Why Bill C-470 should be defeated

CCA Bul­letin 30/10

Novem­ber 17, 2010

 

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.