The House resumed from February 6, 2009 consideration of the motion that Bill , be read the second time and referred to a committee.
Madam Speaker, for several years, a number of representatives of not-for-profit corporations have been pressing to have the Canada Corporations Act modernized. In the past decade, numerous people have taken part in consultations, while others have made written submissions to Industry Canada calling for amendments to the Canada Corporations Act.
Since 2002, both Liberal and Conservative governments have tried introducing various bills, but they all died on the order paper. In spite of everything, it is quite clear that there is a common desire on both sides of the House to modernize the Canada Corporations Act, especially since the bills introduced by previous governments have all been very similar.
To briefly summarize Bill , its primary aim is to propose new legislation on not-for-profit corporations that would establish a more modern and transparent framework for such organizations. The operational framework for not-for-profit corporations would be similar to corporate governance under the Canada Business Corporations Act. The new act would gradually repeal the Canada Corporations Act and would replace parts II, III and IV of that act. Although the bill is complex, the new framework that will govern not-for-profit corporations should considerably simplify and clarify the role of these corporations in our society, both for their members and directors and for the general public.
It is exceedingly clear that extensive changes must be made to the Canada Corporations Act. For that reason, the Bloc Québécois is in favour of the principle underlying the bill. However, it is evident that some aspects of the bill must be examined in committee.
The Bloc Québécois supports this bill for a number of reasons. First of all, the process for establishing a not-for-profit will be considerably streamlined and much more transparent. The act currently requires not-for-profit corporations to keep detailed accounts of their activities but does not require disclosure of these accounts. Bill requires not-for-profits to make their financial records available to their members, directors and officers, as well as to the Director.
This will permit directors and officers to better manage and supervise the corporation, and allow members to monitor the financial situation of the organization between annual meetings and ensure that funds are used only in the pursuit of the stated goals and objectives.
With regard to efficiency, replacing the letters patent system, involving a sort of order signed by the minister, with an as of right system of incorporation makes it much easier to set up not-for-profit organizations. First, the discretionary approval process would disappear and the incorporation process would be simplified, giving corporations greater flexibility. This process would also be more efficient and less expensive, both for corporations and for the government.
Second, eliminating the obligation to have by-laws approved gives corporations the flexibility to create by-laws to meet their particular needs. It is high time the minister's discretionary authority in this area was abolished. This will increase not only the credibility of not-for-profit organizations, but public confidence in them.
I would also like to take this opportunity to point out the main issues the Bloc Québécois and many representatives of not-for-profit organizations have with Bill . Currently, the Canada Corporations Act does not have a classification system for NPOs. Bill C-4 does not contain a mechanism to change that.
In the government's view, the new act does not need a classification system because the framework is permissive and flexible, allowing organizations to choose how to apply many provisions.
However, according to the national charities and not-for-profit law section of the Canadian Bar Association, not including a general classification system is a major flaw in this bill. It then becomes important to specify if the not-for-profit organization is charitable, mutualist, political or even religious, because they would be different. I am only trying to highlight various distinctions, but we believe that the committee should tackle this issue.
As well, section 154 of the Canada Corporations Act currently stipulates that the federal minister may grant a charter of incorporation if the corporation thereby created pursues objects “to which the legislative authority of the Parliament of Canada extends, of a national, patriotic, religious, philanthropic, charitable, scientific, artistic, social, professional or sporting character, or the like objects.”
It seems that clause 4 of the new legislation would not require a not-for-profit organization to include in its statutes the objects it intends to pursue, thus sidestepping the whole notion of specifying what action an organization can take in accordance with its goals. Since we know that the federal Parliament has jurisdiction only over organizations that do not have provincial goals, this raises the following question: Why does the bill not include some provision to oversee what falls under federal jurisdiction? The Bloc Québécois feels that this question should be studied in committee as well.
These are legitimate issues that the Bloc Québécois is trying to defend. Under section 92 of the Constitution, managing the social economy, volunteering and community activities falls within provincial jurisdiction. As set out in that section, all matters of a “merely local or private nature” fall under Quebec's exclusive jurisdiction.
It is important to note that the federal Parliament has jurisdiction only over those organizations not pursuing provincial objects. Subsection 92(11) of the Constitution Act, 1867, grants the “incorporation of companies with provincial objects” specifically to the provinces.
Accordingly, there seems to be a serious flaw in the bill and it must be carefully examined to avoid any potential conflict between the provinces and the federal government.
At the beginning of my speech, I said that, for some time now, representatives of not-for-profit corporations have been calling for amendments to bring the Canada Corporations Act up to date. For reasons of transparency, efficiency and fairness, the Bloc Québécois believes that these amendments are legitimate and essential. However, certain points need to be clarified in committee. Whether on matters of classification or the jurisdictions of each level of government, we believe that the committee must provide clear answers.
Madam Speaker, it is a pleasure to speak to Bill . It is an important bill for a couple of reasons, but it really shows how the government has missed the mark, especially for the not-for-profit and charitable sector.
At a time when charitable donations have gone down, the government has reduced what people get back in terms of giving. It has not adjusted the formula properly. Over the last number of years a lower tax rate has been applied and it has reduced the charitable money we get back from the government. In not having fixed that, it has taken money away from charities and from individuals who give to charities. The government has decided to bring forward a bill that is basically a legalization of Robert's Rules of Order at a time when charities are struggling to get by. I am not going to accept that. I am not going to accept the bill in its current form. The government needs to be told to clean up its act and do something for charities that are struggling.
Right now there is an economic meltdown. Many groups and organizations are suffering and trying hard to get by but some are actually closing their doors. The government is going to pass on incredible legal costs and also the costs of a whole process to those organizations. It is important to recognize that this started back in 2000. I remember going to the voluntary sector initiative outreach that was done in 2000. That was eight years ago.
My background is in the not-for-profit sector. I worked as a job developer at Community Living Mississauga. I worked at the Association For Persons With Physical Disabilities. I worked at the Multicultural Council of Windsor and Essex County. I have been a board director for the AIDS committee and board director for the Canadian National Institute for the Blind. I have been at the table and I know how complicated it is and how we need to improve some of the processes.
Accountability is important and some elements in the bill do that to some degree, but it is not the only thing that is in the bill.
We were asking quite clearly for new regulations with regard to charitable giving. We asked that volunteers be rewarded for their time. This is done in the United States where there is a tax writeoff for volunteering of time. We asked for the ability to give money back to people, as the Victorian Order of Nurses does in that it gives receipts for gas and volunteer hours.
What do we get from the government? We get a process that is going to further cause pain and suffering in those organizations which have to deal with it right now. There is no plan or assistance. That is the problem. That is why I am saying now is not the time to do this. The government should be told to go back to the drawing board and come back with something that has balance, bring back something that is going to provide the charities and the not-for-profit organizations the capabilities to fulfill the requirements of the bill without having to draw from their programs. That is what will happen, because they will have to retrain board members and staff to implement new administrative processes.
The technological age that has come about has made things even more complicated, through emails and a whole series of other initiatives which are also going to have some rules around them. All of that will have a cost to the organizations through their management systems, their computer systems and their processes. Where is the money going to come from for that?
Is the government going to come down hard on those organizations that will not be able to do that right away? Is it going to go through an audit and target different organizations that do not have the same capability as the large ones? That is important to recognize because not all organizations operate in the same way. I can understand the impetus and support the principles of trying to bring some accountability forward, which is important, but the Lions Clubs, the legions and many others are going to be pretty shocked and wonder if they are going to have to follow the same process as the Toronto Port Authority. That is not right and should not be done without providing any type of supports.
The government has had alternatives in the House. I had a private member's bill that would review the whole way charitable donations are treated. What I proposed is similar to a political donation; when money is given, there is a generous return. I have asked for the same thing, and for the charities to be capped at a certain level so it does not cost an exponential amount of money. People could get their return and the charities could move forward. When people give to a political party in this country, for example, $400, they get 75% of that back. If they give to the United Way, Scouts Canada, or the Victorian Order of Nurses they get a mere pittance back. I propose that we invert that so that those charities can have another revenue stream and ensure that the fiscal stimulus that happens in local communities goes to social organizations that are combatting the issues they are facing right now.
Some of the great organizations available to the public in my riding, such as the United Way, have to spend money from their reserves to support their current programs. They are going to be dealing with the consequences of a government that has put its head in the sand with regard to the economy for so many years and had this thrust upon them. The government has no plan. People are losing their homes. They have more social problems. They are experiencing greater stress in their lives. They will be turning to those organizations to get support. They will be turning to credit counselling. They will be turning to the Alzheimer's association to get assistance for their loved ones. They will be turning to all those groups to get the support they need.
Those groups will have to learn 170 pages of legislation and implement it at the time of greatest need in Canada. That is the wrong approach. The government should be told to go back to the drawing board and bring back some tools that would enable those agencies to deal with this change, put some money toward it and deal with the other issues that the voluntary sector initiative raised. Those elements were to strengthen those core organizations so that they would have the capability to plan for the future and expand their mandates in Canada in order to deal with new cases and problems in a fair way.
There are some elements in Bill that I do support. There are some good things, but they cannot be done alone. Once again, there were consultations in 2000, eight years ago. There were some talks and discussions by some groups back in 2002 and 2005. They were a more modest approach than the 2000 consultations which took place across Canada. However, those are years in the past and those consultations were done in a time that is totally different from today.
The government needs to start thinking about the organizations that are supporting the social economy. The social economy is significant in this country. Eight per cent of our GDP is tied to those groups and organizations that are helping people get by. They provide the services and programs that governments often turn their backs on because they do not want to fund them. People in our civil society decide that they are not going to put up with that and they form collective organizations to make a real social change, to make a difference. They fight back by creating an organization, choosing a board of directors and becoming incorporated. They start doing the charitable work that is so necessary for the people of their community, and in fact their country, because those organizations work together across many regions and provinces.
These organizations are going to have thrust upon them another cost, expense, process and procedure that is going to divert them from their necessary work. I think of some of the things that have happened just recently in my area. The Alzheimer Society just opened up a new facility in Windsor and Essex county. Sally Bennett Politidis is the chief executive officer. It is a great organization and has been able to open its doors and provide more respite care to assist a number of people who are not getting support from government programs. People are behind it. Lots of money has been donated.
The Alzheimer Society had a good campaign and has opened a beautiful new building that it is sustaining. Now, that organization is going to have to spend its time looking at a bill and deciding how it is going to change its operations to cope with this new set of rules when what it really needs is support from the government to sustain its operations. That is what should be happening.
There is absolutely nothing in the budget; the economic action plan, as it is referred to, did absolutely nothing for not-for-profit entities, not a single thing. Not only did it not support the traditional programs, such as child care, that we have been fighting for in Parliament, the government turned its back on every not-for-profit and charitable organization.
It has known about its actions and about clawing money back from Canadian taxpayers for the last number of years. The last number of budgets have reduced the bottom income for taxation. That is coupled with the rate of return one gets for charitable giving and that has shrunk over the years. It has gone in the reverse direction. I will concede that it is only a few dollars per person, but it is a symbolic gesture of a government that will not even address a simple issue and it turns its back on charities and other organizations. That is unacceptable.
Once again, I submitted a private member's bill. There have been other submissions, but my bill is about treating charitable donations similar to the way political donations are handled. I asked for unanimous consent for the bill to bill to pass and it was denied. It would have been an important one that could have been effective.
When I put the bill forward last year, parliamentary research came back and said that it would cost around $800 million to do it. I said we could phase it in over time, but at the time the government said that it was just too much money, that it could not afford $800 million of taxpayer money.
Ironically, that money would have gone to local communities because it would have gone toward donations of individuals. It would have been a tax return for people, a tax investment back to the social programs that we support in our community. Those charities and organizations would be able to track new donors. The number of donors is dwindling in Canada because people cannot afford it as much any more.
The government said that it was too much money at that time. Look at what it is doing right now with the billions of dollars going out to the banks and so forth. They seem to get their share, but there is no money for individuals who give to charities. There is no money to reward people who give to Scouts Canada or to hospitals and universities. They count as well. There is no money for people to decide how they want to help advance civil society.
Instead the Conservatives have come back to Parliament with an old retread bill that has been tabled a couple of times in the House of Commons, a bill that was widely consulted on eight years ago. Society was much different eight years ago than it is now. Now the government is going to ram it down our throats.
This is what the government is going to do for the not-for-profit sector this year. It has not included them in the economic stimulus package. It will reduce the amount that individuals can get back at tax time. It is also going to give them new Robert's Rules of Order so boards of directors, staff and all administrative components will need to be reviewed and evaluated. In addition, the organizations will probably require some legal advice on that, for which the government will not provide assistance.
That is not right. These organizations, such as the Big Brothers Big Sisters in my riding, need to be concentrating on ensuring people can continue to volunteer and support them.
They have two fronts with which to deal. They have a front where people do not have enough money right now to donate, and donations are slipping. They also have to deal with the fact that volunteers are drying up as well, and that is important to recognize. The volunteer initiative needs focus. The not-for-profit organizations said at the time that they wanted to stimulate their volunteers and reward them.
There are all kinds of things we could do. The United States gives a tax credit for that. There are all kinds of opportunities to do something for those individuals. Let us face it. A lot of Canadians now need one or two jobs, or they go back to school, even if they work right now. They have less time to give to those organizations.
This needs to be adjusted. We need to focus on some type of legislation that will facilitate that type of encouragement. I cannot believe the government would come forward with this bill without including some of those other initiatives. It has denied the other requests that were made and has brought in a new set of Robert's Rules of Order for the not-for-profit organizations. They are on their own.
Enough is enough. If this makes it to committee and we end up spending time on this, we will have to bring all the not-for-profit organizations to the table. We need to hear from them. We need to know what is happening in their industry. We will need to know how they are getting by right now. We need to know how they will implement the legislation, while not affecting a single penny of the revenues going to their programs.
It would be a shame if the Conservatives, supported by whomever here, would implement a bill at a time when these charities need our support. If passed as is, the bill will take money out of programming, because not-for-profit organizations will have to do more administrative procedures. This needs to be addressed. There needs to be a plan behind it. I have not heard that plan. I have listened to the government on this and I have not heard anything from the comments of the Conservatives to deal with that situation.
I do not think anybody in the House wants to go back to their communities right now and see money taken away that could go to programs right now or to updating facilities to deal with the financial and other implications and the stresses with our current economy.
My area has had 10% unemployment for the last number of years. We just finished our United Way campaign and it had to pull from the reserves. That traditionally is not the situation. With the downturn in the automotive sector and a number of different manufacturing sector losses over the years, we have lost great generosity from members, men and women, often in the CAW. Also our salaried employees give the most per capita in Canada.
However, we are having a problem now. The loss of those jobs has eliminated the donations, not only from the companies that used to donate, and some of which made large donations to the United Way, but also those individuals who used to be employed by them. That has dried up as well. The ones left are stuck with having to pull things together.
I congratulate the men and women of CAW Local 1973. Despite having their transmission plant close in 2010, they upped their donations and led the United Way. The men and women of the CAW came forward and gave more money than ever before, knowing they would lose their jobs.
They are not giving up on the charitable sector. Those individuals are saying that we have to more. What does the government do? Yes, it does more. It gives them a Robert's Rule of Order that will take away from those groups, and that is unacceptable. It could have put something in the budget. It could have attached something to the bill. Even if it did not want to put out cash or some type of stimulus for the agencies, it could have rewarded Canadians who give to charities. The government decided not to do that.
The government decided as well to not even reward the volunteer effort of Canadians, the thousands of hours that people give to charities, whether it be for the environment, for children, for seniors or for educational institutions, on all of those things it could have given some type of reward for individuals to show them that needed to get engaged in their communities and if they did, the government would reward them. It could have shown people that it recognized the fact that they needed to get more active in their communities.
That is what is happening in other parts of the world. There is a recognition that people need to come together stronger than before. The government could do some type of small initiative for that or at least throw a crumb, just do something. People are willing to continue to do these things, but they are under much greater stress. Once again, they are either working one or two jobs, or going back to school and retraining. All those things are happening right now.
I say no to Bill . I want the government to go back to the drawing board and bring forward something that will be progressive and balanced for the charities and ensure that it will not cost any money for them. If the government is going to bring in something, it should at least acknowledge there is going to be a cost.
This side of the House recognizes that there is a responsibility on the government side to reward those Canadians who are giving their time or their money. Both are values that are important to recognize and they are values that strengthen our civil society. They help eliminate poverty, reduce crime, improve literacy and help people who are sick get better, whether one sits on the board of directors at a hospital, or on a board at a university or college or whether one is the person working the bingos at night. This is another industry that has been crushed because of the border issues. We have seen revenues dry up from that. People would go out and give their time, with late hours, just to ensure that a few dollars would come into the organizations.
We recognize there needs to be a partnership and the government needs to be there for them. Implementing a Robert's Rules of Order that will cost their administration time, money is irresponsible. They are also probably going to have to deal with some of the computers and other systems they run and to do so without any support. We want to see something brought forward that will meet the needs of Canadians, not-for-profits organizations and their charities, not attack them at this time.