. It is the law. It is a charter right.

I know where some of the confusion has arisen for some members who may have looked at this. It is one of those cases that if we just hear the short version, or the summary, we may get an impression which is not reflective of the full detail of the bill. The summary of this bill states, “This enactment amends the Income Tax Act to revoke the registration of a charitable organization, public foundation or private foundation if the annual compensation it pays to any single executive or employee exceeds $250,000”, period.

That is how the summary was drafted, but that is not exactly what the bill would do. The bill would not revoke the registration of a charity, or a private or a public foundation, if it pays any one person more than $250,000. The bill requires the disclosure and the minister may look at it. It is not absolute; it is optional. It is a matter that the minister may invoke if there is clear abuse. There is some ministerial discretion. This is not a black and white situation, that if a charity pays somebody over $250,000 that, all of a sudden, the registration of the charity is revoked.

I hope that members will look carefully at this. This is one question that has to be totally clarified in committee to absolutely ensure, to the assurance of all hon. members, that this bill is not an attack on charities.

The government deputy House leader had made an indication that in his view there was a royal recommendation required for the bill, and I think he made an interesting argument. However, the bill effectively only amplifies or adds further criteria under which the minister responsible for the act in question, the Income Tax Act, can have the latitude to take decisions if it is appropriate.

The Speaker ruled that in fact there was not a need for a ways and means motion for this amendment to the Income Tax Act. I think members should take some solace from that. The bill is a sound bill, it is a clean bill and it should go to committee to hear from the stakeholders who may be affected and may be concerned.

It is always good when we can have people on side. They will come before committee, they will ask their questions or make their representations and things will be clarified. Then it is not just what a half dozen people happen to say during the debate at second reading in the House based on their own information or knowledge, but it is the experts. It is those who are in the business and who can provide the details and the commentary on the legislation and its implications and make recommendations for changes to the bill if necessary. That is what the committee is for.

We cannot make amendments here on second reading. We can say that we have some concern about this aspect and we hope that the committee will do that. Those are the kinds of things that happen from time to time. The committee stage is extremely important.

I believe this is an important bill, primarily from the standpoint of the openness and transparency requirements and the accountability requirements that we expect from all matters as they relate to governing the taxpayers' dollars.

The member in question has been here for more than 20 years. I know she does her homework. Anyone who knows the member knows that she is a member of great integrity. She has not brought many bills before this place, but when she does, look out, because she is responding to critical issues in which the public interest is to be served.

I am not going to get into this, but people may want to look at her background. The member has a reputation for bringing matters that I think are extremely important for us to consider.

This is not an inconsequential bill. It is a significant bill. It is a bill that I believe will get a thorough hearing at committee, and I believe it will pass at all stages and become law.

There was a question that came up in one meeting I was at that I want to raise as well, about whether or not this would affect universities, and people were talking about foundations.

As we know, many hospitals have a fundraising wing that is separate from the hospital operations themselves, separate and incorporated entities to raise money for hospitals. These would be maintained separately. The bill would not affect hospitals or other foundations that are set up for that purpose. It is a small detail, one question only, but it is the kind of question that has come up.

Therefore I wanted to rise in the House today to say that I have taken the time to look at it. I heard the member present her bill in debate. I heard her represent her position last week in the media. After people asked their questions and got the answers, to fully understand, it is amazing how the outlook on the bill has turned so dramatically.

I want to leave it at that, and I want to encourage all members of Parliament to please vote for the bill on second reading and to encourage the committee to do appropriate hearings to ensure that we make good laws and wise decisions.

Income Tax ActPrivate Members' Business

11:50 a.m.


The Acting Speaker Conservative Barry Devolin

The hon. member for Mississauga East—Cooksville, a five-minute right of reply.

Income Tax ActPrivate Members' Business

April 19th, 2010 / 11:50 a.m.


Albina Guarnieri Liberal Mississauga East—Cooksville, ON

Mr. Speaker, first let me thank members from all sides of the House who have added productively to the debate on this issue.

Bill C-470 seeks to add two ingredients to charity executive pay: reason and accountability. Salaries would have to be within reason, or the minister could take action in the interests of donors and taxpayers who often have no direct say on how their money is spent. Greater accountability will come with the disclosure of every charity's top five income earners and their salaries.

The government did make progress last year by requiring more detailed ranges of salaries, but no corporate CEO could get away with saying he just made over $350,000. Donors are paying the bill and deserve the names, positions and amounts, like any shareholder. Arguments for continued secrecy have largely withered over the past several weeks. It is simply not tenable for charities who rely on the faith and trust of donors to say they deserve salary secrecy that is unthinkable in either the government or corporate sector.

The promise of Bill C-470 is that donor awareness may be a cure for the high salaries and costs that are shrinking every donor dollar today. Bill C-470 also aims to add a measure of reason and restraint to charitable salaries. It does not seek to impose a hard cap, but simply to provide a long-overdue mechanism for the minister to restrain excessive compensation. The minister would retain the absolute discretion to act in the interests of both the cause and the donor community.

Diversionary concerns about the potential impact on the top salaries of professors and surgeons at universities and hospitals are not well founded, as most of these institutions have separate charitable foundations. For those that do intermingle operating and fundraising activities, the minister can make the obvious distinction.

Fewer than 1% of Canadians earn $250,000 a year. Charities rely on the generosity of the other 99% and need to justify the exorbitant pay of their fundraisers. When one executive was reported to have received millions of dollars in salary incentives and severance, the excuses poured in from charities: “We have to attract fundraising talent from the U.S.”; “We cannot find competent people who would work for under a quarter million a year”. Other organizations have even argued that young people will not go into charity work if they cannot make a lot of money. I wonder if I am alone in finding this somewhat ironic.

From 2000 to 2008, the number of donors in Canada was basically stagnant, growing by less than 1% annually. So the charitable sector is not attracting more donors. Total tax receipted donations grew by an average of only 5%, little better than the rate of inflation. So Canadians are donating more, but hardly enough to justify ballooning fundraising pay.

Published information with the CRA reveals even less connection between pay and performance. Without a single person reporting making over $250,000, one charity raises twice as much money at half the cost per dollar of the highest paying Toronto medical charity. So it is possible to run a charity without investment banker salaries. But exorbitant salaries are infectious and are spreading to charities great and small and even very small.

One small foundation that pays more than $350,000 actually hiked salaries by 69% over the last five years while revenue dropped 33%. Thirty-six cents of every dollar raised is now lost to fundraising and administration, double the rate of only five years ago. Paying astronomical salaries does not always deliver astronomical results. Many sports leagues have adopted salary caps to respond to similar situations where competition was raising costs far faster than revenue.

In conclusion, Bill C-470 asks the House to take a small step in curbing a free-for-all with donor and taxpayer money. Parliament alone can take a stand to safeguard the sacrifice of donors by insisting that charities deliver more transparency and ultimately more charity.

Income Tax ActPrivate Members' Business

11:55 a.m.


The Acting Speaker Conservative Barry Devolin

The time provided for debate has expired.

The question is on the motion. Is it the pleasure of the House to adopt the motion?

Income Tax ActPrivate Members' Business

11:55 a.m.

Some hon. members



Income Tax ActPrivate Members' Business

11:55 a.m.


The Acting Speaker Conservative Barry Devolin

All those in favour of the motion will please say yea.

Income Tax ActPrivate Members' Business

11:55 a.m.

Some hon. members


Income Tax ActPrivate Members' Business

11:55 a.m.


The Acting Speaker Conservative Barry Devolin

All those opposed will please say nay.

Income Tax ActPrivate Members' Business

11:55 a.m.

Some hon. members


Income Tax ActPrivate Members' Business

11:55 a.m.


The Acting Speaker Conservative Barry Devolin

In my opinion the yeas have it.

And five or more members having risen:

Pursuant to Standing Order 93, the division stands deferred until Wednesday, April 21, immediately before the time provided for private members' business.

Suspension of SittingIncome Tax ActPrivate Members' Business



The Acting Speaker Conservative Barry Devolin

The House will suspend until 12 o'clock.

(The sitting of the House was suspended at 11:57 a.m.)

(The House resumed at 12 noon)

The House resumed from March 30 consideration of the motion that Bill C-2, An Act to implement the Free Trade Agreement between Canada and the Republic of Colombia, the Agreement on the Environment between Canada and the Republic of Colombia and the Agreement on Labour Cooperation between Canada and the Republic of Colombia, be read the second time and referred to a committee, and of the motion that this question be now put.

Canada-Columbia Free Trade Agreement Implementation ActGovernment Orders



Ed Fast Conservative Abbotsford, BC

Mr. Speaker, Canada is one of the great trading nations of the world. That is why I appreciate this opportunity to speak today to the Canada-Colombia free trade agreement.

As my colleagues on this side of the House have repeatedly stated, this agreement is of critical importance to Canadian workers, businesses and investors as Canada emerges from the global recession. It will open up new doors and windows of opportunities at a time when Canadians need them the most. At the same time, this agreement is also a critical piece in helping Colombia establish lasting peace and prosperity for its citizens.

Let me begin by recognizing the significant progress that Colombia has made in recent years to overcome its troubled past.

Decades of internal conflict, much of it related to the international drug trade, have challenged Colombia's security and human rights record. While human rights and security challenges remain, the Colombian government has made substantial strides in recent years to overcome these challenges.

I want to say upfront that Canada supports Colombia's efforts to meet these challenges. Protection and promotion of human rights and the rule of law here at home and around the world are at the core of Canada's engagement with Colombia. Indeed, our government has made human rights a priority. Our government's vigilant stand against those who threaten the most basic of human rights has been recognized around the world in all our engagements.

The free trade agreement with Colombia, together with its parallel agreements on labour co-operation and the environment, is but one of several initiatives that support Colombia's efforts toward greater peace, security, prosperity and full respect for human rights. We can and should be proud of this record. Our government believes that engagement, rather than isolation, is the best way of supporting change in Colombia.

Lest there be any doubt, I want to emphasize that in recent years personal security in Colombia has improved. The engagement of the global community and international organizations has significantly improved the personal security conditions of the vast majority of Colombians.

Let me give an example. A couple of years ago, a Colombian citizen visited me in my office and we discussed some matters that were totally unrelated to this debate. However, before she left, I could not pass up the opportunity to ask her what things were really like in Colombia. I asked her to please be honest and tell us what the situation was like in that country. She said told me that over the last 10 years, its security had improved markedly. In fact, she said that her family, her neighbourhood and friends felt much more secure today than they did 10 years ago. This was an average Colombian citizen telling the truth about the situation in Colombia.

While there remains much to be improved in Colombia, its government has made considerable progress in its fight against the drug cartels and against paramilitary and rebel groups. In fact, we would be remiss if we did not take notice of the efforts that have led to the formal demobilization of over 30,000 paramilitaries and the weakening of the two primary guerrilla groups in that country. These are key developments in Colombia's efforts to break the cycle of violence.

Colombia also has a justice and peace law that provides the legal framework for truth, justice and reparations. Is the human rights situation in Colombia perfect? Of course not. What is important, however, is that we measure the significant progress that Colombia has made over the last 10 years. What is clear is that, more and more, Colombia is developing a measurable respect for the rule of law, a value that Canadians hold very dear. What we also should not forget is that Colombia is one of the oldest democracies in Latin America.

With the support of the international community, the Colombian government authorities and related civil institutions have undertaken a series of actions that are contributing to increased peace, security and prosperity in that country. It is vital for Canada and other free and democratic countries to pursue policies of engagement and support for peace in that country.

This free trade agreement helps us do just that. Engagement, rather than isolation, will be the key to a safer and more secure Colombian future. Canadians can be very proud of their role in assisting our Colombian partners along this path.

Canada closely monitors the human rights situation on the ground in Colombia and regularly raises issues concerning human rights in meetings with Colombian officials. In fact, Canada continues to be an active member of the Group of 24, a number of countries which facilitate dialogue between the government of Colombia and international and national civil society organizations. Indeed, in 2009 Canada and Colombia established formal senior level consultations on human rights and those discussions continue to this very day.

Canada maintains this open and frank dialogue on human rights with the Colombian government at the most senior levels. Our engagement in Colombia includes support for development, peace and security initiatives. In the last five years, Canada has disbursed over $64 million through the Canadian International Development Agency.

CIDA has gradually focused its programming on children's rights and protections, while also supporting economic growth opportunities that contribute to reducing poverty in Colombia. Our projects have also prevented the recruitment of children into illegal armed groups and ensure their reintegration into their communities.

Other projects have supported environmentally sustainable agriculture to provide alternative livelihoods to growing illicit crops for the drug trade. Indeed, sustainable agriculture, in turn, contributes to food security for the many poor communities in Colombia.

I also point out that Canada's global peace and security fund disbursed over $18 million in Colombia since 2006. This fund is helping to promote peace in Colombia and the region and is also promoting the protection of the rights of victims and the strengthening of the Colombian judicial system.

There is much more but, unfortunately, my time is limited. However, this agreement takes human rights very seriously. Indeed, Canada takes human rights very seriously. Our commitments under this agreement prove this fact.

At the same time as the free trade agreement with Colombia was signed, we also signed two parallel agreements on labour co-operation and the environment. These agreements commit both nations to work together to ensure high levels of protection for workers and the environment.

Canada believes that trade and investment liberalization can go hand in hand with labour rights and the environment. Indeed, engagement may be the very best way of moving countries that are in transition to a more robust environmental and human and labour rights regime.

Canada and Colombia also commit to providing acceptable protections for occupational safety and health for migrant workers and for employment standards such as minimum wages and hours of work. Failure to respect international labour organization principles and to enforce domestic laws is subject to penalties for violations, any penalties accrued to a special fund to be used to address and resolve matters identified through the dispute resolution process.

All of this is to say that protection and promotion of human rights are at the very core of Canada's engagement in Colombia. They are fundamental to the Canada-Colombia free trade agreement. As I said at the outset, we believe in the very positive role that trade and investment can play in a nation like Colombia.

Our approach of engagement offers an alternative to the protectionist, isolationist thinking that we see in some parts of the world and, indeed, in some parts of this very House from opposition parties. By promoting economic development and opening up new doors to prosperity, free trade agreements like this can strengthen the social foundations of countries. That is what we are doing in Colombia. For a country like Colombia, free trade can open up new avenues for success. It can create new jobs and provide a solid foundation for families to build a future.

I encourage the members of the House to support this very worthwhile agreement.

Canada-Columbia Free Trade Agreement Implementation ActGovernment Orders

12:10 p.m.


Scott Simms Liberal Bonavista—Gander—Grand Falls—Windsor, NL

Mr. Speaker, in many respects, I agree with the rules of engagement that my colleague outlined in his speech. I am not sure if we agree on all the details, but, nonetheless, the rules of engagement for trade and to create a better society have certainly borne fruit over the past 20, 25 years in many nations, not just Colombia, with which we trade.

He talked about the two parallel agreements. The one in particular I would like to talk about is the labour agreement. What specifically in this agreement puts Colombia in line with how we in Canada treat our labour practices? I would like some instances of policies that are truly Canadian or, in his case, British Columbian. Perhaps he could illustrate some of the new arrangements in Colombia about which he would like to talk.

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12:10 p.m.


Ed Fast Conservative Abbotsford, BC

Mr. Speaker, I thank the member for his party support of this agreement. Our government agreed to accept an amendment to this agreement, which would make even more robust the reporting requirements for some of the human rights and labour issues addressed in the agreement.

In response to his question, he is absolutely correct. There is a collateral side agreement that will signed between our respective countries, which would make much more robust the respect for labour rights in Colombia, as well as in Canada. That agreement references an international protocol and a declaration on the rights of worker, which is generally accepted by free and democratic countries around the world. Colombia has agreed to sign on to that, to respect those rights that are articulated in the agreement.

Those kinds of issues address the very concerns that some of the opposition parties, such as the NDP and the Bloc, have raised. We have gone the extra step to bring Colombia into the international community and to ensure it respects human rights and labour rights.

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12:10 p.m.


Robert Carrier Bloc Alfred-Pellan, QC

Mr. Speaker, I listened closely to my colleague from Abbotsford, who spoke to us at length about human rights as it pertains to the trade agreement with Colombia.

Why is he not taking into account all the agencies that are opposed to this agreement because human rights are not being respected in Colombia?

The Canadian Labour Congress is opposed to it, as are the Canadian Council for International Cooperation, Amnesty International, the FTQ, Development & Peace, KAIROS, the Public Service Alliance of Canada and Lawyers Without Borders. The list goes on. All these agencies monitor the respect of human rights in our dealings abroad.

We know that Canada has to protect its good reputation when it conducts business in other countries.

The hon. member said that the agreement will respect human rights. Why is he disregarding what all these agencies are saying?

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12:10 p.m.


Ed Fast Conservative Abbotsford, BC

Mr. Speaker, first, I want to highlight the fact that this free trade agreement is perhaps the most robust our country has ever signed with any country around the world. We recognize that Colombia has come through decades of strife, of drug-related violence and of abuses of human rights. Over the last decade, Colombia has made significant progress.

I made it clear right from the start that there was something that distinguished the Conservatives from the Bloc and the NDP. We believe in engagement. The Bloc and the NDP believe in isolating countries. They believe that by isolating countries, that is how we get them to buy into international norms for human and labour rights. That is not our approach.

Our Conservative government believes in engagement. We believe this agreement is the toughest we have ever signed when it comes to those kinds of issues.

I also point out that if we look at Chile and the free agreement we signed with it some 13 years ago, that agreement has moved Chile to having one of the most respected human rights regimes in South America.

The Conservatives are getting things done. We are improving the lot of the people of Colombia, as well as enhancing our own trading relationships, which are critical to our country.

Canada-Columbia Free Trade Agreement Implementation ActGovernment Orders

12:15 p.m.


Robert Carrier Bloc Alfred-Pellan, QC

Mr. Speaker, on this last day before elected members of the House are muzzled by the Conservative government, I want to add my voice to that of my colleagues who have spoken so far in opposition to Bill C-2, An Act to implement the Free Trade Agreement between Canada and the Republic of Colombia.

The Canadian government's main motivation for entering into this free trade deal is not trade, but rather investments. This agreement contains a chapter on investment protection that will make life easier for Canadians investing in Colombia, especially in mining.

If all the agreements protecting investment that Canada has signed over the years are anything to go on, the agreement between Canada and Colombia is ill-conceived.

All of these agreements contain provisions allowing investors to take a foreign government to court when it adopts measures reducing the returns on their investment. Such provisions are especially dangerous in a country where laws governing labour and the protection of the environment are, at best, haphazard.

When it comes to the environment, one need only look at the Conservative government's track record to know that it is not a top priority.

By protecting Canadian investors against any improvements in living conditions in Colombia, Bill C-2 could well delay the social and environmental progress that is needed in that country. This is where the government's Bill C-2 has serious shortcomings.

Colombia has one of the worst human rights records. To advance human rights in the world, governments generally use the carrot and stick approach. They support efforts to improve respect for human rights and reserve the right to withdraw benefits should the situation worsen.

With this free trade agreement, Canada would forego any ability to bring pressure to bear on the Government of Colombia. Not only is the Canadian government giving up the carrot and the stick, but it is handing them over to the Colombian government.

The Conservatives are showing once again what little regard they have for human rights by supporting a country where workers are treated like merchandise and their rights are easily violated.

The government keeps telling us that it has also negotiated a side agreement on labour and another on the environment. We know that these types of agreements are ineffective. They are not part of the free trade agreement and investors could with impunity destroy Colombia's rich environment, displace people to facilitate mine development and continue to murder trade unionists.

We should also mention that the free trade agreement between the United States and Colombia, signed in 2006, is also stalled on the issue of human rights. This agreement will not be ratified by Congress until Colombia strengthens its legislation to protect minimum labour standards and union activities.

The Canadian government, which boasts about following in the footsteps of its American big brother in many areas, including the environment, and waits for its decisions, is missing out on the opportunity to follow its lead in this case.

Colombia is Canada's fifth-largest trading partner in Latin America and the Caribbean. It is the seventh-largest source of imports from this area. So, Canada has more important trading partners than Colombia.

In recent years, trade between Canada and the other Latin American countries has increased considerably, which has meant a smaller share of trade with Colombia than with other countries in the region.

Canada exports primarily cars and car parts, and grains, which represented 23% and 19% respectively of our 2007 exports, and which primarily favour Ontario and the prairies. Most of Canada's investments in Colombia are in the mining industry.

In light of this information regarding trade between Canada and Colombia, we are having a very hard time understanding why Canada would want to sign a free trade agreement with Colombia. When two countries enter into free trade agreements, it usually means they are special trading partners who trade sufficiently to make it worthwhile to lower trade barriers.

Let us be candid: Colombia is not a very attractive market, considering that trade between the two countries is quite limited. The main products that Canada sells there, like grain from western Canada, have no difficulty finding a buyer in these times of food crises. Exporters in Quebec and Canada would see limited benefits, at best, from signing this agreement.

We imagine that some Canadian companies might be attracted, but we find it hard to see how the public in Quebec or Canada will benefit at all from this.

The real danger is that with Colombia, the Conservative government is handing responsibility for deciding what is in the best interest of the people over to multinationals. That is not reassuring.

Colombia has one of the worst human rights records in Latin America. The Conservatives keep saying that the human rights situation in Colombia has improved significantly. It may be less catastrophic than it was a few years ago, but it is still far from ideal.

If we take a close look at the situation in Colombia, we see that it is one of the worst places in the world for respecting workers' rights. Trade unionists are targeted because of their activities. They are threatened, kidnapped and murdered. The statistics are devastating. Since 1986, 2,690 trade unionists have been murdered. Although these murders declined somewhat in 2001, they have increased since 2007. That year, 39 trade unionists were murdered and another 46 were murdered in 2008, an 18% increase in one year. According to Mariano Jose Guerra, the regional president of the National Federation of Public Sector Workers in Colombia, thousands of people have disappeared and the persecution of unions continues.

Colombia does not have a legal framework to govern collective bargaining. In fact, about 95% of the public sector workforce is not covered by collective bargaining legislation. Colombian civil society obviously opposes this agreement. The Coalition of Social Movements and Organizations of Colombia delegation is refuting the claims made by the Colombian and Canadian governments: the human rights situation in Colombia has not improved.

I, along with my Bloc Québécois colleagues, will be voting against this bill, which puts business interests ahead of human rights in Colombia.

Canada-Columbia Free Trade Agreement Implementation ActGovernment Orders

12:25 p.m.


Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, I was pleased that the member mentioned that Colombia is Canada's fifth largest trading partner in Latin America, so that it does not rank very high at all in the scheme of things.

The question is why is the government spending so much political capital trying to get this agreement through and why is it so fixated on it, when the government normally likes to follow the Americans? What do we see happening in the United States?

We met with house representatives and senators in Congress in February. Each Republican we talked to, although not all, was basically lamenting the fact that the agreement had no chance of getting through the United States Congress. It has been kicking around for three or four years now. It did not get through before Obama became President and now it has no hope to getting through.

Undaunted by that, the member for Kings—Hants comes up with an amendment that he thinks is going to help get this deal through. As a matter of fact, this deal was dead until the Liberals resurrected it. This deal was going nowhere and it has been saved by the Liberals and the member for Kings--Hants.

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12:25 p.m.


Robert Carrier Bloc Alfred-Pellan, QC

Mr. Speaker, I thank my hon. colleague for his question. I simply do not understand why the Conservative government is going ahead with this proposed agreement. The only possible explanation is the trade interests and the interests of investors already present in that country, who want to have complete freedom to do whatever they like in order to make as much profit as possible. I think proceeding in this way will tarnish the country's reputation, especially since as my colleague just mentioned, even the United States—normally the champion of free enterprise—is reluctant to sign this agreement. They might never sign it because they do not want to lose their reputation and trample on human rights in this way.