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.