Serge Cardin

[Canada Not-for-profit Corporations Act, February 12th, 2009]

Madam Speaker, I agree with much of what my colleague from the NDP said. I think, though, that we can do both.

Not-for-profit organizations are capable of raising money and even going out and getting grants without necessarily spending too much time on administration. They spend more of their time providing services to people who need them. The government is modernizing the act precisely in order to encourage this.

We still need to add some positive elements to the mix. In addition, I think the hon. member is right when she says the government should do more to help people who volunteer. These organizations are often left on their own. Good people spend a lot of time and even some of their own money helping the disadvantaged and the less well-off in our society. However, if governments, whether federal, provincial, Quebec or even municipal, started paying people who give so much of their won time, their entire budgets would probably be thrown off kilter. Government should definitely help these organizations. But should it provide unlimited support? I do not think so. There should be targets, which are more beneficial in terms of the return to society.

I think, therefore, that not-for-profit organizations that solicit money from the public should be regulated and government should make an effort to ensure that volunteers are also “rewarded” and, most importantly, helped to provide services to the most disadvantaged.

[Canada Not-for-profit Corporations Act, February 12th, 2009]

Madam Speaker, I am not sure I understand what my colleague means when he says that the bill would make it more difficult. The Canada Corporations Act obviously had to be adjusted and modernized. In the old days, when people got their charter, they just turned around and went to work. They did not really have to produce any reports on the corporation itself. They had to report in a somewhat more regulated way when the corporation could issue charitable receipts.

According to my interpretation, not-for-profit organizations are not necessarily and automatically entitled to issue income tax receipts, even if they can raise money.

There are some nuances here, but I do not see anything in the bill that would make it any harder or easier for people to volunteer for not-for-profit organizations. I think volunteers are better protected than they used to be. Some things need to be cleared up, though, so they are not overprotected. People do accept a certain amount of responsibility. If they always exercise due diligence, if they do the right thing, they will no longer have to worry about being sued directly because it is clearer now with this bill that the corporation can be sued directly.

[Canada Not-for-profit Corporations Act, February 12th, 2009]

Madam Speaker, I thank my colleague for her question.

In the past, the directors of many not-for-profit organizations and the organizations themselves have been prosecuted. As I said at the start of my remarks, an organization is like a natural person. It may be prosecuted for various reasons under a number of environmental or civil liability laws.

In the matter of transparency, reference was made to the public disclosure of financial statements and many other matters I did not mention, such as the protection of members' privacy and the fact that the list could not thus be made available to everyone. There is also the matter of due diligence by directors.

Directors are protected when they act appropriately. In some other organizations, this may not always be the case. Some directors do not always necessarily act appropriately and could be prosecuted. And so, some directors who are being prosecuted and have made errors will have their costs covered. In this regard, while there may be transparency and accountability, it is still not clear whether a person is hiding errors behind due diligence. In this situation, costs would be covered in the case of mismanagement.

So there are a number of points. It may seem relatively complex, but a degree of transparency can be obtained through this bill. As I said earlier, the bill must be returned to committee to have certain aspects refined and, possibly, to address concerns of legal counsel, who have serious questions about various aspects.

[Canada Not-for-profit Corporations Act, February 12th, 2009]

Mr. Speaker, I have the honour to speak on Bill C-4. I will begin by saying that the Bloc Québécois is in favour of this bill in principle—until there is evidence to the contrary, let me assure you.

The Canada Not-for-profit Corporations Act, as it stood before, was what you might call a bit behind the times. The time had come to modernize it. Introduction of this bill is a step in the right direction.

The new legislation will, of course, take into consideration the financial means and the size of the organization with respect to the implementation of its administrative mechanisms. The intent is to provide the organization with a more flexible framework for presentation of its financial statements, and also for setting up its bylaws. The intent also is to considerably improve the efficiency and transparency of the process of incorporation of not-for-profit corporations.

The system of letters patent will be replaced by an as-of-right system of incorporation, thus greatly facilitating the process. As well, the credibility of not-for-profit corporations in the public eye will be enhanced.

This bill will be referred to a committee. It will, however, perhaps become necessary to hold broader consultations, above and beyond the simple parliamentary committee framework with experts attending. We may also have to involve community organizations.

Let us examine the context per se of the creation of the Canada Not-for-profit Corporations Act. The present act comes under the Canada Corporations Act. The types of corporations governed by part II of the Canada Corporations Act include—as we know—corporations that are not-for-profit, but religious, charitable, political or mutualist in character, as well as others.

In recent years, many people have voiced concerns about the obsolete nature of the Canada Corporations Act, and the fact that its provisions no longer meet the requirements of the not-for-profit sector, the not-for-profit sector of today. A number of stakeholders therefore called for the act to be reformed and improvements made to the framework that regulates that sector.

Around July 2000, Industry Canada produced a consultation paper entitled “Reform of the Canada Corporations Act: The Federal Not-for-Profit Framework Law”. This led to the introduction of a bill that was first known as Bill C-21, which was introduced on November 14, 2004, by the Liberal government, but never made it past second reading.

On June 13, 2008, during the 39th Parliament, it was the Conservative government that introduced Bill C-62, but as we all know, an election was called, an election that I would describe as not only hasty, but even premature. When Parliament resumed on December 3, 2008, a similar bill was introduced by the Minister of State (Small Business and Tourism). Once again, because the House was prorogued, it was put off indefinitely.

Finally, in January 2009, Bill C-4 was introduced.

This bill has very clear objectives. It proposes a new Canada not-for-profit corporations act that would establish a more modern and transparent framework for such organizations. The operational framework for not-for-profit corporations would be much more similar to corporate governance under the Canada Business Corporations Act.

In more concrete terms, this bill will simplify the incorporation of not-for-profit corporations. It will also clarify the rights and responsibilities of boards and establish defences for officers and directors in the event of liability. It will also provide members with increased rights to participate in the governance of their corporation. Furthermore, it will establish a better mechanism for oversight of the corporation's accounts.

This bill seems to be relatively complex for some. It is divided into 20 parts in order to establish a new framework for not-for-profit organizations. The first thing, of course, is to identify the purpose of the bill, which is to incorporate corporations without share capital so that they may exercise their activities.

There is a definition of soliciting corporation. This term, of course, means any corporation that solicits public funding as well as any corporation that receives public donations or government grants.

The second part points out that the current letters patent system is being replaced with an as-of-right system.The director, after receiving and reviewing the required documents, can immediately issue a certificate of incorporation.

It also sets out the capacity of a corporation as a natural person. This section will have to be further developed because surely the related legal aspects and responsibilities are implied. Madam Speaker, we are both responsible for our actions. And so an organization will obviously be responsible for its actions, which will simultaneously protect the director, the board, the president and directors.

Of course, this would require that organizations keep accounting ledgers as well as a list of members and directors and make these documents available to members while still protecting privacy.

Allow me to digress for a moment. I am not going to go into detail about each of the 20 parts of this bill, but I must tell you that I was an accountant in another life. If I was not auditing, I was examining accounting ledgers, and if I was not doing that, I was preparing financial statements.

Unfortunately, I often found that certain organizations were led and controlled and that basically only one person participated in the organization. One person could solicit funds, collect them, use them and, unfortunately, sometimes use them for activities other than those that appeared in the charter at the time.

That needs to be mentioned.

We have to modernize the act so that similar situations do not arise again. Naturally, it gives them permission to borrow, to issue debt obligations and to invest as they wish. There are several technical aspects with respect to issuing debt obligations and the use of trust indentures. It outlines the role of the trustee if an organization were to be placed in receivership.

This bill also requires organizations to have at least one director or at least three in the case of a corporation that solicits funds. I am wondering about the element of responsibility. Sometimes I wonder how the act can state that there will be at least one director. That means that some organizations will have only one director. Does that also mean that there will be only one member? As I was explaining earlier, I am familiar with such cases. At least with this bill, if soliciting is involved, there must be three directors. Thus, public money donated by individuals has at least a chance of being used appropriately.

There is also a set of bylaws. The members must fulfill certain conditions. Thus, the bylaws set out the type of voting and the related voting rights. The voting procedure, the bylaws governing how members are to hold meetings, the calling of a meeting and quorum are all set out in the bill.

Another part talks about financial statements. It states that the organization must make available to its members the financial statements and any report submitted by its public accountant. It requires soliciting corporations to file a copy of their financial statements and public accountant's report with the director, who in turn makes them available to the public.

A multitude of non-profit organizations never submitted their financial statements, not even to members. With this bill, at least, the financial statements prepared by the public accountants will be forwarded to the corporation's director, who in turn will make them available to the public. That is a very important element.

The level of financial review required will be determined by the organization's revenues. For low-revenue organizations, a public accountant will conduct a review and submit a report. For medium-revenue organizations, if the board of directors so authorizes, the public accountant will review and report once again. For high-revenue organizations, the financial statements will have to be accompanied by an audit report. Here again, the reports will have to be submitted to the director of corporations, as I said earlier, and made available to the public.

The bill also refers to fundamental changes to what I will not call the charter, because that will no longer exist, but the organization of the not-for-profit corporation.

The bill includes provisions pertaining to proceedings to liquidate or dissolve a corporation. It also lists the powers a court can confer on an inspector who investigates a complaint filed by an interested person.

The bill contains provisions on offences. It also brings things up to date by allowing not-for-profit organizations to communicate with their members electronically. This bill therefore modernizes the legislation and allows for electronic equipment. That is something I wanted to mention.

Of course, there will be a three-year transition period for organizations to which part II of the Canada Corporations Act applies, which will now be recognized as corporations under the new legislation. There are some very important issues concerning this new bill, such as the fact that there is no classification system for NPOs in the Canada Corporations Act. Bill C-4 also does not include a classification system.

In the government's view, the new act does not need a classification system because the framework is permissive and flexible. Permissive can sometimes have a negative connotation. Nevertheless, this is a situation that exists within the new legislation because it is permissive and flexible and of course allows organizations to choose how to implement the relevant provisions. The accent is instead on the adoption of a set of rules intended to guide them in the conduct of their business, rather than imposing a system of rules they would be required to adhere to.

The fundamental concept underlying a classification system is that the corporations would be treated differently. Some would find themselves with more rules imposed on them by the State than others. As proposed here, most corporations would be treated in the same way and could enact various levels of regulation according to their requirements and the specific wishes of their members.

However, the opposite is true, according to the national charities and not-for-profit law section of the Canadian Bar Association. They feel that not including a general classification system is a major flaw in this bill. There is indeed a considerable difference between, for example, a charitable or benevolent organization and a mutualist one, which I will explain.

I am being told that I have two minutes left, so I will move along rapidly. Let us take the mutualist organizations. The resources of these organizations are directed toward the membership, whereas the resources of charitable organizations are directed toward an object, which may be very specific individuals other than the members. The act has provision for this. In these organizations, the money is not supposed to be used for the membership, but in some it may be, depending on the characteristics of the members and the object and vocation of the organization.

I am getting the sign that my time is very nearly up, but I would like to caution my colleagues with respect to one important aspect of this bill.

As far as respecting the jurisdiction of Quebec is concerned, at the present time section 154 of the Canada Corporations Act stipulates that the federal minister may grant a charter to a corporation if it carries on objects of a national, patriotic, religious, philanthropic, charitable, scientific, artistic, social, professional or sporting character, or the like.

It would appear, however, that clause 4 of the proposed legislation would not oblige the not-for-profit corporations to stipulate in their by-laws the object they intend to pursue.

It could happen that the objects chosen and determined by the corporation encroach on Quebec's areas of jurisdiction. There therefore needs to be provision for that situation in the act so that federal corporations do not encroach upon provincial areas of jurisdiction.

Let us therefore return this bill to the committee and carry out a thorough study of all the—

[Canada Not-for-profit Corporations Act, February 12th, 2009]

Madam Speaker, things come in threes, as the saying goes. I have seldom had occasion to address questions and comments to my colleague three times in a row. This third time proves that I enjoy talking to my colleague, through the Chair, of course.

It appears that at some point the committee will hold a lengthy period of consultations on this bill. Can my colleague tell us whether a series of consultations has already been planned? A number of round table discussions were held to draft this bill. Will the consultations take place in committee only, or will there be other consultations on Bill C-4?

[Canada Not-for-profit Corporations Act, February 12th, 2009]

Madam Speaker, as you can see, I am enjoying this dialogue with my colleague through you.

I imagine that there have been a number of not-for-profit organizations in his riding with all kinds of situations at various points in time. The new legislation says that there can be a member on the board of directors, and other organizations can have several if they solicit funds.

I was once an accountant, and I sometimes encountered not-for-profit organizations that had one person in charge of absolutely everything, including solicitation and the investment of funds collected from donors.

I would say that, in some cases, it was relatively easy for organizations to get their certificates under the Canada Corporations Act. In many cases, they did not act in accordance with their stated objectives and sometimes even abused them. We have to consider the importance of protecting the public and the community in terms of assets because there are often tax breaks associated with that.

I would like to ask my colleague a question. In general, even if the bill seems to meet organizations' expectations and appears to have received unanimous support in nearly every respect, without regulations governing classification, how are unclassified organizations supposed to operate, and what will the minister's responsibilities be when giving these organizations a certificate?

[Canada Not-for-profit Corporations Act, February 12th, 2009]

Madam Speaker, despite the clarity of my colleague's presentation, I would still like to ask a question.

With respect to developing regulations, the possibilities are wide-ranging, given that there really is no classification within not-for-profit organizations. Conflicts can arise concerning the goals of not-for-profit organizations because, as my colleague said earlier, there are corporations that are charitable and there are others that are mutualist.

Basically, the goal of charitable organizations is to provide services to people other than members and administrators, whereas mutualist organizations provide services directly to members. At some point there must be a regulation or a classification that would change how the act is applied in different situations. The Canadian Bar Association has also expressed its views, and it is important that this go back to committee so that it can be discussed.

I would like to hear my colleague's thoughts on this, since he sits on the Standing Committee on Industry, Science and Technology. How does he feel that we should proceed?

[Budget Implementation Act, 2009, February 11th, 2009]

Madam Speaker, I would like to thank my colleague for her heartfelt speech on the plight of the most vulnerable members of our society.

With respect to employment insurance, the government thought it had come up with the idea of the century—the only idea of the century—when it decided to tack five weeks of benefits onto the end of the benefit period. That is not a bad idea, but there is no way people will be convinced that the government made a real effort. In addition, there is a time limit on this measure. It will be in effect until 9-11-2010. Maybe the government chose 9-11 to symbolize the fact that what is happening in the employment insurance system is a real disaster. In fact, that has been the case for the past decade.

In addition, the government deliberately sets the contribution rate so as to limit possible benefit increases. I would like to hear what my colleague has to say about the financing board the government created, which has sole authority to set contribution rates.

[Budget Implementation Act, 2009, February 11th, 2009]

Mr. Speaker, first of all, allow me to congratulate my colleague for Jeanne-Le Ber, a dynamic and very eloquent member. I would like to come back to a point that he discussed just now, equalization. He said that it is a truly complex matter and I agree. However, it is quite simply a formula which, at the end of the day, distributes wealth based on the capacity of each province, including Quebec, to generate revenue, namely taxes.

This type of formula is mechanical and normally removes any subjectivity. Both the Liberals and the Conservatives have manipulated or fiddled with this formula. I would like my colleague to talk about this, for the benefit of all the Conservatives and Liberals, so that they truly realize what this government has done by fiddling with the equalization formula.

[International Trade, February 11th, 2009]

Mr. Speaker, the government signed a free trade agreement with Colombia even though the Standing Committee on International Trade called for negotiations to be suspended because of human rights problems. A recent UN press release condemned the murder of 17 indigenous Awa people by an irregular armed group.

What is the government waiting for to suspend ratification of the free trade treaty with Colombia until it shows greater willingness to protect basic human rights?