[Recorded by Electronic Apparatus]
Thursday, May 4, 1995
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[English]
The Chairman: Colleagues, ladies and gentlemen, I would like to bring this meeting to order. Today we are going to hear from four different groups concerned about this private member's bill, C-224.
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The format we are going to follow is something like this, and I ask for your cooperation. I want to hear from the four groups consecutively before we go to rounds of questioning. If it's all right with the representatives, we'll hear from the Canadian Society of Association Executives first, followed by the Physicians for a Smoke-Free Canada, followed by the Pearson-Shoyama Institute, followed by the National Anti-Poverty Organization.
There's one thing I want to bring to your attention. We have two hours, and I can assure you that two hours is not a lot of time, especially when we have four different groups. I urge you to keep your opening remarks as short as possible. For example, I've looked at the text of the opening remarks of the Physicians for a Smoke-Free Canada. I'm hoping to keep these opening remarks to five or six minutes. There is no way this brief from Physicians for a Smoke-Free Canada is going to be read in five or six minutes. If all of you take, let's say, 25 minutes, that will leave roughly an hour and a half for questioning, and I think you will find that this bill has enough controversy in it that it will generate a lot of questioning.
We will start with Mr. Shand from the Canadian Society of Association Executives. He has with him the chair of the board, Paulette Vinette. Go ahead, please.
Mr. Jack Shand (President, Canadian Society of Association Executives): Thank you very much, Mr. Chairman and members of the committee.
Let me first tell you that the Canadian Society of Association Executives is a voluntary membership organization of over 2,000 members. Those members are the individuals employed by non-profit organizations, which include business groups and professional groups, as well as registered charities.
There are objectives that we share with Mr. Bryden. The existing laws and regulations governing charities and non-profit organizations are like a patchwork quilt developed over decades and even centuries.
Mr. Bellemare (Carleton - Gloucester): A point of order. Is the issue here a member of Parliament or is the issue the private member's bill? In the introduction there's a reference to an MP sitting here, and I think we're addressing a bill, not a member.
The Chairman: I don't think we can instruct a witness on how they should approach a bill. If they want to approach a bill that way, I think it's their business, Mr. Bellemare.
Go ahead, Mr. Shand.
Mr. Shand: As I indicated, there is certainly the need for reform. The nature of that reform should take the shape of a new federal act, which will consolidate and modernize existing laws.
Second, we support the objectives of accountability and transparency. We have nothing to hide and we support that claim. However, our analysis of Bill C-224 and what we have heard confirms that this legislation is not about the public disclosure of salaries and benefits paid to directors and officers in tax-exempt organizations.
[Translation]
Ms Paulette Vinette (Chair, Board of Directors, Canadian Society of Association Executives): The objective of Bill C-224 is to force one or more employees of these organizations, that is to say individuals who are neither officers nor members of the board of directors, to disclose their salaries.
In our view, this requirement has no legal basis since indidviduals are required to disclore their income based entirely on their employment status even though the individuals in question have no legal authority to set the policies of the organization for which they work.
We are willing to support Bill C-224, as the House of Commons has approved it in principle, but with two or three minor changes, as long as the bill applies only to directors and senior officers. It needs, therefore, a major amendment.
[English]
Mr. Shand: The amendments we propose to the bill are therefore related to the sponsor's intent, as related to you on Tuesday of this week; that is, public declarations of employee compensation.
If members have copies of the legislation handy, we would like very briefly to go through a series of our amendments.
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First, the entire preamble and short title is irrelevant if you agree with the objectives as stated on Tuesday. To repeat, at issue is not the disclosure of the remuneration of directors and senior officers so the preamble and title must be rewritten. I'm not sure of the legal implications, but I expect that when the intent of legislation dramatically differs from what is presented and approved by the House of Commons, the need may exist to start anew.
Second, in clause 2, the definition of the minister responsible is clear. We propose three definitions be added to the clause as follows: first, a director, trustee or senior officer is a person elected or appointed at the annual general meeting of the non-profit organization or charity with the authority to set policy; second, a payment for the purposes of this act is a direct grant provided by the Government of Canada for the general use of the organization; and third, a contract, contribution or project funding for goods and services between the organization and the Government of Canada or its agent is excluded from this act.
Clause 3 as written includes some non-profit organizations and charities, but not all. As you heard in testimony Tuesday, that definition needs to be extended to include every tax-exempt organization covered under section 149 of the Income Tax Act. To do otherwise will make this legislation discriminatory.
Our fourth amendment in clause 3 is to the sentence:
- and receives, directly or indirectly, any payment from the public funds of Canada
- We recommend that the word ``indirectly'' be removed. We also recommend that the entire
sentence be amended to read:
- and receives a direct or sustaining grant from the Government of Canada
If the legislation is passed containing the term ``indirect'', we respectfully suggest it will be difficult to quantify the value of an indirect financial benefit for purposes of legal sanction.
Paragraphs 3(1)(b) and 3(1)(c) that follow this statement, that is, payment from the public funds of Canada, on the bottom third of page 1 of the legislation, are unclear and should be removed. Our fourth amendment renders them unnecessary.
Amendment six is to clause 4 of the legislation, which describes the exemption for contracts. We believe it should be broadened to exempt specific project funding and contributions.
Our amendment seven concerns the definition of directors and senior officers. We recognize that paragraph 3(5)(b) enables the Minister of National Revenue to set a definition, but we think this committee should do so.
[Translation]
Ms Vinette: The most important point relates to the concern we expressed earlier with regards to the obligation for employees to disclose their remuneration. We were very happy to hear that you intend to seek the opinion of the privacy commissioner. That being said, we urge you to carefully consider the general public's need to know and the public's right to privacy. Even if legal experts give you the go ahead, we must also assess carefully the precedent that will thus be created.
Indeed, the bill could be interpreted by Canadians in the following way. If you get any payment from the government, you must disclose your income. In which case retired people, the unemployed, farmers, students, disadvantaged people and wealthy businesses could view this bill as a foot in the door.
[English]
Mr. Shand: We suggest there are alternatives to Bill C-224 that will satisfy the public's need to know.
Is the issue one of salaries being paid or where the government is spending tax dollars and for what purpose? We believe the latter will be more informative for Canadians.
The information that is already being collected and an amendment to Bill C-43 will add even more information about advocacy groups funded by government. All of this information should be available to the public.
There is the question of the degree of funding. Consider this example. An organization in your riding is either non-profit or charitable. It may be a health facility, educational institution, recreation centre, or business association. You want to help a student obtain a summer job at this organization. The summer job is partially subsidized by the federal government.
How do you think the president or executive director will respond to your request if, by providing that student with a job and accepting partial funding, which might represent less than 1% of the organization's entire budget, the senior employee will now have to publicly declare his or her income?
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My last point concerns improved understanding and compliance measures. Revenue Canada stated in its testimony before the committee Tuesday that it is now contacting all organizations, filing information returns when specific lines are left empty. The problem will disappear or the non-compliant organizations shall.
Last fall I met with the sponsor of this bill in his constituency office in Dundas and offered our help. We repeat that offer to you today. We will ask the Department of Industry to work with us on a new act that modernizes the laws governing non-profits and charities. It will need your support and that of your colleagues.
We agree there is more information that the public should know. Our preference, though, is to create a systemic and strategic solution and not add one more piece to a quilt already burdened with ad hoc contributions.
[Translation]
Ms Vinette: So as not to monopolize your time, we have prepared for the committee a summary of the three new requirements that Bill C-224 would impose, as well as of the exciting requirements which, in our view, do not have to be repeated.
[English]
We have filed a copy of our presentation this morning with the chair and the clerk.
[Translation]
We thank you for hearing us.
[English]
The Chairman: Thank you very much. I want to remind the witnesses that took a little over nine minutes, so it doesn't take very long for time to fly.
Next we're going to hear from Physicians for a Smoke-Free Canada, Mark C. Taylor, president, and Cynthia Callard, executive director.
Mr. Mark C. Taylor (President, Physicians for a Smoke-Free Canada): Thank you for the opportunity to present the views of Physicians for a Smoke-Free Canada on the proposed Bill C-224.
The issue of accountability of those groups that receive public funding is a very important one, and it would be hard to argue that anyone should receive public money without careful scrutiny.
I want to talk to you today about our reasons for supporting the concept of accountability and the misrepresentations it could present. I also want to speak frankly about my fears that the benefits this bill could provide to the public could be overshadowed by the damage inflicted by the spirit in which it was proposed.
I am a general surgeon and am currently undertaking a Masters of Science degree in clinical epidemiology. I've been involved with Physicians for a Smoke-Free Canada since 1988 and I am currently the volunteer president of this organization.
In my view, PSC has made an extraordinary contribution to public health in Canada and has achieved it with very meagre resources. Yet there seem to be some in Parliament who believe their mission is to discredit Canadians who are working for little or no compensation in an effort to improve their country.
Physicians for a Smoke-Free Canada was established ten years ago by a small group of physicians who realized that the tobacco industry had free and easy access to our children and were determined to do something about it. They could see that the prevention of tobacco-caused disease was far cheaper, easier and much more humane than its treatment. They enhanced their work as primary health care providers through voluntary public health promotion. This small group, by taking enormous personal financial risks, worked tirelessly to establish PSC as a force to be reckoned with.
In 1985 Revenue Canada granted us the privileged status of a registered charity.
We currently have an office in downtown Ottawa and one paid staff person, the executive director, Ms Cynthia Callard. In the last audited year our revenues and expenses were under $70,000. We are frugal, our administrative costs are minimal and our overhead is low. We have never at any time received a government grant.
For your information I have tabled with the clerk a copy of our articles of incorporation, as well as our most recent published annual report. These would have been available to anyone who had bothered to take the time to ask us.
Since our initial years, we have had personal and financial contributions from close to 1,500 individual Canadian physicians. In addition, we have received occasional grants from the corporate sector.
Like many small non-governmental organizations, there is a group of less than ten physicians who are at the real heart of this organization. These members of the board of directors and officers have donated hundreds of hours of their time and expertise and have never received any consideration in return, either monetary or otherwise. I personally have spent at least 1,000 hours working directly on the affairs of this organization and have nothing to show for it save the personal satisfaction of knowing I am making a difference.
It is very hard to understand the motives of those who use disinformation and innuendo to condemn those of us who spend our evenings and weekends trying to protect children from addiction to lethal drugs.
The primary goal of PSC has been to prevent tobacco addiction, as well as to promote smoke-free environments and encourage smoking cessation. We research, write articles, publish scientific papers, present at scientific meetings and provide information to the public and the media. We provide expertise to government through committees. I've been a consultant on tobacco to many national organizations. At no time have any of these bodies provided any recompense in any way, shape or form.
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We volunteer our time because we know that 40,000 Canadian families per year is too many to be grieving the loss of someone they love to something that could have been prevented. Having said all that, you can imagine our dismay that instead of being praised and thanked for a tremendous bargain the public and the government is getting by having us do this work, we were viciously attacked by an elected official who made no effort whatsoever to contact us for information about our work.
PSC was among a handful of community service organizations selected for condemnation by the author of this bill. We were condemned as being part of an industry where misrepresentation is a common business practice, where individuals award themselves huge salaries.
It is tragic that election to the House of Commons permits some to publish innuendoes and half-truths under the guise of research. To call this report research is an insult to the thousands of Canadians who really do research.
We would happily divulge the information that this bill requires because it would protect us from deliberate misrepresentation. However, there are some serious flaws and omissions in the bill as written. Disclosure of salaries and benefits will provide only one small picture of any organization's activities.
Perhaps Parliament should be interested in knowing what these groups are providing to the community and how much money the government would need to spend to replace their volunteer work with paid public servants. I recommend this committee consider mechanisms to provide tax credits for accredited volunteer labour.
As currently written, Bill C-224 does nothing to answer a legitimate concern Mr. Bryden raised in his report. Political activity is not adequately defined. In the booklet each registered charity receives from Revenue Canada, political activity refers to efforts designed to influence and mobilize public opinion on an issue for the purpose of pressuring elected officials.
In the very next paragraph there are a number of exceptions to this broad proscription. The department takes the view that direct efforts to bring a charity's position on an issue related to the charitable purposes for which it is registered fall within the general ambit of charitable activities.
A clear definition is needed, one that doesn't leave open to interpretation or misinterpretation legitimate activities of organizations properly registered as charities. I would propose instead that the activities of a charitable organization must be clearly consistent with the goals and objectives for which the government granted it charitable status.
The most unfortunate aspect of this bill is that it is rooted in a failure to understand the appropriate role of NGOs in our current political structure. A balance must be struck between the policy role of business organizations and public interest groups.
It is curious that there are no restrictions on the ability of a business like a tobacco company to write off expenses to influence public policy, but there are severe restrictions on the ability of public organizations to receive tax deductible donations to do the same.
Even if you believe that there are two legitimate points of view about tobacco, it is both unfair and dangerous to allow the representatives of the tobacco industry to use all of their massive resources to influence the public and elected officials while making it increasingly difficult for groups such as ours to use our minuscule resources to provide politicians and the public with an alternate point of view.
The people of Canada will not be well served if the only information the government gets is from the Canadian Tobacco Manufacturers' Council.
Before I close, I would like to return to the problematic wording of clause 3 of the bill. On line 16, the bill seeks to define organizations that receive, directly or indirectly, any payment from the public funds of Canada. This raises several questions.
First, why should the law be restricted to not-for-profit or charitable organizations? Should not the principle of accountability apply equally to industry and charitable groups? I would propose amending the bill by deleting at page 1, clause 3, lines 10 through 15.
Second, I would like to underscore the issue of fairness already raised previously. Why should the not-for-profit sector be treated differently from the for-profit sector, which can receive public assistance and can bid and receive public contracts.
Another question involves the definition of indirect public funds, which need to be much more clearly defined than they are currently.
In conclusion, I would like to emphasize that PSC has nothing to fear from public disclosure. In fact, it will serve to protect us from the type of unwarranted attack that we suffered in late 1994. We feel very strongly that whatever mechanisms are put in place should not overly increase the administrative burden faced by charitable organizations such as ours that have only one employee to manage all of our affairs. These controls should not tip the scales even more in favour of the rich and powerful than they already are.
Rules regarding public disclosure for those receiving public funds must apply equally strongly to those working to maximize their profit as they do for those working in the public interest.
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Thank you.
The Chairman: Thank you, Dr. Taylor.
We'll move to the presentation from the Pearson-Shoyama Institute, Andrew Cardozo, president.
Mr. Andrew Cardozo (President, Pearson-Shoyama Institute): Let me just introduce the Pearson-Shoyama Institute by telling you that it is a think tank that addresses a number of public policy issues. We are trying to give some meaning to the idea of inclusiveness such that Canadians would have a say in public policy and the public policy debates based on their expertise or interest rather than who they are or which part of the country they come from.
We neither receive core funding from government nor do we seek it. We don't receive core funding from business or any other interest either.
One of the issues that we have been pursuing in recent months is trying to develop or advance the role of interest groups in society in the present political and economic reality.
There has been a lot of discussion about the value of public interest groups. What we want to do is look at the current political and economic climate and see how we can come to a more positive and cooperative arrangement in society.
I have four comments to make about the bill. First, I think it's important that Parliament be doing what it can to advance voluntarism in Canada. As all levels of government are shrinking their mandates and shrinking their responsibilities, governments are asking the voluntary sector to take on more roles. As you do that, I think it's important that you not alienate or undermine the voluntary sector, but you do whatever you can to advance the voluntary sector and strengthen it.
The voluntary sector has always been one of the pillars of our society and I think now more than ever it is going to have to pick up more of a role. Parliament, I think, should be playing a role to advance that.
I'd say quite simply that it would be really useful to have a preamble to this bill that recognizes the benefits of the voluntary sector and public interest groups and recognizes the social, economic and cultural benefits that these groups bring. It is not an empty statement. It would be a statement that would say something about our society, and at this particular time it would be useful for Parliament to make that type of strong statement encouraging Canadians to become involved in the voluntary sector.
The second point I'd make is - and I will disagree with the Canadian Society of Association Executives on this, and I apologize. I would suggest that you expand and be more clear about what you mean when you talk about groups that receive funds directly and indirectly.
As the second witness has said, I would prefer that the bill refer to all those who receive money through tax deductibility means; that is indirect funding, whether it's a business group or a political party. When anybody who donates money to an organization is able to claim that as an expense or claim a tax deductibility, that is an indirect subsidy from the taxpayer to that group.
I think it would be useful and important for this bill not to be seen to be on a witch-hunt against certain groups. It would be better for the bill to be open and apply to all groups evenly, including the association, which, as I understand it, may not come under the purview of this bill.
I would like to see all the salaries of all business groups, all political parties, all public interest groups and all charities quite open on the same basis. We either do it all or we don't do it. What I wouldn't want to see are some groups targeted and your turning a blind eye to the others.
The third point is that the bill should not act as a deterrent to volunteer board members. When you're talking about the benefits to board members, I think it should really be clear that if you're talking about expenses that people incur, such as parking, meals for board meetings, and so forth, that those kinds of expenses they claim, which are small dollars and cents, are not part of this bill, because I think you want to make sure that as volunteer groups are going out and recruiting more volunteers and board members, that these people not be in any way overburdened or that the burden on them be increased by this bill.
I understand there has been some discussion about the costs of this bill and the fines. I encourage that you look at ways to reduce the cost of implementing the bill. I think the fines could be more realistic and in line with the kind of information that we're looking for.
I notice, Mr. Chairman, I'm still under my five minutes, so let me say in thirty seconds - I have to get more time in answers, I want to remind you.
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In closing I want to suggest that this is a time when I think interest groups, institutes, Parliament, etc., ought to be looking for ways of expanding voluntarism in our society, finding ways that public interest groups can work cooperatively with government and Parliament. The kind of tension we've seen in recent months isn't particularly helpful. We need to look for more cooperative ways. Thank you.
The Chairman: Thank you, Mr. Cardozo.
Now we're going to hear from the National Anti-Poverty Organization, represented by Lynne Toupin and François Duhaime.
I want to remind my colleagues that when we get to question period you're going to be in a position to be able to question any one of the four groups. I hope we don't forget about any particular group, especially the first group that we haven't heard from for, say, half an hour. I want to remind you, as you think about your questions, to include all the groups in your consideration.
Ms Toupin.
[Translation]
Ms Lynne Toupin (Executive Director, National Anti-Poverty Organizations): I would like to thank the Committee for this opportunity to comment on Bill C-224 this morning.
We do not intend to take much time. We hope to be able to make our presentation within the five minutes alloted. We would still however like to make a few comments on the purpose of the Bill, its scope and its implementation as well as its likely impact.
[English]
For those of you who are not aware of our organization, we're a national non-profit, non-partisan organization that has been around since 1971 and that represents the interests and concerns of low-income Canadians.
By virtue of our statutes, our board is two-thirds made up of persons living in poverty or having experienced poverty directly. At the present time, we estimate that over 90% of the people on the board actually live well below the poverty line.
We receive a direct grant from the federal government. In addition to that we solicit contributions from individual donors. The mix is about 60:40. We continue to enhance our donor base to try to achieve greater economic independence.
Let me begin by saying that the National Anti-Poverty Organization doesn't oppose the concept of disclosure of the salaries of senior officers and their directors. We believe in the values of transparency and accountability for all organizations, be they of a non-profit or of a profitable nature, and we'd be happy to adhere to requirements for such.
That being said, we do have concerns that this bill is directed only at the charitable and non-profit organizations who receive directly or indirectly any payment from the public funds of Canada. We would like to point out for the record, as we have on numerous other occasions, that Canadian taxpayers, through the rules of tax deductibility in fact subsidize the advocacy and lobbying activities of many for-profit organizations as well.
Businesses and corporations can deduct the expenses of their entire government relations sectors. They can deduct the fees they pay to lobby organizations for them on their behalf. They also can deduct the fees of membership to lobby organizations such as the BCNI.
In fact, when the federal government began to fund the activities of the non-profit organization many years back, it was done in an attempt to level the playing field, recognizing it was providing tax breaks for the advocacy and lobbying efforts of the private sector - and this was in the environment sector - while ignoring the voices of non-profit groups who could not take advantage of generous tax deductions.
We feel the Canadian taxpayer is being misled by thinking their dollars go only to support non-profit organizations, when in fact, by virtue of foregone revenues, their dollars also go to support the lobbying efforts of large corporations and businesses.
We would be happy to see this bill extended to include disclosure of the salaries of the directors of government relations sectors of all for-profit organizations. We suspect that the salaries of non-profit staff would actually pale in comparison.
We would also recommend to the committee members that they consider asking organizations to state salaries within salary ranges, rather than asking for exact salary figures. This would be in keeping with salary disclosure for public sector employees, while maintaining a measure of confidentiality.
We applaud the efforts of the committee to listen to the views of the privacy commissioner on this issue as well.
I would suggest that this approach be taken due to personal experience. When the issue of accountability of organizations came up last fall, I was asked by a Canadian Press reporter about my annual salary. I gave her the information and it was printed in a news article that ran in many newspapers across Canada. In retrospect, I feel it was a foolish thing to do, because if I am to negotiate a salary with a prospective new employer, clearly I would be at a disadvantage because he or she would have ready access to my existing salary. I think in a world of competition it is important to protect that kind of privacy in order to make sure people have fair and equal access to opportunities.
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The other area we wish to touch on is the mechanics of implementing such a process of disclosure. In an era of dwindling resources it strikes us as odd that the federal government would support an initiative that may add significantly to the workload of government officials and be more costly to actually implement.
Instead, we would suggest looking at existing structures such as the T3010 form and that they be amended to include a clear question on salary ranges. Furthermore, we would suggest that organizations such as the Canadian Centre for Philanthropy and others be approached to provide input about modifying this form. The information on this form could not only be of use to the government in its quest for greater accountability, but it is also useful information for the non-profit sector itself.
In the final analysis, while we are supportive of disclosure, we do wonder about the purpose of the bill. If it is to ensure greater accountability on the part of non-profit and charitable organizations, one must recognize that salary disclosure, in and of itself, will not necessarily make the organization more accountable. In theory, there are numerous other ways for a non-profit organization to defraud the public other than paying extravagant salaries.
Federal audits of charitable organizations now take place on a regular basis and are in place to ensure that accountability. NAPO has been subject to many of them over the course of its existence.I suspect we are scrutinized more closely than most government departments and programs. Nevertheless we have no problem with this practice and in fact welcome the opportunity, as it allows us to enhance and improve our overall systems of accounting. We are accountable to the taxpayers and to our donors. When an audit is conducted, our donors are also secure in the knowledge that their dollars are being well spent.
Given the very narrow focus of this bill and its target on salaries alone, we are fearful that if the non-profit and charitable sectors are the only ones subject to these rules, it may lead to downward pressure on senior staff salaries and therefore make it more difficult for organizations to attract the best and the brightest. This sector is currently under unprecedented attack at a time when governments turn more and more often to this very sector to pick up on services they no longer provide.
While there will always be a minority of groups and individuals who may abuse privileges and rules in any area and in any sector, let us continue to bear in mind that the majority of organizations do play by the rules and are very conscious of the need to be accountable, both to the public and to their donors. Thank you.
The Chairman: Thank you, Ms Toupin. By the way, when your salary became public, did you get any abuse or any critical calls?
Ms Toupin: Considering my salary? No, I didn't get any abuse.
The Chairman: You didn't? I suspect you're not paid very much then.
Go ahead, Mr. Marchand.
[Translation]
Mr. Marchand (Québec-Est): Having listened to all the witnesses today, I have several questions. I don't know if I can get the answers because the purpose and the intent of the bill escape me. This uncertainty or concern seems to be shared by the organizations we heard today.
I don't know if the purpose of the bill is simply to provide us with more information or to identify organizations or individuals who may abuse public funds. Is this really a witch hunt? If so, I find it unfortunate because everybody seems to think that there is no need for this bill to focus only on non profit or charitable organizations, to the exclusion of any other type of organization. It wasMr. Cardozo, I believe, who made a point of this.
I wonder if all the organizations represented here today would support a bill that would extend the same disclosure criteria to all types of organizations.
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I seem to always come back to that question because it is the purpose and the spirit of this bill.
The organizations have emphasized another point. It seems that you are not opposed to transparency, to accountability nor to the fact that you must address the public's concerns. You object to the fact that you are targeted and you think that it tarnishes the associations' image. In the end, it does tarnish the image of non-profit associations, and I share that concern.
So what choices do we have? Only the author of the Bill can answer that question. But am I mistaken in saying that your fundamental concern is that this bill targets you and gives you the impression that you're hiding something, that it specifically targets your organizations and that it excludes others? That would explain your opposition, if I've understood correctly.
I don't know who could answer that question, since you would all agree with the fact that this bill requires the same principles for disclosure from all organizations, whether they be profit oriented, non profit or charitable organization, etc -
Perhaps Mr. Cordozo could respond.
[English]
Mr. Cardozo: I don't necessarily oppose the bill. I think my preference for going about this would be to have a much more comprehensive bill that I would call something like the voluntary sector promotion act, which would deal with a lot of aspects of voluntarism in Canada and would look at means that would advance the voluntary sector, look at expanding charitable tax status. If you want to take money away from an organization like NAPO, why not give them charitable status? That's the kind of thing we ought to be talking about. I'm not suggesting what exactly should go into that. I think it would be really useful to have a voluntary sector promotion act that would look at everything such as how these groups are funded, how they operate. It should at things like transparency and accountability, both to funders, to Revenue Canada, as well as to the membership. It's important that organizations have some kind of accountability structure with their own membership. Those are the kinds of things I think should be included in a bill such as this.
The Chairman: Would you like to have answers from the others, Mr. Marchand?
Mr. Shand.
Mr. Shand: I guess one caution I would raise to the point of whether these disclosure provisions should apply to everyone who receives, directly or indirectly, some payment or benefit is we could potentially - I don't think it's an exaggeration to suggest that the majority of Canadians are now going to have their salaries in the public realm. If you start thinking about pensioners, students, a whole range of groups from agriculture to industry that receive benefit, I'm sure in our lifetime each one of us will at one point or another receive payment that has in part been supported by the taxpayers of this country. So that's a very dramatic step in terms of legislation.
The Chairman: I think Mr. Duhaime from the National Anti-Poverty Organization would like to say something.
[translation]
Mr. François Duhaime (Assistant Director, National Anti-Poverty Organization): Briefly, to respond to Mr. Marchand's comments, it is quite fair to say, in our own case, there is no doubt that a distinction is made between for profit and non profit organizations.
And, further to a comment that was just made, as to whether there is a verification of the people who receive, on a personal basis, payments from the government, in that case, everyone should have to disclose his or her salary. But nevertheless, as you pointed out - I'm referring, for example, to the document from the Minsiter of Finance where you see that roughly 10 billion dollars in tax deductions which are granted annually to businesses. You can see it all in this document. What kind of accountability is this? Do we have any details regarding this type of corporation? Not at all!
So I have the impression, without even going into personnal details, but simply remaining at the organizations' level, that it would be more efficient for the government to find out what happen to these 10 billion dollars instead of targeting organizations such as ours which receive $250,000 per year.
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Mr. Marchand: You are perfectly right. After all, why would one demand to see your income through this bill and not require the same from any manager of any Canadian company? After all you are ordinary people, why target non profit organizations, when we know full well, as you just mentionned, that deductions of 10 billion dollars, a huge amount, are allowed in the case of companies.
[English]
Mr. Taylor: I think the point is true that the same rules should apply to everyone. The bill should say that every director of every organization - That would get around the problem of individuals having their salaries disclosed who are not part of organizations. But I see very little justification only to apply this particular bill to charitable organizations.
The Imasco corporation, I'm sure, receives direct or indirect funding from a number of sources. If the intention is that my recompense as a director be exposed, then the entire board of directors of Imasco should also have their recompense exposed. That's only fair. I'm sure what would come out of it is recognition on the part of many people about what a fool I am compared to - I believe this bill is a witch-hunt, and I would like to quote the author of this bill, who makes me believe that to be so.
- This has created a government-dependent industry where misrepresentation is a common
business practice, semantics and twisted definitions enable the spirit of law to be ignored,
individuals award themselves huge salaries, hire professional lobbyists to get more money and
attack critics with name-calling and noisy demonstrations.
Mr. Epp (Elk Island): First of all, I would like to begin by affirming you in your work. I think you do a really good thing in our society.
I have been involved in charitable organizations all of my life, both as a worker and as a donor.I believe in it. It's a very important part of the fabric of our society. In fact, I have sometimes thought that the money that is coerced out of need by government is not nearly as efficiently used as the money that I can choose to give to the organization that I know is helping people who need help. SoI would begin with that statement, Mr. Chairman, because I'm with them.
Let's come to the subject at hand. First of all, I want to give an alternate point of view, and that is that just about all of you have said if we need to disclose our salaries, then those organizations that operate for profit should also disclose. However, there is one significant difference, and with all due respect I think you have missed it. If an organization earns its own money and chooses to give a large salary to an executive officer, they have a tax deduction for that salary expense, but that same amount of money is now taxable in the hands of the earner by way of a personal income tax liability, whereas we're dealing here specifically with people who benefit directly from government money.
Strictly speaking, when a charitable organization writes a receipt, say, for a $1,000 donation, in essence it's spending $290 of taxpayers' dollars because that's how much of a tax credit that individual would get. I really think that's quite different in the sense that the other money is going to be taxed anyway at one place or another.
So that's my view. You may differ with that and I'll be interested in hearing your comments on it.
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I am going to begin my questioning in a way I hadn't planned. I'm going to take off on a tangent now. It occurred to me that maybe we ought to cut government out of this loop altogether. Instead of having to account to the government for how you spend the money because you're giving charitable receipts, what would happen? I'm just brainstorming here. I don't want anybody here to think this is now Reform Party policy. What would happen if we stopped giving charitable donation receipts and if all organizations just simply got their money from whomever they could persuade to support them?
Take, for example, an anti-poverty organization. I don't think it should have any trouble at all appealing to a significant proportion of our much-touted compassionate society - and I believe that's accurate - in order to get money to support its organization and to help people in need. What would happen if we just cut the charitable donations out completely, refused government funding, and went on our own directly with the people? I think it would save a whole bunch of money and would result in a great deal more money being available directly for the people who have the needs.
Let's have some comments.
Mr. Cardozo: I would answer a question with a question by asking whether you would give up that same status for political parties.
Mr. Epp: Yes, absolutely. I want it.
Mr. Cardozo: There's nervous laughter on the other side.
Mr. Epp: Political parties are the worst thing in the world because for every dollar you donate to a political party, it costs other taxpayers, who may support other political parties, $1.25. That's wrong.
Mr. Cardozo: But there's a reason for the status. It's because society and government have determined there's a value to this kind of work. This is a way of assisting, indirectly, various kinds of work, including the political process. I support those kinds of things carrying on.
Ms Cynthia Callard (Executive Director, Physicians for a Smoke-Free Canada): On the question of tax exempt expenditures, I think a large number of Canadians would be happy to have the whole issue reviewed. In fact, there has been pressure to have it reviewed, including from the Auditor General. I think within the ambit of a general review about what the government spends directly and indirectly through tax expenditures you would find a lot of support in the community.
Perhaps I could clarify the issue of salaries a little bit. I think we're all very comfortable with disclosure. You wondered about the distinction between those who have to go out and sort of make money. If you're the Canadian Manufacturers Association, people don't get a charitable tax receipt for belonging, but their membership fees are deducted as a business expense. Why would you do it for what you can deduct from your tax form under a charitable receipt and what you can deduct from your tax form under a business expense? Why would the rules be different for the National Anti-Poverty Organization than they would be for the Business Council on National Issues? Why would the rules be different for the United Church, shall I say, than for the Canadian Manufacturers' Association? One is a donation and one is a business expense.
Mr. Epp: I think we've reversed the roles here. The people are asking me the questions. I want to answer because I think there is in fact something significant here.
The person who belongs to the Canadian Manufacturers' Association does so by his or her own choice. When the Government of Canada spends money, having plucked it from my pocket through the coercion of taxation, I am supporting organizations that I do not support. I got just as angry about this, by the way, when I was an employee and forced into a union I couldn't get out of. My union took my union dues to support organizations and political parties that I did not support. I fought against that for all I was worth and actually finally got it changed. We are going to get some changes here too, but we want to do them correctly, so I want to hear from you.
Ms Callard: May I make a supplementary observation? I listened on Tuesday and you were so frank and open about what you had earned over time. I'm also comfortable about salary; it's not an issue. But I have noticed over time, when I speak frankly about my salary with friends and acquaintances socially, that within Canada there isn't one uniform value on disclosure of salaries. Some people consider it very private. Some people don't even tell their children what they earn. Some people are very open and frank. I think one of the problematic aspects of this bill is that people have different senses of privacy about finances. As we approach this issue we have to be sensitive to the fact that these play different roles in different cultures, different families, and different approaches. We're not monolithic on this within Canada.
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Mrs. Chamberlain (Guelph - Wellington): I'd like to make a couple of statements and then get to what I think is maybe the heart of the matter here.
If this bill were to proceed in any form, and I say ``any form'' because I think there will be some very real changes - I don't know if you followed the debate or presentation given by my colleague, Mr. Bryden, on Tuesday, but I think there have already been some very real concessions and changes in certain areas.
Mr. Cardozo talked about fines this morning, and there were certainly some back-tracking and re-evaluations of that particular position. But I think if we were to go ahead with anything in this manner, I would say, first of all, because I've worked a great deal of my career in non-profits, if there were an exposure or an accountability of the salaries, you would see that basically a lot of them are very low.
I think the statement Mr. Cardozo made is excellent, that no matter what we do we should take every opportunity to advance voluntarism. I think you're absolutely right. Whether it is a preamble or whatever, or if we don't go ahead with this, I think that's also a very important aspect of everything we do. Without volunteers we would be nowhere in Canada. I really feel strongly about that.
I see there is a great deal of antagonism from several of the presenters - very strong antagonism. I have to be honest and say I don't understand some of that. You do leave me at a loss, particularly Dr. Taylor, with your very strong feelings on this. I respect them, but I am at a bit of a loss.
There is the question of witch-hunt or accountability. I think the two issues of where we're at here and what it means have really been expressed by all colleagues around the table.
The question I would like to put to the presenters is, in your opinion, from what you know of non-profits - and maybe you can only speak about your agencies, I don't know - I would suspect some of this bill, and I don't know and I say this most respectfully to my colleagues, must be generated by a feeling that there may be abuses in salary levels that have occurred in agencies that are directly receiving funds from governments. I need to know, in your opinion, whether you know of those abuses. Are there any?
I would ask all presenters that question to begin with, and I would like them to be honest about it. Maybe you only know about your own agency, I don't know.
Mr. Taylor: First of all, I would like to respond to the statement that you don't understand my antagonism. My antagonism has come from the fact, as I mentioned, that I had devoted an incredible amount to not only my organization but to the cause of advancing public health in Canada.Mr. Bryden has initiated a campaign of disinformation designed, as far as I can tell, to destroy my organization.
I'll quote directly once again from what he has written. He says we can hardly be deemed to be anything but a political organization, as prescribed by Revenue Canada circulars. He also goes on to say that we are operating from someone's home or office. He goes on to say that the four directors of the charity are all doctors and no volunteers are listed. We are all volunteers, except for the executive director.
About three-quarters of what Mr. Bryden has said is 100% false. He could have found that out by calling our office. Look up our phone number and call the office. We would have given him all the information he wanted. But he chose to lie. He chose to write things that are patently false. That is the basis of my -
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Mrs. Chamberlain: I accept that from the point of view that that is your opinion at this time, and for the record I hear that you differ on information.
Mr. Bryden (Hamilton - Wentworth): Mr. Chairman, I do need a point of order here.
The Chairman: I can tell you, Mr. Bryden, I don't like where you're coming from. I really think you should absent yourself from this. Even though you're a member of the committee, I don't think you should take advantage of your position. Other witnesses, other sponsors of bills, will not have the same position that you can take advantage of. I really think, Mr. Bryden, that you should back off. I really think so.
Mr. Bryden: I just wanted to say, Mr. Chairman, that there is a connection -
The Chairman: No. Mr. Bryden, we may have to talk about this after, but I really think you should just absent yourself from this discussion. You are a sponsor of the bill. You have had an opportunity to present yourself. If you're going to use your position as a member of the committee,I think that's an abuse of your privileges. I know that maybe technically and legally you have that right. I think you should back off.
Mr. Bryden: Mr. Chairman, if I may say so, you should have at least waited until you heard what I was going to say.
The Chairman: Mr. Bryden, I thought we had agreed that if someone asked you a question, then we would give you the privilege of answering. As far as I know, no one has asked you a question.
Mr. Bellemare.
Mr. Bellemare: Mr. Chairman, I appreciate your point. However, I think Dr. Taylor has been using very abusive language. The Speaker of the House would reproach us if we used that terminology or suggested that MPs were liars, thieves, or whatever. This is unparliamentary language that we cannot use.
I appreciate what you just told MP Bryden, and you're quite correct. But the way Dr. Taylor is conducting himself is most inappropriate, unacceptable, and improper, and he's doing his cause a lot of harm.
The Chairman: You may want to change your language a little bit.
Mr. Taylor: Mr. Chairman, I'm happy to withdraw the word ``lie''. I'm sorry to have used it.
The Chairman: Thank you. Let's accept it.
Mr. Bryden: Mr. Chairman, I will take your advice and absent myself from the committee.
The Chairman: Thank you.
Mrs. Chamberlain: Now that we've heard the reasons behind the antagonism - and I take those again, as I say, as your opinion of some things that have happened - let's leave it at that.
Can we get back to the question and perhaps ask the groups whether there is any cause for belief that there is abuse in any salary levels that may be occurring through direct government funding that they know of?
Mr. Shand: I certainly don't know of any, but I think we need to understand more about how the system of funding works. There are accountabilities built into the system. There are, not only from the perspective of the department or the ministry that extends funds to the organization, criteria based on objectives that the Crown has set that the organization needs to satisfy. As we heard on Tuesday, there is an existing mechanism, through Revenue Canada, where the organizations are providing, at this time, virtually all of the information Mr. Bryden suggests we should now capture so, to some extent, it is duplicative.
Revenue Canada has the power to review those forms, to audit those forms, and where there has been information that is either not provided or after investigation it is determined that in some way the organization is no longer pursing charitable purposes - in other words, padding the pockets in self-interest - then their position is going to be totally revoked; the organization will cease to exist.
There are checks and balances in the system now. If there are abuses, and perhaps with human nature the potential is always there, I think the Government of Canada has acted very prudently to ensure that there are tests of due diligence all through the system.
Ms Callard: It's a hard question to answer because it's hard to say what's an abuse of a salary. Is $50,000 an abuse of salary? Is $75,000? Is $100,000? It's very hard to know where it is. I earn $35,000. I'm not uncomfortable talking about it. I worked for an NGO last year and I earned $80,000. Now, was that an abuse? Am I abused now?
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The issue of abuse, I would posit, comes more perhaps from the voluntary sector where people, because they think they're doing good works, underpay their employees. I don't think $35,000 is being underpaid, but I'm talking about people who are paying minimum wage for work that's really worth far more because they try to stretch their charity dollars as far as they can. They're trying to provide as much of a public service as they can.
You'll find in the charitable sector - I'm sure research groups would be glad to provide details of this - that people are paid way below public sector wages for performing a function that would otherwise be public sector work. That I would posit is an abuse.
The Chairman: I think we're out of time for this particular round.
Mrs. Chamberlain: I didn't hear from all the panel. Am I not able to?
The Chairman: Was there somebody else who wanted to answer your question? Go ahead.
Ms Toupin: This is a good question to ask because we're going to have to determine what would be considered abuse in terms of the salary scale.
I want to come back to the point I made previously. It is just one measure. If you really want accountability, you have to look at the whole range of activities of the organization and make sure that they are accountable in all ways. I would submit that we already have in place a system via Revenue Canada. Having experienced it, we find it's quite effective.
As an organization with charitable status, as one that's been particularly pointed out in the activities leading up to this bill, because we're specifically looking only at salaries, you have to ask the question why? What is the purpose of doing this? We already have mechanisms that, through minor adjustments, can actually give that information more clearly. It does beg the question.
We network with a number of organizations, 90% of which are non-profit. Of the ones I know,I would admit the abuse comes in terms of long hours of work for very little pay. There is no real abuse in their activities. I would say that it is very much in the minority, as it is in the for-profit sector, as it is in any other sector.
Mr. Cardozo: I would simply add that in my experience in knowing various organizations that I've worked with, informally or formally, I can probably think of two or three people who...I have heard what their salaries were and I may have thought they were overpaid, but overpaid only in comparison to the voluntary sector. They're probably getting market value or below market value than they would in the private sector or in government.
I think the abuse, if there is abuse, is much more the other way around, where people work for very low salaries. I've come across a number of situations where staff literally don't get paid for weeks or months at a time. I know people who have just carried on because they believe in the organization. They believe that one day the money will appear and they'll get paid for several months. So it's that type of thing.
I think if there was a cap.... Somebody suggested that one way of doing this is to have a floor. Below that level you would not have to report salaries. If you put that floor at, say, something like $45,000 for an executive director, I think that would account for about 80% or 90% of the organizations we're talking about. These are not excessive salaries, and for the most part the board is aware of the salary and okays it. It's not somebody who's pocketing a lot of money in an abusive way.
Mrs. Chamberlain: Thank you.
The Chairman: I suppose disclosure acts as a form of discipline or a check and a balance on operations. Under the current system, Mr. Shand, do we not have that already? For example, if government is giving, say, a direct grant to an organization, surely the government has a right to look at the books to determine what the administrative costs might be, what the salaries might be, included in those administrative costs. If the government chose to believe that the administrative costs or salaries were out of line, couldn't the government say, until you bring your costs in line, you're not going to get more grants? Is that not possible now?
Mr. Shand: Very much so. To reiterate what I indicated in my response to Mrs. Chamberlain, there really is due diligence at both ends of the equation. As consideration is being given to the grant or the program funding, the department responsible has criteria. There are usually committees and then approval by the minister based on whatever policy parameters have been in place in the first place for that program. Then, at the other end, as the activity is under way, you not only have the department monitoring the activity, but you have Revenue Canada looking at annual returns from non-profits as well as from registered charities. The information that they are receiving currently includes direct as well as any other kind of funding from any level of government, as well as salary information.
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The Chairman: Even if this proposed legislation were restricted to direct grants - forget about the indirect assistance - would there not have to be a threshold set?
I can imagine a situation where a government has provided a small grant to a large organization, an organization with a budget in the tens of millions of dollars, where the assistance from government forms an infinitesimal part of the budget, and yet under the spirit or the letter of the proposed legislation, after receiving that assistance the organization would have to disclose the salaries of senior officers, and so on. Given that scenario, wouldn't there have to be some kind of threshold set?
Mr. Taylor: My problem with that is that it would tend to set a double standard. It would mean that the larger the organization, the less accountable it has to be. For example, if you were to provide to one group a grant of $5,000, which might be 50% of its funding but less than 1% of a larger organization's funding, then presumably the larger organization would not have to report. I see that as problematic in that it sets a different standard for different groups being regarded in different ways. Presumably if a large organization would be frightened off by the need to report, then perhaps it would be discouraged from applying for the grant it didn't need anyway if it was such a small percentage of their its income.
The Chairman: Well, it might be a double standard, but perhaps the public should want to know more about an organization where government is a major supporter as opposed to another situation where the government is really not doing much. I think of a situation that was mentioned by Mr. Shand in his opening remarks. I think of the summer challenge program in my riding.
I have a school division called the St. James Assiniboia School Division. They had two or three summer students working for them last year through the program. I suspect the subsidy was worth maybe a total of $3,000. I don't know what the budget of the St. James Assiniboia School Division is, but I'll bet it's millions and millions and millions. Because the school got $3,000 in a budget of millions, should it then have to say that since it got that pittance - and I don't say that in a pejorative sense - from the federal government, now it has to open up its books and tell the world what its senior people are getting. Is that what we want to do, Dr. Taylor, just to remove what you call a double standard?
Mr. Taylor: I don't know how you'd solve that problem. I'd have to give it a lot more thought.
[Translation]
Mr. Marchand: I do not have any new questions to ask, but I would like to make a few comments.
First I would like to point out that your ruling, concerning Mr. Bryden, was quite appropriate.I agreed with you completely. He should not have intervened in this affair even if I am quite convinced that he was acting in good faith.
However, the bill, as drafted, has a somewhat negative focus. Even its very aim makes this obvious. Let us also remember that four organizations are clearly opposed to this bill. It is quite obvious that this piece of legislation should not be passed without amendments. However, one must remember, and I agree with my colleague from the Reform Party, that non profit groups and the volunteer sector are extremely important in Canada. In my own riding, various municipalities could not survive without the help they receive from these groups. A city is simply bear bones, the flesh is provided by volunteer groups. They therefore play an extremely important role.
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Rather than questionning good faith and integrity of non-profit organizations I think the Bill should be supporting them. I find the Bill to be rather negative in this day and age. Maybe there will be some way of giving it a more positive focus. It would be good if we could present a bill that supports you, improves your situation and lightens your responsibilities. If that were possible,I would agree with the Bill.
That is all I wanted to say. Thank you.
[English]
Mr. Cardozo: I'd just like to suggest that I think the objective of accountability is a good one. I'd rather see that come from the sector itself, if we had time to. I'm not saying bury the bill, but set it aside for a little while and bring a lot of these groups together. Our institute got a lot of the groups together to talk about the relations between interest groups and parliamentarians, because there is a growing tension. A lot of new parliamentarians have new ideas about where interest groups fit into the picture, and so forth so I think we need to look at that issue, for example.
I think it's also good to have a number of groups sit down and talk about accountability, the kind of accountability that they are prepared to have. I think you'll find that because they know their sectors very well, their means of accountability will be perhaps better than anything that a committee can come up with because they know the kinds of pressures and demands they have from their organizations and the kinds of justifications.
I would suggest you sit down with a number of groups and talk to them about the self-monitor thing or at least propose....
[Translation]
Ms Toupin: I would like to come back to what Mr. Marchand said. I think the Committee should look at the raison d'être and the intent of the bill. If it is really about accountability and accountability as regards salaries only, I don't think you need a bill to achieve this end. To all intents and purposes, all you have to do is make a change in the form. I hope that in the course of your proceedings, you will reexamine why you are considering this bill.
Second, I would like to support what Mr. Cardozo said, because I think the sector itself would really like to play a greater role and make its own decisions.
A conference held in Toronto involving many organizations showed it was a desire on the part of the groups to work together to establish one set of regulations without having the government doing it for us. Once again, it would be reasonable to begin discussions with the key groups. We can tell you who they are, if you like. This is a much simply approach and it would produce the same results. These organizations can take charge of their own destiny, and they are prepared to do so.
Ms Vinette: I would just like to point out that in our brief, our association, which represents over 1000 groups in Canada, offered to work with you and discuss these matters. If other organizations that are not really members of our association would like to participate in this initiative as well, we would be delighted to have them. We would like to offer this service and we stand with the other groups.
[English]
The Chairman: Madam Toupin, if you believe that you have some idea that could perhaps at least answer some of these concerns of Mr. Bryden, and do it within the forms that are now drawn up by Revenue Canada, I would certainly invite you to put something down on paper and share it with us.
[Translation]
Mr. Bellemare: The groups have made a very solid, professional presentation, with the exception of Physicians for a Smoke-Free Canada, which seems to be somewhat hypersensitive. They are not hypersensitive, however, when they launch their witch hunts and jump on smokers.
I am a non-smoker and since I am allergic to smoke, I really have a non-smoking bias. However, I can tell you that I've found the article you published absolutely shocking, terrible and agressive. It showed that as a voluntary organization, you tend to attack rather than promote.
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I would ask you to please try to stop attacking smokers, and to adopt a more positive approach. Try to provide places in buildings where people can smoke.
Here, on Parliament Hill, for example, there are some fanatics who decided that there would be no smoking anywhere. As a result, we see people going outside to smoke in the middle of winter. People can't even go to their own restaurant and smoke. There isn't even a chair for them in a corner. I think this is awful and really going too far.
As regards my colleague, Mr. Bryden, I asked him at the last meeting whether he was engaged in a witch hunt. Since then, I ran into Mr. Bryden on a street and we had a good discussion. We had another good debate in the elevator once. He knows where I'm coming from. I tell him constantly that I don't want him going off on witch hunts.
Having said that, I think the organizations
[English]
have presented a good case when they say, we have suggestions.
[Translation]
There is a person with a great deal of potential in my riding who worked for a charitable organization for a very small salary. When this individual wanted to go into the private sector, his or her past experience had a negative impact on the salary negotiations.
[English]
I would like the reaction of the committee to this question. How do we improve on reporting? No one seems to worry about transparency or accountability.
I'm not sure if Revenue Canada is getting voluntarily all the information they should be getting. Are they really explaining to people what they should be reporting? How much reporting do we need?
I think these groups that come in front of us are the front-line volunteers. If we don't have volunteers, if we kill the volunteer sector in any of our communities or across Canada, we're in trouble; the whole country is in trouble.
How do we prevent abuses? I think that's the case. We're so close to the United States - the Reform Party probably wants to live there, the way they talk. We hear of some abuses where people are self-serving. They start organizations so that they can make money out of them, create employment and a good future for themselves. How can we prevent that from coming to Canada? Do we have any of these activities in Canada?
Because we see so much American news, sometimes we mix what is American and what is Canadian. The Reform Party does that a lot. We mix American justice with Canadian justice. Some people like to see the OJs. I don't.
How do we prevent abuse? That should really be the crux of this proposed legislation,Mr. Chair.
The Chairman: We've already spent five minutes on the question. Do one or two of you want to answer this? Mr. Shand first.
Mr. Shand: If this legislation passes with very few or minor amendments, there will be absolutely nothing more that we will be required to provide in the majority of cases for these organizations compared to what currently exists.
I want to speak very briefly on the U.S. because we have a large counterpart organization in the United States. As you're probably aware, there are things called political action committees, or PACs, in the United States. These organizations fund extensively the careers and activities of people in public office. There has been a great deal of scrutiny about the propriety of these activities. It's illegal in Canada. You simply can't create such a body here in Canada.
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I think there are some real differences when we look at the U.S. system, how associations or non-profits are treated there versus what is expected and what is legally required here.
Mr. Taylor: I'd like to respond to a couple of things that were said.
My sense of frustration comes from having seen the many things that Mr. Bryden has produced and not having had any forum in which to have the capability to respond to what are clearly falsehoods in what's been published.
I'd like to say that the article that was published...you mentioned that we did it -
Mr. Bellemare: Would you use the word ``questionable'' as opposed to ``falsehood''?
The Chairman: I think it's acceptable.
Mr. Bellemare: Not to me. If you're answering me, use the word ``questionable''. If you're not answering me, I'm going to leave here. I don't want anyone to be accused of anything.
Mr. Taylor: I'll respond to the chair.
The Chairman: Something false means it's not correct. It's not consistent with the truth. That's not lying.
Mr. Bellemare: I'd like him to prove that.
The Chairman: Well, he believes that it doesn't match up with the facts. I don't think that language is too strong, Mr. Bellemare.
Mr. Bellemare: The Auditor General uses the word ``questionable'' even when it is false.
The Chairman: Let's leave it to a matter of opinion. You think it should be called questionable. He sees it a little different.
Mrs. Chamberlain: Mr. Chairman, I have a point of order. The issue here is not this particular agency's complaint or dispute with Mr. Bryden per se. That really isn't what we're examining here today, I don't think. I think what we're examining is the intent of Bill C-224. If we kept our comments more focused to that, it would be much more helpful. We're trying to see the flaws in that, not in an ongoing dispute that has developed obviously between a colleague and a particular agency.
The Chairman: I get your point. We're not necessarily agreeing with Dr. Taylor, but I think what he's saying, and he's using rather strong language, is that Mr. Bryden's work is rather sloppy and perhaps it could have been done better. I think that is what he's really saying.
Mrs. Chamberlain: Mr. Chairman, I still don't see how that's benefiting Bill C-224. That's my point of view and I'll put that on the record. I wish we could stay more to the bill, because I think that's what we're here to do: examine the flaws in the bill.
The Chairman: But if the bill is founded on flawed information, Mrs. Chamberlain, if someone believes that, should somebody have the right to point that out?
Mrs. Chamberlain: I don't think that has to do with the particular bill. I think the flaws in the bill, if they're there, speak for themselves. Many of the groups here have articulated quite clearly that there are some flawed areas in this bill.
The Chairman: Let's see if we can keep personality out of it as much as possible, Dr. Taylor.
Mr. Taylor: There is one further point I'd like to correct. Physicians for a Smoke-Free Canada did not publish an article that was seen in The Ottawa Citizen. As an organization we had nothing whatsoever to do with that. Many of our members, as individuals, did sign on to that ad, but as an organization we had nothing whatsoever to do with it.
[Translation]
Mr. Duhaime: Mr. Bellemare, may I answer your question because I don't want to get caught up in this debate. Frustration does exist but I think that we must answer your direct question.
You asked how things were done. I can simply tell you, Mr. Bellemare, that in an organization such as ours, we start early in the year, that is when the Department of Human Resource development asks for an annual report and a financial statement regarding the budget of the previous year as well as information on the budget we are requesting for the coming year.
Thereafter, a firm of independent auditors comes to check our books. There is of course the form from Revenue Canada that we must fill out every year because we are a charitable organization, there is also our annual meeting that will be held this weekend in Regina during which we must account for the year's expenditures to the public and to our members and then of course there are questions from the public all year long.
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I would therefore humbly submit that we are already rather well audited during the year.
As far as our salaries are concerned, they are already available to the authorities such as the department that grants us a subsidy. And there is as well our annual meeting.
I think one of the most serious problems with Bill C-224 is that it has probably limited your vision to people's salaries. I understand this, and that is why we all appeared before you. We are here rather to promote transparency and accountability for the money we receive.
As long as the committee limits itself to the matter of salaries, it has little chance of adding to a process that is already incumbered.
In closing, as far as salaries are concerned, what constitutes an abuse? For example, whenMr. Tellier, left his position as clerk of the Privy Council to go to a Crown corporation where his salary went from $160 000 to $700 000 a year, could we speak of abuse? Perhaps yes, perhaps no.
As a citizen, I would have comments on this, but today is not the time and place. All I wanted to say is that you have limited yourself to aspects that will not allow us to go much further than what is already there.
[English]
Mr. Cardozo: Let me put something concrete on the table and talk about some other individual organizations with which I've been associated. I've either worked for or been a voluntary board member of Big Brothers of Ottawa, the YM-YWCA of Ottawa-Carleton, the Ottawa-Carleton Immigrant Services Organization, and the Canadian Ethnocultural Council. I've worked for the first; I've been a volunteer board member for the others.
For each one of those there is an annual report published every year, which includes an audited statement, and in that is one figure that covers salaries. Sometimes it's broken down into salaries, contracts, and so forth.
Some have suggested there is no accountability for these organizations. Everything I've been involved with in terms of these organizations is that there is a lot of accountability out there. If you're looking to break down one of those figures, that's fine, but I think the suggestion that there's a lot of secrecy around these organizations is quite inaccurate.
Big Brothers, for example, publishes its annual report on the back of a poster. It has a poster every year for publicity purposes. Thousands of these go out all over the place. They're not just available on request; you get them thrust in your hand.
The Chairman: Thank you. I think we're going to go to Mr. Bélair and then Mr. Epp.
I'd just like to say one thing. I'm really glad to hear that Mr. Bellemare doesn't smoke. You should know, friends, that Mr. Bellemare has the reputation of giving all kinds of homilies, and after hearing some of those homilies we're left wondering what he might have been smoking.
Mr. Epp: The chairman is following the lead of the Solicitor General in the House yesterday.
I would just like to have a little debate with Dr. Taylor, if I could. First of all, if I remember correctly from what you said in your report and your statement, you have left your day of work probably without pay. You get paid based on how much you do, right? So you have come here from Toronto at your own expense.
Mr. Taylor: That's right.
Mr. Epp: What was your primary motivation for coming here?
Mr. Taylor: My primary motivation is to make sure that any type of legislation that appears treats everyone fairly and does not bring forward an unnecessary administrative burden on small groups such as ours.
Mr. Epp: You're not opposed to openness, accountability and...I know what the answer is to that, but I just want to hear you say it.
Mr. Taylor: Not at all.
Mr. Epp: You're not at all opposed to it.
Your organization, I believe, had a budget last year of some $70,000.
Mr. Taylor: That's approximately correct, for the last audited year.
Mr. Epp: When was the last audited year?
Ms Callard: It was the 1993 fiscal year; 1994 hasn't been audited yet.
Mr. Epp: But your budget is about the same?
Ms Callard: It was a little bit more last year.
Mr. Epp: You have one employee and that's it. So you obviously should have no objection to doing this, because if we had this openness and accountability it would prevent people like, you presume, Mr. Bryden, from misinterpreting the facts.
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Mr. Taylor: Absolutely.
Mr. Epp: So you're in favour of that.
Mr. Taylor: We're in favour of accountability as a concept, provided it applies to everyone equally and provided the administrative framework that is put in place is not onerous.
Mr. Epp: I have a concern now, and perhaps this would be better directed to Mr. Shand.
We were told by departmental officials that some 6.4% of salaries disclosed for groups that were charitable organizations paid salaries in excess of $75,000 per year. There are some people who donate to these charities and certainly some taxpayers who, when they think an MP's salary at $64,400 is too high, would undoubtedly think a person working as a director of a charity at $75,000 or $100,000...I forget what the percentage was. I think around 2% of charities and other organizations pay their top executive officers over $100,000 so they would probably be the ones we are trying to target.
What's your comment on that? Do you not agree that is in fact objectionable?
Mr. Shand: Not at all. I don't think it's objectionable. I think you have to be fair and examine these on a case-by-case basis. We have to recognize that there are some charities, some non-profit organizations, in this country that have extraordinary responsibilities.
I look at an organization such as the Canadian Red Cross Society, which, among all of the things we know well about it, is responsible for the nation's blood supply. To be CEO of an organization that has hundreds upon hundreds of employees, not to mention thousands of volunteers coast to coast, is an extremely important responsibility, with interaction at probably every level of government and every department.
If you were to go out into the private sector and say to a CEO of a company that given the complexity of this operation we would like you to come in and provide leadership.... If I look at The Globe and Mail, which publishes salaries of CEOs of publicly traded companies, I would guess that probably on average they're making about half a million dollars a year. So to bring outstanding people, whether from the public service or the private sector, into the non-profit sector to provide the kind of leadership an organization such as this requires, $100,000 is probably not an unreasonable salary.
Mr. Epp: How do you suppose publishing these salaries would be detrimental? You've just given a very lucid explanation and justification - and by the way, I want to apply for this job, and you would probably pay my hotel bill besides.
The Chairman: Can I just jump in here and make a point? Mr. Epp, your question was a good question. His answer was a good answer. The trouble is sometimes with disclosure and a lot of speculation on the part of people, there could be somebody in Canada who has had exactly the same question as yours and has never had the opportunity to put it to Mr. Shand. Out of this kind of information you can sometimes get a lot of speculation and rumours.
Mr. Epp: You get speculation and rumours, but you also get the opportunity to explain.
The Chairman: You do. Because you're a member of Parliament you have the opportunity. There are all kinds of Canadians who either wouldn't read a document or just would not be in a position to get the answer you just got, so they go around thinking these organizations are just terrible.
Mr. Epp: What are the financial implications of one of these large organizations with an executive officer or two who make over $100,000 a year, or are there implications?
Mr. Shand: Financial implications?
Mr. Epp: No. My question is, if you have an organization that has one or two highly paid people - I'm saying over $100,000 a year - what are the financial or other implications to that being known?
Mr. Shand: With due respect, I'd be inclined to suggest you ask them, because given the question you've just asked, if an individual is an executive officer and an employee of a charitable organization, whether he or she is making $10,000 or $200,000 a year, that information is currently in the public realm. You can call Revenue Canada and that information will be supplied, and then you can take it up with the organization.
Mr. Epp: It's not covered by confidentiality rules?
Mr. Shand: Not at all; not in the case of a registered charity.
Mr. Epp: Okay. I just have a thought here, Mr. Chairman. Maybe a better way of solving this is to pass a very simple law that says anybody who writes to an organization asking about the salaries of their top three paid people they must disclose it. That would then give them the opportunity to say ``Here's the salary''. Then the rest of the page says ``and here's the justification'', which would solve the problem. Maybe that would be a way of doing it.
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I do believe it should be known. I'm finished, Mr. Chairman.
[Translation]
Mr. Bélair (Cochrane - Superior): I have been following the deliberations on this bill, with great interest since last Tuesday. At that time, I expressidly asked the Chair to obtain from the Privacy Commissionner a legal opinion on the distinction to be made between the salaries of executives and board members of non-profit organizations and those of their employees.
To make our task easier when we come to the clause by clause examination of the bill, I will however be getting your opinion. Could you than supply the Privacy Commissionner with your opinion as to where we should draw the line between the salary of the CEO and that of an employee.
Mr. Shand, if you will.
[English]
Mr. Shand: I think to some degree we covered this in our submission. I'll just reiterate. What troubles me about the legislation is it states one thing. The focus of the House of Commons, in approving it in principle, has been based on what is written, and what we heard as the intent is entirely different.
What the bill states - and we've been using the terminology - is ``directors'' and ``senior officers''. I say with respect that I think most of the committee members, including Mr. Bryden, have been using that terminology in a legal context normally seen in the private sector.
If I am the CEO of a bank, then, yes, I am exercising the right to set policy in concert with the board. However, for the vast majority of individuals who are employees in a non-profit organization or charity, they are neither a director nor an officer.
That is why some of the lines in the fourteen returns Mr. Bryden examined in his research saw that information omitted. Very simply it asks for employees who are directors and officers to submit.
Mr. Bélair: So what do you say to the commissioner, then?
Mr. Shand: I would say to the commissioner that I think there is an important issue related to the privacy of employees, as distinct from those who have the authority in law to set the policy of an organization.
As I indicated in our opening remarks, I think it's legally unprecedented. I don't know where in Canada we have examples where an employee in that position, by virtue of their status of employment, without any legal authority to set the policies of the corporation or organization, is obliged in the public realm to disclose the specifics of their salary.
Certainly in the public sector we know there are broad ranges. To the best of my knowledge, this would be a first-time requirement of an employee.
To give you an indication, in the province of Quebec, the privacy legislation, which governs us as well, says that on a membership list, the name and address of the member is private information. We have to go to that member to say ``Do we have your permission just to release basic information such as your name and address?''
If that is deemed, in privacy legislation, at least in some jurisdictions, as being private, then to say an employee now must reveal the specifics of their compensation, I would suggest to the privacy commissioner, is probably not consistent with the approach we've seen to that point on privacy matters.
The others, I'm sure, have some other comments.
Mr. Bélair: Did anybody else want to add anything?
Mr. Cardozo: The other privacy item I'd suggest is to look at phasing in the bill, because if you impose it all of a sudden next month, there's a certain retroactivity to it inasmuch as somebody who was hired six months ago with the understanding that the salary was private is suddenly going to have to make it public.
I'd suggest you have it coming into effect a year or two down the road so that if people feel they don't want people to know how high or low their salary is, they have time to go look for another job, for example.
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Mr. Bélair: Well, I think this would be done once the bill, if it ever goes there, receives royal assent. As far as salaries are concerned, it does not cover what happened in the past, but what will happen in the future
Mr. Chairman, my second question has to do with an assessment mechanism. On a few occasions this morning witnesses have alluded to forms that need to be filled out.
On the other hand, if salaries are not divulged, is there a mechanism other than those forms that you would propose to the government in order to assess the value of its grant to a non-profit or charitable organization?
In other words, I could give you a concrete example from the private sector. On any balance sheet, 18% to 20%.... All the private enterprises do not exceed that 20% mark if they want to improve their margin of profit, of course.
In some cases we have seen - and Mr. Bryden, to his defence, has come up with examples - where $140,000 was given to employees out of a budget of $180,000, which of course doesn't make sense. A while ago the lady in black talked about abuse of salaries.
So as legislators how far can we go to assess an organization that does receive money from the government?
The Chairman: Who wants to answer that?
[Translation]
Ms Toupin: Mr. Bélair, I would hesitate to impose another structure on organizations, because as my colleague François Duhaime pointed out, there are several processes in place. Adding another one will be more of a burden on us, and it will not enable us to do the work for which we receive the grants. In short, the idea of adding another process concerns me.
I think that with what we have with the adjustments to the documents that enable us to report, you will get the information you want.
Having said that, I would, however, recommend that the information accompanying the forms be written in a more accessible language. I can tell you, with some certainty, that mistakes may be made, but they're not mistakes made in bad faith. It is very difficult to understand because the language is very difficult to understand. So that is another recommendation I would make. I believe that Mr. Bryden pointed out, in his report, that there were oversights on the part of certain groups.
Mr. Bélair: Intentional ones as well.
Ms Toupin: Yes, exactly. And in bad faith. I can assure you that that is not the case. In our case, it is how the information was interpreted.
Mr. Bélair: It may not be in your case, but there are cases where it is.
Ms Toupin: There are cases. However, the interpretation of the line relating to salaries was that we believe it concerned directors of the organization who receive no money. It is important to recognize that. These are our suggestions to you, but once again, I do not think that you need a bill, nor another process.
Mr. Bélair: That doesn't really answer my question. As legislators, how can we assess the grants that we give? That's what I'm asking you.
Ms Toupin: Each department has a system to assess them.
Mr. Bélair: Let's take the example I gave you earlier. When $140,000 out of a budget of $180,000 goes to salaries, it is obvious that there is something wrong.
Ms Toupin: If that were the case, the Department would be quite right to meet with other people in order to obtain more information.
Mr. Bélair: To what extent can we scrutinize the numbers?
Ms Toupin: In my opinion, it is already in place, especially since Revenue Canada is entitled to ask specific questions. They ask them of us when it comes time for Revenue Canada audit every two or three years.
[English]
The Chairman: We're out of time in this round. I understand that Mrs. Whelan wants to ask a question.
Ms Whelan (Essex - Windsor): For the purposes of the record I want to ask if all the organizations here today have volunteer boards of directors to which they're responsible. I would assume they set the budgets and salaries of the organizations.
That's all I want on the record.
Mr. Cardozo: I would like to just add one point that relates partly to what she said but more to what Mr. Bélair said. In terms of salaries, if an organization's salary budget is high, that doesn't mean it's necessarily bad.
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I gave you the example of Big Brothers, which has about 150 matches of volunteers out there. In terms of staff they have an executive director, a secretary, perhaps, and five social workers. It's really important that you have that type of professional support for the matches of the men and little boys involved in a big brother/little brother match.
In that situation there's really no other expense. They have a modest office. There's no travel, because it's a local organization. The bulk of the money goes to salaries, but I would argue that every dollar there is worth it. You want to make sure those matches are good and credible and all that sort of stuff.
So you have to look at individual cases as to whether or not that's too high.
The Chairman: Mr. Duhaime wants to say something; then we're going to Mr. Epp.
[Translation]
Mr. Duhaime: Mr. Bélair, I understand your concern when you say that, as a legislator, you must know where our money is going. I would say that in our case, no monies will be given to the National Anti-Poverty Organization unless Mr. Lloyd Axworthy, who is a minister and a member of Parliament, authorizes such a grant.
I can assure you that Mr. Axworthy's people study all relevant details with us to know how the money is spent and this review is done every year.
Mr. Bélair: But I'm talking about auditing.
Mr. Duhaime: Yes, that's correct. Every year, before approving another grant, a review is done of the grant given the previous year. We must account with Mr. Axworthy's office for all expenditures during a given year. Once the Minister is satisfied, as a member of the Cabinet, that the previous year and current year's expenditures are justified, he authorizes the drawing of a cheque. Therefore Parliament can be reassured, through the Minister, that the money was well spent.
[English]
The Chairman: We're going to have to start shutting this down soon, but Mr. Epp wants to ask something.
Mr. Epp: I have a question for each organization on just facts: where do you get your money?
Mr. Cardozo: If you take our total budget, we are driven by two sources. One is a lot of volunteers and the other is the contract work we do for the public or the private sector, which involves everything from organizing conferences, consultations, research and providing training.
Mr. Epp: Okay. So the organization that hires you would pay.
Mr. Cardozo: Yes. It's on contract.
Mr. Epp: What's your main function? Are you a lobby group?
Mr. Cardozo: No, we're not. We're a think tank. We're an organization where people get together, talk about issues and individuals -
Mr. Epp: Once you've done all your thinking, what do you do with the results?
Mr. Cardozo: On this issue I'm thinking about, a lot of others are coming here and talking to you. Other people involved in different issues will put those forward.
For example, we just did a consultation for Health Canada on an aspect of smoking. That included a report that was presented to Health Canada.
Mr. Epp: You receive no direct government funding.
Mr. Cardozo: Unless it is for a specific contract.
Mr. Epp: Okay.
Ms Toupin -
The Chairman: I was just thinking, Mr. Epp, if you just thought of the Fraser Institute, your answer would be quite evident.
Mr. Epp: Low dig, Mr. Chairman.
Some hon. members: Oh, oh!
Ms Toupin: But a good one.
As I indicated at the beginning of the presentation, we have a direct federal government grant, which we've had for many years. It's not $250,000, as my colleague said; it's now $212,000. We forgot about the 15% cut.
In addition to that we receive individual donations through a direct fundraising drive. We do have charitable status, and we have to account for all of the money we receive from those people, as well.
From time to time we will engage in projects, at times with the private sector, at times with other organizations, and at times with the government.
It varies from year to year.
Mr. Bélair: What is your total budget?
Ms Toupin: Our total budget for this year is about $425,000.
The Chairman: Dr. Taylor or Ms Callard.
Mr. Taylor: I'd say we receive about three-quarters of our money from individual memberships and some, a small amount, from the corporate sector. Up to a quarter of our funds come from the corporate sector, depending -
Mr. Epp: Do you get donations from ordinary people, ``ordinary'' defined as non-physicians?
Mr. Taylor: Doctors aren't ordinary?
Last year for the first time we instituted the possibility that non-physicians could join us in a certain category. That has not been extensively advertised. So we don't receive too much from that area.
Mr. Epp: Your charitable status is primarily there so that you can give tax receipts to doctors who donate to the organization. Would that be accurate?
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Mr. Taylor: Our charitable...?
Mr. Epp: If you have charitable status, and I think I read that you do -
Mr. Taylor: Yes, we do.
Mr. Epp: Usually, the purpose for charitable status is to avoid paying taxes and to able to give receipts for charitable donations. Am I wrong there?
Mr. Taylor: The purpose of our organization is to reduce tobacco use in Canada, and in order to do that -
Mr. Epp: But you could do that whether or not you were registered as a charity.
Ms Callard: The reason Revenue Canada gave us charitable status - you might want to put it to the department, but I think it has a policy of promoting a series of categories, education, health, culture and so forth. So it was in recognition of that that it made the decision - I mean, we applied - to grant us charitable status.
Mr. Epp: But you do issue charitable taxation receipts to the people who donate to your organization.
Ms Callard: Oh, yes.
Mr. Taylor: Yes.
Mr. Epp: You receive no direct government funding?
Mr. Taylor: No. We recently did one small contract with Health Canada, but that was one short-term project, which has now been completed.
Ms Callard: That isn't to say we would turn it down.
The Chairman: The chairman would like to know whether the organization gets any bequests from deceased smokers.
Mr. Taylor: Any...?
The Chairman: Bequests.
Mr. Taylor: No.
The Chairman: I thought I had a good line.
Mr. Epp: Lastly, Mr. Shand.
Mr. Shand: Well, we have a budget of about $2 million. Those funds are entirely derived from our membership, which is voluntary, as I indicated in my opening statement. In the last decade, on two occasions, we have had contracts with the Government of Canada. The current contract is with the Minister of Human Resources Development, which relates to management development training programs for the entire sector in Canada, and we are providing the majority of funding for that.
Mr. Epp: So other than when you are on contract with the government, you receive no direct government grant.
Mr. Shand: Absolutely not. We never have.
Mr. Epp: Mr. Shand, are you aware of any organization that has had its charitable or their non-profit status revoked because of failure to properly fill in government forms and meet the conditions of them?
Mr. Shand: In fact we had a meeting with officials of Revenue Canada on this very point last week. My understanding is that in the last year or two, for every two charities that have been approved, that are new entrants, if you will, to the system, one has been revoked. Approximately 2,000 have been revoked in the last couple of years.
I know of an organization that was based in Ontario that had its status revoked, but it wasn't for reasons of not providing information; it was because it was deemed to be an advocacy organization.
Mr. Epp: How widespread do you think abuse is in this system?
The Chairman: What's abuse, Mr. Epp?
Mr. Epp: Well, people who are hiding behind...the type of thing Mr. Bryden is after. I think his motivation is to try to expose impropriety. Are you aware of instances where people are paying excessive salaries as a way of rewarding somebody? Abuse is a very wide term. It's wrong; it's immoral. I know what it means.
Mrs. Chamberlain: We want to know more about Mr. Somerville.
Mr. Epp: Yes, let's find out more about Mr. Somerville.
Mrs. Chamberlain: I agree, and his pension.
The Chairman: Obviously we're getting hungry or something, because we are losing discipline here.
Mr. Epp: I really do want to know whether you know of cases of abuse.
Mr. Shand: No, there are not any cases of abuse. I'm not trying to be evasive; I simply do not know of any.
Mr. Epp: I have one more question, Mr. Chairman, for the three groups.
Would you promote the idea that this bill should apply to some charitable organizations or non-profit groups, but others should be exempt, and if so, why?
Mr. Taylor: If it applies to anyone, it should apply to everyone.
The Chairman: Is that how you feel, Ms Toupin?
Ms Toupin: I want a system that's fair, equitable and allows for a level playing field in terms of information.
The Chairman: I think we're almost out of time.
Thank you, witnesses. You've given us a lot of material on which to reflect.
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This meeting is over.