Just the facts
As reported in CCA Bulletin 22/10, Bill C-470 has passed second reading in the House of Commons and is now heading for study by the standing committee on finance. Introduced by the Hon. Albina Guarnieri (Liberal, Mississauga East – Cooksville), this private member’s bill would allow the Minister of National Revenue to deregister any charitable organization, public foundation or private foundation that has paid any employee $250,000 or more in total compensation. This would put an unprecedented compensation cap on charitable organizations and foundations. It would also allow the minister to publish the names and compensation details of a charitable organization’s or a foundation’s five highest earning employees, regardless of their compensation level.
While many cultural workers in Canada need not lose sleep over having their salaries capped at a quarter million dollars, Bill C-470 has consequences not only for a number of major arts organizations, but also for the smaller ones. This is why the Canadian Conference of the Arts (CCA) has asked to appear in front of the committee and at the request of the committee’s clerk, has sent, like many other charitable organizations in Canada, a one pager which outlines the reasons for its opposition to the bill, at least in its current form.
Tell me more
While the CCA fully supports the call for transparency within the structures of charitable organizations in Canada, it is our opinion that in its current form, Bill C-470 is largely unnecessary and that if the bill is not amended, it will be to the detriment of civil society and charities in general, causing particular harm to the arts sector in Canada.
While a large number of organizations in the arts, culture and heritage sector are classified as charitable organizations, the vast majority receive only a small percentage of their revenue from donations. Because of the small percentage of donations, Bill C-470’s current language acts as a sledgehammer cracking a nut. Since the bill establishes no threshold for disclosure, for many small charities, this could mean that the compensation level of all employees, regardless of their role or compensation level, would be disclosed publicly.
Take the CCA’s own case: over the past three years, charitable donations have contributed a small but much needed one per cent of total revenue to the organization. We have a total of five employees, three of whom are part-time. Yet, the provisions of C-470 as they now stand would force us, in the name of accountability and transparency, to make public the salaries of all five employees. Our case is not unique in the arts, culture and heritage sector and even less so in the non-profit community. Not surprisingly, it is our position that as it now stands, Bill C-470 would create an unwarranted intrusion on Canadians’ right to privacy.
Apart from having unwanted consequences, the bill as it now stands is intrusive and interferes with the autonomy and fiduciary responsibility of the boards of charitable organizations. The bill would see the federal government limit the autonomy of those boards in a way that no other sector faces – even sectors that receive far more public funding both in absolute terms and as a proportion of their revenue.
Finally, we believe that the cap is inconsistent with other Government of Canada policies, such as the science and technology strategy that is recruiting the most sought after researchers in the world to come to Canada – with appropriate compensation. The CCA fully supports the position that for many sectors, notably education and research, the salary cap could lead to a brain drain that would be severely detrimental to Canada. Bill C-470 saps Canadians of the power to recruit and sustain highly-skilled, experienced and intelligent leaders within the charitable sector. We also understand that no other jurisdiction has unilaterally capped compensation in the charitable sector and that in the United States, a similar initiative has had the perverse effect of pushing compensation higher up!
The CCA believes that Revenue Canada already has measures in place to regulate non-profit spending. Canadian charities are already required to publicly account for their organizational activities and finances, including information on staff compensation. The T3010 form requires the provision of a substantial amount of information, including: contact information; details about directors; detailed revenue and expenditure information; descriptions of charitable programs; political activities; transfers to qualified organizations; and fundraising revenues and expenditures. Charities must also report compensation information on Schedule 3 of the T3010 form which includes the total number of full-time staff, the total amount of staff compensation and the total amount paid to part-time staff.
For all these reasons, the CCA considers the bill both unnecessary and potentially harmful.
What can I do?
Share your concerns with the members of the standing committee on finance by reformulating in your own words, and with regards to the particulars of your organization, the position expressed by the CCA. Do not forget to copy your own MP on your correspondence.
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