[Recorded by Electronic Apparatus]
Wednesday, May 8, 1996
.1620 
[English]
The Chair: We're ready to begin. Let's see if we can make a record meeting here. We have before us John Bryden's bill, Bill C-262, formerly known as Bill C-224.
Perhaps we could begin by having John give us a summary of his bill and a rationale for it, and then I'll open the floor as to how we want to proceed. It's my understanding that this committee studied the bill. John, please begin.
Mr. Bryden (Hamilton - Wentworth): The original bill, which passed first and second reading in the House of Commons last year, would require charities to disclose the remuneration of their senior executive officers on pain of a certain penalty, a fine in the original.
Witnesses came before this committee for about two weeks and made a number of observations on the bill, some of them contentious. It wasn't necessarily a smooth-running series of witnesses. In the course of testimony I undertook amendments that addressed directly the various objections raised by witnesses. I should say, Madam Chair, that I undertook these amendments with some expert advice. The amendments to the bill that you see before you reflect, I think, a certain amount of expertise from staff and address the majority of problems that came up during testimony.
I was about to present these amendments to the committee when the committee, in its wisdom, decided to shelve discussion of the bill pending a report from Revenue Canada that looked at how far Revenue Canada could go towards meeting the aims of the original Bill C-244 through straight regulation. Indeed, Revenue Canada moved quite substantially in this direction. As a result, there were changes to the T3010 form.
However, regulation did not address some of the central themes of the original bill, including the idea that charities would have to report the remuneration on pain of some form of penalty. Madam Chair, this is absent in the regulations right now. Revenue Canada, if it receives a form improperly filled out, has to go through quite a complicated procedure to exact compliance. The only procedure it has is the revocation of charitable status. It has no other mechanism.
.1625
The amendment was to change from the suggestion of a penalty, a fine, in Bill C-224 to an amended version that gives Revenue Canada direct mechanisms for revocation of charitable status as a penalty. In other words, 180 days...certain procedures take effect leading to the revocation of status. So the amended version still has a penalty and a very important penalty.
The other thing that could not be addressed by regulation was the fact that the original Bill C-224 in its amended version looks at non-profit organizations as well, as opposed to just charities. I should say, Madam Chair, that non-profit organizations are required to put in a financial information form, but it is not a public document, whereas the charitable information form is a public document. So we currently have no means whatsoever of knowing what kind of remuneration the executives of non-profit organizations are receiving from the organization.
The original bill in the amended version would require non-profit organizations to disclose executive remuneration as well, under pain of a similar penalty - revocation of status. This is a very important advance that isn't governed by regulation.
Witnesses came before us and said, you don't want to require this of your local little league organization and that kind of thing, so the amendments address this. They put in a threshold at which non-profit organizations are required to report this information, which is, as you'll see in the documents, revenues of $200,000.
Moreover, we also don't want executives reporting remuneration when the remuneration is very modest - again, going back to the little league organization or the very small charity - so the threshold there, in the amended version you see before you, is an income of $30,000.
Madam Chair, I would invite the committee members to read the amended version and compare it with the original version, and to read also the quite extensive description of the reasons for the amendments - of which there's a French version as well, I'm happy to say - which is attached to my covering letter. I invite my colleagues on this committee to examine those documents and consider whether or not I did adequately address the questions raised in testimony. If you feel it is sufficient, then maybe at another meeting you can decide whether more witnesses are required or whether you're satisfied that everything has been done with this piece of legislation to enable us to send it to the next stage, which is back to the House of Commons.
The Chair: Are there any questions? Mr. Fillion.
[Translation]
Mr. Fillion (Chicoutimi): I want to ask you a question, Madam Chair. Is the study of this bill part of the mandate of our committee?
The Chair: Yes, I think that the committee has already studied this topic, not since I have been chairing it, but...
Mr. Bryden.
[English]
Mr. Bryden: I can answer. I had the option to send this legislation to several committees. There was a choice of several committees, and I chose government operations, with the approval of the House. Nothing is out of order here.
.1630
[Translation]
Mr. Fillion: Wasn't the issue of lobbying discussed at the Standing Committee on Industry last year? Wasn't this topic introduced at that time?
[English]
Mr. Bryden: No, that's a separate matter entirely. This bill has only been before this committee.
I was actually on the standing committee reviewing the the Lobbyists Registration Act, and maybe that's why you're wondering. I was on that committee; I was involved in that.
But no, this is entirely separate. It has never been before the industry committee in any sense.
[Translation]
Mr. Fillion: Okay. Are we going to proceed along the same lines?
The Chair: Yes.
Mr. Fillion: What makes you want to have such a legislation passed? Did you notice that in the past there had been some abuse from the part of some non-profit organizations? Has there been any abuse in some areas? For what reasons do you want this bill to be debated?
[English]
Mr. Bryden: My colleague, I can share with you quite an extensive file of research in the area of charities and non-profit organizations and the problems that pertain specifically to the...
To date I've examined about 400 T3010 financial information returns of charities. I would say that about one-quarter of them fail to fill in the lines requiring the disclosure of their executive salaries. That's one-quarter of them.
The problem is that Revenue Canada has no mechanism, and has had no mechanism, to force compliance. In fact, there are all kinds of problems with charity information returns.
In the case of non-profit organizations, like the Canadian Automobile Association, for example, there is no way for the public to know anything about their internal financial activities - in particular, the remuneration given to their officers.
The basic theory behind Bill C-224 and its analogue, Bill C-262, is that the taxpayers have the right to see how their money is being spent by bodies that take advantage of the taxpayer either directly or indirectly.
A charity benefits from the taxpayer by virtue of being able to issue receipts and not pay taxes, so it is in fact being subsidized directly and indirectly by the government. A non-profit organization benefits by not having to pay taxes, so it is indirectly supported by the taxpayers.
The theme I am pursuing through all my activities with respect to the not-for-profit industry is that we need transparency in this industry, just as we would demand transparency of ourselves as parliamentarians, and would demand it of any level of government that is supported by the taxpayer. This simply addresses that.
While I have found abuse, and I have certainly found evidence of abuse, which I can share with you - my colleague and I actually have brought this forward to the committee in the past - the really fundamental question here is that good charities, good non-profit organizations, those that are well within acceptable standards, have no problem with this legislation, have no problem with transparency, have no problem with the disclosure of salaries. If somebody is worth the money, they can bear scrutiny.
[Translation]
The Chair: Mr. Fillion, do you have any other comments?
Mr. Fillion: I still have two brief questions. The document submitted by Mr. Denis Lefebvre of Revenue Canada (Customs) makes some corrections in response to the points you have been making. Among other things, we are being told they are currently contemplating adding some questions to the T3010 form that would more or less answer your concerns. I don't know whether you are aware of that.
Did the minister of National Revenue already answer your questions? Is the department ready to make some corrections along the lines of the points you are raising?
.1635
You are saying that these organizations take advantage of the taxpayers' money. If that money comes from the federal government, we should be able to find it somewhere in the estimates. If it came from Heritage Canada, we would find a section in the department estimates where the organizations that receive a grant would be listed.
I looked at the documents submitted by Revenue Canada and it seems to me that the department wants to make a good many corrections in that regard. Do you think that is sufficient?
[English]
Mr. Bryden: On the second question first, this is not an issue involving the transfer of moneys more or less to charities from the taxpayer. This is an issue of transparency.
Fundamentally I think we would all agree that where a taxpayer's money is being used directly or indirectly, there should be transparency, and all the more so because the government, in the most recent budget, has said that it is getting out of the business of various services in society and is devolving these to charities.
We would expect to have the same level of accountability for the charitable industry and not-for-profit industry as we would for the bureaucracy. Unfortunately this doesn't exist at this stage, not only because the amount of reporting information is incomplete but because there is no penalty, no sanction, requiring organizations to fill out the forms honestly and completely.
This is happening particularly in the area of remuneration. As I said, I found one-quarter of the charity information returns were leaving this information with respect to remuneration blank.
Revenue Canada has come forward, and has made changes to this T3010 form. It now does require the top five officers of a charity to disclose their salary ranges, but there is still no legislation requiring a penalty. In other words, if these top five executives chose not to disclose the information, or chose to disclose it dishonestly, there is still no penalty. It is still not possible to do anything about those charities, to bring them to account.
My bill, Bill C-262, provides a direct mechanism for Revenue Canada to act against an organization that refuses to comply. If it doesn't comply and supply the information, after 180 days the charitable status is gazetted and the charitable status is removed.
We do not have that ability right now. There is no mechanism to discipline charities if they fail to comply.
Second, it requires legislation to get non-profit organizations to disclose any information. My colleague, you have to understand there is absolutely no transparency whatsoever when it comes to non-profit organizations, like the Canadian Automobile Association and many others.
There are 60,000 non-profit organizations that are not paying taxes. They do not have to show in any way to the public how they are spending their money. This bill is the first step towards requiring public accountability of non-profit organizations, by beginning with the question of requiring the disclosure of the top officers' salaries.
So Revenue Canada has moved as far as it can go by regulation, but it can go no further, and this is why we need legislation.
[Translation]
The Chair: Do you have any other questions, Mr. Fillion?
[English]
Mr. Gilmour, any comments?
Mr. Gilmour (Comox - Alberni): Yes. I think this bill makes good sense, and I support it. However, we're at a bit of a disadvantage, because you're the only surviving member of this committee after we got the shuffle.
In your opinion, without reinventing the wheel, are there areas we should be looking at with witnesses, or should we just move this ahead to the next level? Do you think it's been well researched, well looked into?
Mr. Bryden: In absolute fairness, I don't think we have to bring outside witnesses back before the committee. But I think we should give Revenue Canada one last chance to review the amendments, to make sure there hasn't been some event in the six or eight months that needs to be addressed in these amendments.
Now, I will tell you that the amended version you see was very carefully worked out with various officials. This is not something that came out of the sky. This was a very serious attempt to write the private member's legislation that would stand the test, and would stand the test absolutely. So I believe it is good legislation, but I'd be satisfied to bring back Revenue Canada.
.1640
But I would add a little observation here. There is a tendency among officials who appeared before the committee to not want to see actual penalties applied. I think there's probably tradition here where someone likes to avoid having to actually bring in penalties.
This is where, of course, it will be a matter for your judgment. But I take the view - and this was originally in the legislation passed on first and second reading - that in principle Parliament has declared that it approves of having penalties in this kind of legislation.
I would be content to bring Revenue Canada officials back basically to ask them if there is any technical flaw in this bill as written that would require consideration by this committee. But as to other witnesses, I really don't see the point, because if you examine the transcripts, you'll find that they did have their day in court and you will also find that we did examine their concerns very carefully.
The Chair: Perhaps we can then make available the transcripts of the witnesses so that you can peruse them, and we could ask Revenue Canada for a response.
Is it the will of the committee to have a written response, or would you prefer to have them before us so that we can ask questions?
Mr. Harvard (Winnipeg St. James): Can I speak first?
The Chair: Sure.
Mr. Harvard: Are you finished, Mr. Gilmour?
Mr. Gilmour: Yes, go ahead.
Mr. Harvard: Well, first of all, let me correct Mr. Gilmour. I have a tie to the previous period: I was the chairman. So I am somewhat familiar with the bill.
You may not know, or you may know, Mr. Gilmour, that the bill did create all kinds of consternation, especially within the communities of non-profit organizations and charities.
I think Mr. Bryden has to be applauded for bringing forward some significant amendments.Mr. Bryden said that this has not been idle work. Mr. Bryden said that at the beginning as well when he brought in the bill before it was amended. He thought the bill was unassailable.
Well, it wasn't. It is assailable. I don't know whether it is a question of how much it's improved. When I read it with my layman's grasp of the legislation, I would say that Mr. Bryden has come forward with some improvement.
How far? It depends on what Revenue Canada would say. I agree with John that Revenue Canada should come. I wouldn't be happy with just a written presentation. I would like to have Revenue Canada here.
But in the light of four amendments, it would be extraordinary to me that we would not invite back organizations that had serious concerns. We're talking about thousands and thousands of Canadians out there, ordinary Canadians. We're supposed to be in this era of populism and grassroots, and we're not going to consult them again. Surely a member of the Reform Party would want to hear from the grassroots.
So I would be prepared to take the next step, which is to invite back Revenue Canada and invite some of the representatives, and ask them for their input in light of Mr. Bryden's amendments.
The amendments might be quite in order, yet again they may not be. I don't know. I'm not prepared to prejudge. I'm not. I think that if we want to be responsible to ourselves and to others, this is what we have to do. So that would be my recommendation.
Any time you change legislation it always has ramifications of one kind or another, sometimes beyond our gaze, especially the gaze of those of us who are laymen and are quite amateurish in this area.
So I think that if we are deemed to be doing our job properly, we're going to have to have another round of hearings involving both Revenue Canada and some of the major groups that speak for a large number of the people in the communities that would be impacted.
Mr. Bryden: I thank my colleague for his remarks. In my very limited experience of the committee work and the examination of legislation, it seems to me that normally what happens is that legislation is put before the House, witnesses are called, and then amendments are made to that legislation. But I'm not aware that a pattern has been established that witnesses are brought back after the amendments are made with the consultation of the appropriate authorities. I certainly didn't do that.
.1645
Surely if we did that as a regular pattern of committee work, nothing would ever be accomplished, no legislation would leave the committee, because every time you change legislation, of course, there are going to be people who will debate those changes.
I will say, Madam Chairman, as the witnesses were heard, their concerns were evaluated with a great deal of dispassion, if I may say so. The evaluation was an expert evaluation; it wasn't just by me. I did have assistance from very competent staff who were very familiar with the issues and how to write legislation pertaining to Revenue Canada regulations and Revenue Canada issues.
I would suggest, Madam Chairman, that with respect to my colleague's remarks, before we make a decision about whether we need to bring back other witnesses, let's bring back Revenue Canada.
I agree it shouldn't be a written response. Let's bring them back to speak to this legislation, and see whether they feel there is a real need to go back to the open hearing process. With all its other important work, I don't want this committee to be tied up with a bill that's a very small dimension of the problem.
The Chair: Any other comments? Mr. Jackson.
Mr. Jackson (Bruce - Grey): Madam Chair, just for the record, I'm kind of anti-legislation in a lot of respects. I think we have so much legislation on the books that I sometimes wonder about putting layers on it.
There is a very good discussion going on here. I admire my colleague in his efforts to try to make things transparent. I think salary should be transparent. I'm not too sure if in our regulations we have anybody...for instance, what the Province of Ontario does. It says that if a person makes over $100,000, it should be divulged.
I think we're coming in to a new economy. There's a lot of turmoil in the way governments are run. Governments are trying to be efficient.
What's happening in our economy is that we have three emerging sectors. We have, of course, the public sector, which is the Government of Canada, and the provincial and municipal governments; we have the private sector; and we have this third sector, which is non-profit, and for the most part there are lots of volunteers and so on in it. I wouldn't want to impede those organizations in any way, shut them down or turn them off, so I need more information.
The Chair: I think Mr. Bryden has given us a very comprehensive overview. It makes sense to bring Revenue Canada before us. I'm reluctant to call in witnesses at this time.
Perhaps we could hear what Revenue Canada has to say. We can make the transcripts available to all members, and then we'll proceed from there. Are there any objections or other comments?
Mr. Bryden: I certainly don't think we should proceed until we make sure the legislation is clean - and technically clean - and doesn't have a problem that has developed -
The Chair: And I think Mr. Jackson has a point that we're overgoverned. However, it's question of good sound legislation that has to go forth.
If I could be so presumptuous as to read an editorial comment to this discussion...
Mr. Harvard: If I could just say one thing, I'm not going to object to Revenue Canada being invited back, but I'm going to reserve the right to ask the committee for others to come back as well. I'm not prepared to give up on invitations to others, but if we want to take an invitation to Revenue Canada at least as the next step, that's fine with me.
The Chair: Agreed?
.1650
You have before you the report to the House. Do you have any questions or editorial comments?
[Translation]
Mr. Fillion: I would like to get some information. Firstly, I must say that I agree with the text that has been prepared. However, if I am not mistaken, we are going to send this report to the House and that is the reason for my question. Is the Senate under the obligation to answer such an invitation and, if so, must the matter also be debated in the Senate?
Is Parliament supreme with regard to the text we are going to send them? Is it an order or...? At any rate, I would like to get some information.
The Chair: I think that you weren't here last Thursday. We are going to invite them next week, but they won't necessarily...
Mr. Fillion: It is not certain that they will...
The Chair: It is not mandatory.
Mr. Fillion: Even if the House requests that they come?
The Chair: Yes, even if there is unanimity. Personally, I shall table it in the House. Even if everybody were in agreement, they would be under no obligation to come before us. Nothing can force them to do so. The motion has to be passed by the House and should just one member vote against the motion, we could not bring the matter forward.
Mr. Fillion: And if there was unanimity in the House, could the Senate refuse to come before us?
The Chair: You were not here last week when I said that we would invite them, but that they would be under no obligation to come. We are going to pass the motion to invite them and they may agree to come.
Mr. Fillion: Even if they are invited by the House?
The Chair: One never knows. They may accept to come.
Mr. Fillion: In that case, it is true that some legislation might be necessary to show that Parliament...
The Chair: What would you say if they told us they wanted us to make a presentation before them?
Mr. Fillion: No problem, we would go. The main thing is meeting with them and being able to discuss...
The Chair: But we have to start here. Let's not be pessimistic. They may very well wish to meet with us.
Mr. Fillion: May be.
[English]
Mr. Harvard: Madam Chair, I have one question, because I wasn't here last week either. Where is the unanimity required?
The Chair: In the House. I table it in the House and then I seek concurrence. If there's one dissenting voice in the chamber, then it dies.
Mr. Harvard: Okay.
[Translation]
The Chair: Mr. Fillion, do you have any other questions?
[English]
Is it unanimous that we accept this to be presented in the House?
[Translation]
Some hon. members: Yes.
The Chair: Okay.
Mr. Fillion: Madam Chair, can you let us know when we are going to table the report?
The Chair: Tomorrow.
Mr. Fillion: Tomorrow morning?
The Chair: As early as possible.
Mr. Fillion: Tomorrow morning at 10?
The Chair: Yes.
.1655
Mr. Fillion: Very well.
The Chair: Is there anything else?
[English]
We have the main estimates on the agenda. There are six potential meetings that we can schedule. Is it the will of the committee to have the following appear before us: Canadian Mortgage and Housing Corporation, Canada Post Corporation, Minister Massé, Minister Marleau, Minister Dion and the Public Service Commission? Are there others that you would like to see come before us? Is this a suitable agenda for everyone?
Mr. Harvard: How about the Auditor General?
The Chair: That's not within our mandate.
Mr. Harvard: No? It was before. Have things changed?
Mr. Bryden: You see, John? Move away to [Inaudible - Editor]
Mr. Harvard: I know, I should never stay away.
[Translation]
Mr. Fillion: I would prefer this to remain open so that, as the topics will be...
The Chair: We are always going to stay with...
[Inaudible - Editor] ... open committee.
Mr. Fillion: Very well.
[English]
Mr. Harvard: Can I make a comment? It just reminded me of something. As the Parliamentary Secretary to the Minister of Public Works, I think Ms Marleau supports both her own appearance and that of Canada Post, for which she is responsible. I think the only request she has made - I haven't spoken to her personally about it, but to someone in her office - is that she would like to keep the two presentations separate. In other words, if people have questions about Canada Post, then leave them for when Canada Post comes.
She has a huge department and I think we would be served better if we tell Ms Marleau that we won't ask any questions about Canada Post, we will deal with issues relating to other departments - Central Mortgage and other areas. I think it's a reasonable request. I see no reason to jump all over the place when we'll have an opportunity to speak to all of the officials, including the ministers, anyway.
Mr. Gilmour: I have some difficulty with that because the minister is responsible for a large area, including CMHC and Canada Post. I don't expect to be able to concentrate on Canada Post, but I do not want to close the door as there may be other questions in that area. She is responsible for the corporation, so I don't feel I should be limited to not asking those questions.
The Chair: It was a request and we had to reply.
Mr. Harvard: I hope Mr. Gilmour doesn't speak for the entire committee. What we're talking about here is a courtesy. Canada Post is a crown corporation.
Maybe what we could do then, Mr. Gilmour, if you're... I don't know what questions you have that could not be put to Mr. Clermont, that you feel must go to Ms Marleau. As a courtesy, perhaps you could submit the one or two questions in advance to Ms Marleau.
As I say, I didn't speak to her about this, but since she has such a vast empire, if she could narrow it a little she could probably give you a better answer. If you leave it absolutely wide open, you know what you're going to get anyway. You're going to get officials answering many of your questions.
It's not a matter of anyone preventing you from asking your questions. It's a matter of courtesy.
The Chair: Mr. Bryden.
.1700
Mr. Bryden: I think we have to remember that ministers have to be briefed before they come before us to answer questions. This particular minister does have a very large mandate, and while I appreciate that we would like to ask any question any time we have a minister before us, I'm very much on John's side. It's not very constructive to put a minister through a whole bunch of questions she's not prepared for. We want her prepared to answer the questions as adequately as possible.
I think that's a good suggestion. If she's before us and you have a question outside what we shall say will be her basic briefing for that day, submit the question either in advance or at the time so she can reply subsequently. That's just a suggestion.
The Chair: Of course, we can't censor -
A voice: No, no.
The Chair: - members' questions when the minister appears.
Mr. Bryden: That's not the suggestion.
The Chair: But to get a complete answer, if there's an area you're particularly interested in, perhaps you could at least alert the minister about which areas you want to pursue. This way at least, when she appears before us, you can get complete answers.
Mr. Gilmour: I'll talk to my colleague Mr. Harris, because he's the one who looks after that sector of the portfolio.
The Chair: We could also reserve the right to follow up questions in writing, so you can ensure you're satisfied with -
Mr. Gilmour: If there's detail, if Canada Post is going to be the one answering the questions... I guess if it were more of a political question, a more philosophical approach to Canada Post, it would be more in the minister's domain.
The Chair: Thank you.
Mr. Harvard: The only thing I would point out is in reference to Canada Post. As you know, the Radwanski commission is working now. My guess is that if you put questions - and I'm not suggesting that you shouldn't have any questions about Canada Post - both the minister and Clermont would be somewhat limited in answering some of the questions lest they be seen prejudging some of the commission's work. That would be my educated guess.
The Chair: Monsieur Fillion.
[Translation]
Mr. Fillion: I am in agreement with what has been said. It is a big department. It is huge and it deals with many areas.
On the other hand, we should not close the door because of that and say: "She doesn't know the answers in many of those areas". But surely, we should give the minister an opportunity to meet with us on more than one occasion.
We could tell her: "Listen, Madam, at some point in time, when we are going to discuss Canada Post...". We will then invite her again. We can invite her a few times, especially with regard to this area. We would then have an opportunity to ask her more complete questions.
We should not close the door on that in order to enable her to be well briefed on some specific topics. We could set some guidelines right from the start and say: "This week, we are going to talk about Canada Post and, on another occasion, we'll talk about something else."
When Mr. Dion comes before us, we will debate one single topic, Privy Council. We might ask her to come before us every time we want to deal with a very specific subject matter. We will need more than one meeting with Mrs. Marleau.
The Chair: This committee will always keep its door open.
[English]
I'm sorry, Mr. Jackson.
Mr. Jackson: This is just an observation, Madam Chair. I think it's a good discussion. The minister is human like everybody else. I note with interest that when I went to the Auditor General's meeting the other day, he had the room swarming with bureaucrats. I noted with interest there's a pile of money sitting there just waiting and if we want to bring a minister in who has a lot of departments and they bring in all those bureaucrats, we're wasting taxpayers' money too, so we ought to use some common sense in our approach.
.1705
The Chair: On that note, is the schedule before you acceptable?
I have only one other question to put before you. The Canadian Federation of Independent Business is willing to come before us to share its survey results. If it's the will of the committee, we can slot them in. Is it agreed?
Some hon. members: Agreed.
The Chair: Thank you all. This meeting is adjourned.