Finance committee  The solution in part is some of those things. It would be important to have more transparency, so you have it across the board in the non-profit area, instead of making it.... It's not just IRFAN. With Ornge and other things, people are deliberately setting up structures. In the case of Ornge, they spent $11 million on legal fees to set up structures that largely deal with lack of transparency.

Finance committee  People don't go to jail in Canada for abusing charities, unfortunately. On my website, globalphilanthropy.ca, I've put a list of all the charities that have been revoked in the last five years, as well as the names of all the directors of those charities, as well as the reasons for their revocation, if they're provided by CRA.

Finance committee  Yes, sure. Since 2007, CRA's top two priorities have been to end abusive charity gifting tax schemes and fraudulent receipting. In 2006, $1.3 billion worth of receipts were issued that were part of just the abusive tax schemes. CRA has worked very hard to try to knock out the schemes.

Finance committee  I think the opposition parties may have some questions about it being an omnibus bill or something. I don't understand all of those issues. I can say that I think if it was just up or down on the charity transparency things, everyone would vote for the budget. I think there's more to it than that.

Finance committee  In the U.K., since 2006 when they had their new Charities Act passed, one of the things it did was say that every charity every year would have to demonstrate that it had a public benefit. Currently, the rule is that if you're applying for charity status, for the first three heads of charity, which is advancing religion, or advancing education, or relief of poverty, you don't actually have to show that you have any public benefit.

Finance committee  How do you demonstrate that? Basically, you would be showing how you are helping a sufficient segment of the public with your activities, and for most charities it's actually very simple to demonstrate it. If you're a food bank and you're handing out food to people who can't afford it, we can all understand how that would be beneficial to a segment of the public, and that's not really that hard.

Finance committee  No. The only difference is there you actually have to show that you have a public benefit, whereas here you don't. Now, I'm saying that was just when you applied to be a registered charity. But on an ongoing basis there's no requirement to have a public benefit. Basically, I think the U.K. model is wonderful in that it encourages charities to actually tell the public every year in their statements, “This is what we do that's beneficial to the public.”

Finance committee  I'll try to answer that, just to avoid others having to. I think Canadian charities are allowed to be involved in political activities. There are CRA rules on what's permissible. It's very important that charities be engaged in political activities. Also, the budget, although it had some bark about the issue, didn't really have much bite.

Finance committee  My recommendations are, first and foremost, that section 241 of the Income Tax Act should be amended so that CRA has the ability to disclose serious non-compliance with respect to the Income Tax Act. Secondly, and perhaps more importantly—and we saw it with the Ornge air ambulance issue that's been covered a lot by The Toronto Star—when you have non-profits where there is no transparency and they work with a few charities, they can get away with doing transactions that are not helpful to the charity sector.

Finance committee  Thank you, Chair Rajotte, for this opportunity to present to the Standing Committee on Finance. My name is Mark Blumberg. I'm a lawyer and partner at the law firm Blumberg Segal in Toronto. In addition to providing clients with legal advice relating to non-profit and charity law, I'm involved with educating charities on compliance issues.