Proceedings of the Special Senate Committee on the
Anti-terrorism Act
Issue 14 - Evidence - Afternoon meeting
OTTAWA, Monday, June 20, 2005
The Special Senate Committee on the Anti-terrorism Act met this day at 1:35 p.m. to undertake a comprehensive review of the provisions and operations of the Anti-terrorism Act, (S.C. 2001, c.41).
Senator Joyce Fairbairn (Chairman) in the chair.
[English]
The Chairman: Honourable senators, this is our thirty-first meeting with witnesses of the Special Senate Committee on the Anti-terrorism Act. For our viewers, I will explain the purpose of this committee.
In October 2001, as a direct response to the terrorist attacks in New York City, Washington, D.C. and Pennsylvania, and at the request of the United Nations, the Canadian government introduced Bill C-36, the Anti- terrorism Act. Given the urgency of the situation then, Parliament was asked to expedite our study of the legislation, and we agreed. The deadline for the passage of that bill was mid-December of 2001.
However, concerns were expressed that it was difficult to thoroughly assess the potential impact of this legislation in such a short period of time. For that reason it was agreed that, three years later, Parliament would be asked to examine the provisions of the act and its impact on Canadians with the benefit of hindsight and a less emotionally charged public. The work of this special committee represents the Senate's efforts to fulfil that obligation.
When we have completed this study, we will make a report to the Senate that will outline any issue that we believe should be addressed and allow the results of our work to be available to the government and the Canadian public. The House of Commons is undergoing a similar process at this time.
So far, the committee has met with government ministers and officials, international and domestic experts on the threat environment, legal experts, those involved in enforcement and intelligence gathering, as well as representatives of community groups.
This afternoon, we will consider the impact of the Anti-terrorism Act on charities. We are fortunate to have with us Robbin Tourangeau, Vice-President, Public Policy and Government Relations, from Imagine Canada, who is joined by Peter Broder, Corporate Counsel and Director of Regulatory Affairs. We also have with us Blake Bromley, a partner with Benefic Lawyers. We also have the need, as always, to watch the clock and to ask questions and give answers as concisely as possible. We have a little less than two hours. The floor is yours, gentlemen, and the senators will be eager to question you when your presentations are done.
Mr. Peter Broder, Corporate Counsel and Director, Regulatory Affairs, Imagine Canada: Thank you, madam chair and senators, for giving us the opportunity to appear before you today to discuss the Anti-terrorism Act and its impact on charities.
Imagine Canada has about 1,200 members and is the largest umbrella group in Canada mandated to advance the interests of charities and non-profit groups. It was founded by the Canadian Centre for Philanthropy and the National Coalition of Voluntary Organizations, and it integrates the functions of those two groups.
Canada has a large and active charitable sector, founded on high levels of public trust and a long national history of work by philanthropic organizations. However, Canadian charities exist in an environment where demands often outstrip resources. Many organizations, particularly more modest-sized charities, rely heavily on volunteers and donations. In this context, it is important that laws governing charities not unduly undermine public confidence in the sector or place regulatory burdens on organizations that cannot be met. The Anti-terrorism Act can be faulted on both these criteria.
Imagine Canada supports reasonable and proportionate legislation to deny resources to terrorist groups and to prevent diversion of monies intended for charitable purposes to illicit activity. However, the current legislation, and in particular part 6 of the Anti-terrorism Act, the Charities Registration (Security Information) Act, do not accomplish these objectives in a reasonable and proportionate manner. Rather, with its sweeping applicability, imposition of absolute liability and abrogated procedural safeguards, we believe that the legislation discourages legitimate charitable work and leaves organizations faced with compliance obligations that are impossible to meet. It also conveys a misleading impression to the public that the sector is a locus of illegal activity.
The National Survey of Non-profit and Voluntary Organizations released last September provides the most thorough information that has ever been available on the size and scope of the Canadian non-profit and voluntary sector. Although there are some large institutional charities, small and medium-sized organizations predominate. The study found that more than half of these organizations have no paid staff and that more modest-sized groups are apt to depend on public donations to a much greater extent than bigger organizations. Small and medium-sized organizations are thus more vulnerable to any erosion of public trust. Owing to their limited resources and dependence on volunteers, these groups also have more difficulty in coping with complex and arduous regulatory obligations. A typical charity does not have the resources to retain legal counsel to provide compliance advice on an ongoing basis.
The Canada Revenue Agency indicated recently that no charity has yet been refused registration or had their registration revoked through the security certificate procedures contemplated in part 6 of the act. In our view, this argues that the standard regulatory regime is adequate in dealing with the allegations of charities' association with terrorism. Under the Income Tax Act, any registered charity is subject to revocation if its activities are not exclusively charitable. As well, Criminal Code prosecution of terrorism financing activity is available for intentional provision of funding or resources to illicit groups or activities.
Transparency and accountability are essential to fostering public trust in the sector. Recent reforms to the regulation of registered charities provide for increased disclosure of information, both by the regulator and by sector organizations, as a means to achieve this.
In contrast, the secrecy provisions that underpin part 6 are apt to lead to fear and suspicion of charitable groups. These provisions potentially contribute to public misconceptions casually linking charities with terrorism.
Under the Anti-terrorism Act, registered charities are absolutely liable for any support of terrorist groups or resourcing of terrorist activity that occurs through them. There is no requirement that an organization know that it is associated, or that it tends to be, with the illicit group or activity. There is also no provision for a due diligence defence for cases where an organization took reasonable steps to ensure that it was not or would not be used as a vehicle to support or resource terrorism. Finally, there is no protection currently available for charities that voluntarily disclose that they have inadvertently breached the statute. A registered charity should be able to rely on having devoted reasonable efforts, given its size and resources, to ensuring against inadvertent or unwitting association with terrorist groups or terrorist activity.
Charities face tremendous pressure to spend money on program activities rather than administration. Governments and foundations frequently prefer to fund projects rather than organizations; contemporary donors often like to see their gifts spent on specific activities. This means that the resources available to fund overhead costs are usually quite limited. Legislation with open-ended compliance requirements is not tenable in this context. Given the limited use of the act's provisions to date, the breadth of the powers available under this legislation appear to be out of proportion to a reasonable assessment of the danger posed by charities with respect to support of terrorism.
The dilemma that the provisions of the current act place charities in was illustrated by the humanitarian assistance efforts that occurred after the tsunami disaster struck Asia. In both Sri Lanka and Indonesia, entities considered terrorist organizations operated in parts of those countries requiring relief. Under part 6, registered charities providing assistance in these areas would potentially be subject to security certificates and deregistration if any part of the supplies provided by these groups ended up being used by terrorist entities in the vicinity. This situation was a very concrete example of the drawback of the legislation's over-broad provisions.
Denying resources to terrorist groups and preventing monies intended for charitable purposes being used for illegal activity are extremely important public policy objectives. However, in meeting these objectives, the provisions of the Anti-terrorism Act impose unreasonable and disproportionate requirements on charities. It should actually be redrafted to deal with the legitimate harms it is intended to address with greater precision and to mitigate the adverse impacts it currently has on the work of charities.
The Chairman: Thank you very much. Would you like to make your presentation, Mr. Bromley?
Mr. Blake Bromley, Partner, Benefic Lawyers, As an individual: I am honoured to have been invited to address you and the other senators that are undertaking this review of the Anti-terrorism Act. This invitation is an honour that I did not seek; but appearing here today is a responsibility I cannot refuse.
In the past few years, I have spoken at seminars on terrorism and charities at Oxford University, UCLA, Beijing, London and Washington, D.C. My reluctance in appearing is because this experience has taught me that when discussing terrorism, it is always easier to contribute sound and fury to the public discourse than wisdom. While I have considered views rooted in a great deal of international experience, my considered views do not provide simple solutions.
This special committee is charged with considering a subject fraught with extreme complexity, but the issues are frequently reduced to a simplistic ``you are either with us or against us in the fight against terror'' mantra. All too often, the public discourse is carried on in such emotional and confrontational terms that it is difficult for reason to survive the rhetoric and wisdom to trump the passion and zealotry of the argument.
Canada acted quickly after the events of September 11, 2001 in passing the Anti-terrorism Act. It is prudent of the Senate to consider whether the passage of time has shown some of its provisions to be ill-conceived or too draconian. The committee is to be commended for soliciting the analyses and experiences of organizations and citizens who have been impacted by this legislation.
Most of the public discourse in terrorism suffers from too much attention being paid to the events of September 11, 2001. This undue focus on 9/11 leads credence to the allegations that the Anti-terrorism Act is only a legislative exercise to keep President Bush happy because Canada is genuflecting on cue whenever the ``war on terror'' is brought up, and otherwise this legislation is to be ignored.
However, my experience with terrorism is not confined to watching television clips of that sad day. I spent 10 months in South Vietnam in 1970 and 1971, where my work for an NGO involved many hours daily driving in Saigon traffic. Consequently, while still a university student, I learned that my survival might depend on how alert I was to young people riding motorcycles with C4 taped to their bodies as human bombs.
In 1973 and 1974, I worked in even more dangerous circumstances, in Mindanao in the southern Philippines, with an NGO trying to build peace between the fighting Muslims and Christians. Terrorism is seldom more graphic than seeing the head of a Muslim put up on a pole at the entrance to a Christian village. The dynamic of such terrorism was proven the following day when the Muslims retaliated by disembowelling a pregnant Christian woman to incite more hatred and increase the level of violence.
More relevant than my exposure to terrorism in many parts of the globe is the fact that I am from Vancouver. In my own city in Canada I have witnessed the violent strife between warring factions in Sikh temples. You all know a current cabinet minister, the Honourable Ujjal Dosanjh, who as a young immigrant was beaten to within an inch of his life in an act of terror in Vancouver, perpetrated by those who wanted to bring to Canada the very political and religious extremism he had sought to escape by emigrating.
Canadians too often forget that the largest single act of terrorism prior to 9/11 was the bombing of Air India flight 182 in 1985. That bomb originated in Vancouver and the alleged perpetrators were deeply involved with registered charities. Consequently, it was not a complete surprise when I was told by senior officials in India in the late 1980s that their banking legislation regulating the flow of charity money into India — which at the time I considered draconian — was primarily aimed at money from Canadian donors destined for Khalistan.
UN Security Council Resolution 1373 required Canada to pass legislation to prevent the international flow of charity money to fund terrorism. However, the focus should not be solely on the destination of the money. The legislation must give regulatory officials in Canada the tools necessary to protect Canadians in ethnic communities from being forced to fight and fund political and religious battles that they sought to escape by immigrating to Canada. Canada fails these immigrants when our charities become social organizations that coerce Canadians to maintain ethnic and religious hostilities and prolong prejudices and practices that have no place in our country under the Charter of Rights and Freedoms.
It is important to realize that donors to charities that misuse their funds for terrorist or other purposes may be victims who have been failed by the regulatory regime in Canada, rather than being villains funding, facilitating or contributing to terrorism. Reading the relevant provisions of the Criminal Code, it is difficult to apprehend any appreciation of the possibility that such donors may be victims rather than villains. This committee should review the mens rea requirements with this consideration in mind.
Regulators are given extraordinary powers in the Charities Registration (Security Information) Act. I have no way of knowing the extent to which these powers are useful or have been used judiciously. There is nothing in my personal professional experience that has given me cause to complain about the utilization of these powers.
My concern is that the public discourse around this legislation seems to be focused entirely upon its efficacy in the international war on terror. The question to be considered is whether these powers are being used as effectively as possible to guarantee to ethnic and religious donors that they are not being coerced into funding, through Canadian charities, causes and activities that they sought to leave behind in their countries of origins when they emigrated.
Registered charities are the single social organization in which immigrants are most likely to invoke and experience all four of the fundamental freedoms set out in the Charter: namely, freedom of conscience and religion, freedom of thought, belief and opinion, freedom of peaceful assembly and freedom of association. Surely it is incumbent upon the Anti-terrorism Act to protect those fundamental freedoms within Canada to the extent that they are being threatened by forces intent on promoting terrorist activity. The focus should not be only on preventing funding to protagonists in the ``international war on terror.''
My criticisms of the Anti-terrorism Act focus mainly on the provisions in the Criminal Code. I believe the definition of ``terrorist activity'' should be amended to remove the stated requirement that the act be ``committed in whole or in part for a political, religious or ideological purpose, objective or cause.''
In October 2003, I was invited by the Charity Commission of England and Wales to consultation meetings in Botswana with senior representatives of governments in the southern region of Africa seeking to enforce UN Security Council Resolution 1373. I was shocked to learn how bitter and cynical many of these governments are about the anti- terrorism legislation enacted since 9/11.
Representatives from Sierra Leone, Ivory Coast and other countries told me with great emotion how often they had pleaded for assistance from the United Nations and the West by way of both UN resolutions and military help to stem the horrible terrorism inflicted by mercenaries and others raping both women and countries in their pursuit of the riches from blood diamonds and other natural resources. The notion that airliners flying into office buildings qualified as terrorism provoked open contempt. To them, terrorism was mercenaries and gangs using crude machetes to cut off the arms and legs of children to intimidate and torture those who were not cooperating in their quest to steal natural resources. These government officials were disgusted to learn that such brutal terrorism was not even caught by Canada's Anti-terrorism Act.
There was a sense of outrage that oppressors engaging in acts of the most basic and cruel terrorism for reasons of pure personal financial benefit need not worry about Canada's legislation, because a prosecutor will never be able to prove to the court that there is a political, religious or ideological motive.
The Canadian definition of ``terrorism'' lends credibility to the cynical view on the street in many parts of the globe that the only terrorism that matters to ``the world'' is terrorism that threatens the United States or Israel. Many millions of people in the world believe that the war on terror is in reality a war on Islam. Support for the ``war on Islam'' view is bolstered by the inclusion of a religious purpose requirement in the Canadian definition.
In my opinion, winning ``hearts and minds'' is a more important objective in winning the war on terror than all of the draconian powers to ``freeze,'' ``seize'' and ``forfeit'' property, issue security certificates and revoke charity registration, and even imprison offenders. This means that the legislation must be analyzed in terms of whether it helps or hurts in the public discourse on terrorism and the need to combat it.
The first point of contention in almost every argument in the public discourse on terrorism is the mantra that ``one person's terrorist is another person's freedom fighter.'' The Honourable Irwin Cotler, Minister of Justice and Attorney General of Canada, appeared before this special committee on February 21 and argued that this mantra was a ``false moral equivalency'' that must be jettisoned in favour of a ``zero tolerance principle.'' While this was stirring rhetoric, it is beyond my intellectual capacity to reconcile a ``zero tolerance principle'' with the definition that he introduced in the Anti-terrorism Act that only includes terrorism committed in whole or part for political, religious or ideological purposes.
I spend a great deal of my life flying around the world in airplanes, so my personal contribution to the international war on terror is eating airline meals with plastic knives. It is important to determine whether the Anti-terrorism Act is merely Canada's parliamentary participation in the great public relations exercise known as ``the international war on terror'' — sort of like the legislative equivalent to requiring airline passengers to eat their meals with plastic knives — or whether it is a genuine, made-in-Canada response to a problem of concern to ordinary Canadians.
It is not possible in the time allocated for my opening statement to address the many other issues that are raised by the Anti-terrorism Act. However, my overarching concern for the review of this legislation is that the review concentrate on how this legislation plays out in the public discourse on terrorism and not only on its technical provisions. It is only by drawing the ethnic and religious communities that feel the most vulnerable into the public discourse that you will obtain the intelligence necessary to calibrate this legislation appropriately. It is possible that some of the public discourse is being manipulated by misrepresentations made by those who should have legitimate fear of this legislation. They win to the extent that some of the overarching and draconian provisions in the Anti- terrorism Act enable them to denigrate the legitimacy of the legislation by ridicule. It is important for this special committee to remedy those provisions that contribute to Canadians denying or ignoring the possibility that some registered charities may be part of the problem while affirming that the vast majority of registered charities are part of the solution.
Senator Kinsella: I would like to get a sense of the number of charities we are talking about. You have indicated that your organization includes some 1,200 charities, and reference is made in your brief to some 81,000 registered with the Canada Revenue Agency.
How many charities do you think there are that are not registered? I would like to have a good picture of the number of charities in Canada.
Mr. Broder: The registration regime only covers those organizations that apply for registration. There would be a number of other organizations in the various provinces that are charities at common law. The national survey of non- profit and voluntary organizations indicates a total of 161,000 charitable and non-profit organizations. Some of those non-profits in addition to the 81,000 would be common law charities, but we do not have an exact sense of what the number would be.
Senator Kinsella: It is in the order of 81,000?
Mr. Broder: There are 81,000 registered and there would probably be thousands that are common law charities.
Senator Kinsella: The CRSIA only applies to registered charities, does it not?
Mr. Broder: That is correct.
Senator Kinsella: Based on your experience, what number of charities might potentially be in conflict at some time with the anti-terrorism legislation? More particularly, would they tend to be those charities that are registered, or would they be charities that are not registered?
Mr. Broder: Because registered charities have the ability to issue tax receipts for donations, there is a concern about terrorism financing through the registered charities as opposed to the common law charities. The act applies to all 81,000. Any association with terrorism — be it receiving donations from a terrorist organization in order to launder the money, be it running a terrorist cell in a corner of a refugee camp, or be it having a director on your board who has had some affiliation or connection with terrorism — can bring you within the ambit of the act. There is zero tolerance in terms of any connection with terrorism, subject to your registration.
Every charity in Canada should be looking at this in terms of all aspects of their organizations — how they resource themselves, their staff and their volunteers.
Senator Kinsella: Mr. Bromley, do you think that the last thing a charity that may have relations with terrorist organizations would do would be to apply for registration with a Government of Canada agency?
Mr. Bromley: If their intention was to raise money for terrorist activities, I would think they would avoid registration and go the non-profit route. The difficulty is that it is also possible to raise money in one name and use it internationally through another charitable organization.
However, in terms of your question as to how many charities are potentially caught by this, it is problematic that responsible relief and development charities work in parts of the world that are far more complex, where they are either with us or against us. You are potentially endangering the lives of aid workers in certain parts of the world if the perception is that the reporting requirements in Canada are anything like those required in the U.S. under the Patriot Act and the treasury guidelines, because a great deal of information is flown back. Nobody knows where it goes, but the presumption is that it is going to the CIA, which does not have the operatives in these countries.
It is life-threatening to responsible people working in difficult circumstances where it is not always clear who the terrorists are, and where there is some truth that the child of a terrorist is as worthy of medical attention as the child of a freedom fighter. Therefore, it is very problematic.
You can take the definition of terrorism into ordinary missionary activities. If you were a Protestant missionary organization that converted a woman in Saudi Arabia, who made a public declaration of Christian faith, that person for religious purposes would have had her life put in danger. It is amazing how far some of this definition goes.
Senator Kinsella: Thank you. Finally, Mr. Broder, in the penultimate paragraph of page 3 of your written submission, you speak of transparency and accountability as being important elements of fostering public trust in the sector: ``Recent reforms to the regulation of registered charities enacted in Bill C-33, the Budget Implementation Act, 2004, No. 2, provide for increased disclosure of information both by the regulator and by sector organizations as a means to achieve this. In contrast, the secrecy provisions that underpin CRSIA are apt to lead to fear and suspicion of charitable groups. The provisions potentially contribute to an erroneous public association of charities with terrorism that is out of all proportion to the reality.''
In the past three years, do you have evidence from some groups that this fear and suspicion has been manifested and, if so, how is that measured? What is the magnitude of that problem? Is it theoretical or real?
Mr. Broder: The challenge is that, because there is not the transparency, it is very difficult to measure it. We do know that Canada Revenue Agency is on record as having indicated that they have not used the part 6 provisions. We know that particular ethnocultural groups have experienced problems with other parts of the act. It is a reasonable inference, but there is no concrete evidence to that effect.
Senator Jaffer: Since the act has come into place, there are certain charities that have encountered difficulty doing humanitarian relief and development while working in countries. Do you know what the challenges are? What can we do to resolve this issue?
As an example, I saw on TV that with respect to the funds given for tsunami relief, the Sri Lankan government is now working with the Tamil groups to hand out these monies and goods. I know that LTT is not recognized as a terrorist organization here. If it were, would Canada be giving to charities monies that would be disbursed through a terrorist group? What is your experience in the humanitarian work?
Mr. Broder: In our brief there is a recommendation, and it mirrors the recommendation made by the Canadian Bar Association, that where the Canadian government endorses humanitarian assistance overseas, the organizations that operate in carrying out that assistance not be subject to the security certificate provisions in part 6.
The other way to do that is to put a due diligence provision in the act so that a charity that does go offside, when it is working in good faith, is not potentially penalized because of that. Those are the two suggestions we would make.
Mr. Bromley: This raises one of the problems with the legislation, because if you are a victim of an act of God such as tsunami in northern Sri Lanka and the government has no control up there, the only ones who can responsibly, capably and efficiently deliver the aid are the TRO and related groups. That is one of the difficulties with crafting legislation in black and white terms. It is compounded immensely when you have politicians who want to go to these areas and then get caught up in the domestic politics of ethnic groups.
A strict reading of the law would suggest that Canada is in contravention of UN Security Council Resolution 1373 to the extent that Canada matches donations that flowed into that part of Sri Lanka and also into Aceh. That does not necessarily mean that that was not the responsible thing to do. It suggests that we should be fighting with the issues and the subtleties rather than a black and white view dictated from Washington or wherever.
In the last month, I have been in Vietnam and Thailand with people from a wide variety of countries involved in NGO work and repeatedly asked them whether it had made any difference on the ground. For all they were concerned, none of this legislation from the Patriot Act or from Canada or anywhere else was being paid any attention at the ground level.
Senator Jaffer: In Canada there is certainly a chill in giving from some organizations because of fear of being pinpointed. People give for different reasons. You have religious obligations. If you are a Muslim, you give under zakat; if you are Jewish, you give under a religious obligation. Sometimes you give for charitable reasons or for a cause. The terrorist activity definition specifically defines a religion. This is causing some issues in the ethnic community as to whether one should even give to a religious organization at this time. There are some concerns of being pinpointed.
To add to that, sometimes you just give money but there is no tracking. Sometimes you give an amount of money and there are no receipts or tracking — not that it is going to terrorists or organizations, but there is no follow-up as to where that money goes. Have you any opinions on that?
Mr. Bromley: I have strong opinions that we need to begin to understand the mentality — and I do not use that in a pejorative sense — of the religious donor.
If the perception was that it was improper to give to a Christian missionary organization because it somehow offended this legislation, that may stop my father from donating to a registered charity, but it certainly would not stop him from fulfilling his understanding of his obligation to tithe.
In the fundraising field, you often raise more money by being oppressed or by saying that you will have your charitable registration taken away from you because you are an animal rights activist or involved in some area other than religion. Until we come to some understanding of the discrepancies between the intellectual and the spiritual process, between someone giving the zakat and the tithe and someone who is contributing to the opera, we will not get very far down this road.
Since 9/11, we have seen the introduction into the charitable world of money given from hate rather than from altruism. Some of the outpouring of money that occurred, particularly the money going into New York, was not because those stockbrokers needed money for their families. It was because people wanted to make a statement.
There has been a significant flow of money in North America since 9/11, not just from ethnic communities, but against the values of ethnic communities. I am sure that has happened in different periods of history before; but for the most part, the philanthropic dollar has historically been motivated by charity.
Senator Andreychuk: I am inclined to agree with Senator Jaffer that people give from very different motives. The term ``charity'' now means whatever I intend it to mean, nothing more and nothing less. Trying to get at this problem from the motive is not the correct approach.
There was a great deal of debate some 25 years ago as to whether a new Charities Act should be established, and whether the charities that sustain and support activity within Canada's boundaries should operate under a different set of rules than those charities that work abroad. Some of these issues were brought up three years ago when we were looking at the pre-study, and unfortunately they were not incorporated. I like the recommendations on the existing Charities Act.
Do you believe there is a need to completely change the Charities Act and to regard the whole concept of charities as a pre-1800s term? Is there merit in creating two distinct sets of rules, one for activities outside of Canada and one for activities within? Has terrorism now blurred that geographic distinction?
Mr. Bromley: Recently in England they have introduced a charities act with a 12-part definition of ``charity.'' The edition of that act that was introduced before the May election had no definition of ``religion.'' They have now added a definition of ``religion,'' and it is quite problematic. They are still working to smooth things out in that area.
The definition of what is charitable is quite different from the issues that are in front of this committee. I hope we can maintain Canadians' ability to exercise their philanthropic and charitable desires internationally. There is always the tax pressure and national treasury pressure to spend the money at home, but I believe Canada has benefited immensely from the amount of charitable funds that have gone overseas.
We are moving into a paradigm shift on that issue. Historically, the law has always decreed that a charitable purpose must be a legal purpose. That has been applied domestically but not internationally. One of the dangers of this new paradigm in the anti-terrorism legislation is that we have government officials working with regulators hand-in- glove in foreign countries. If you consider a gift to Zimbabwe for human rights in the area of a gay person's rights, or gifts into Saudi Arabia for religious purposes, these clearly are not legal purposes within the recipient country, and the law of charity has been very generous on this point.
One of the ironies of this whole anti-terrorism legislation is that if we went back to the 1950s and the Cold War era, there would be nothing higher on the scale of charity than smuggling Bibles into China and money into the Soviet Union in the hope that it would have the political impact of bringing down these governments.
When you look at the charitable sector in Poland and the role of the Roman Catholic Church or at the role of the Christian Church in Romania and the sudden downfall of Ceausescu, these have political implications that we supported heavily. Now we are not looking back and saying, ``We will hammer any of these guys if they are Muslims.''
We are changing the long-term paradigm of how international charity operates because we have decided, on a short- term basis, that a certain set of people with a different set of beliefs, of a different colour, are the good guys or the bad guys. We need to be very careful in terms of the long-term view of working our way through these problems. We must be careful not to succumb to the political pressures of the day in Washington, or even domestically, before we substantially change the character of what international philanthropy can and should be.
Mr. Broder: On the question of definition, the United Kingdom is currently looking at this issue. There is a need in Canada, given the philanthropic environment and the fragility of donations, to look again at which organizations should be eligible for preferential tax treatment or be able to give donations for receipts.
There are a couple of ways to do that. One is to step back and do it legislatively, as they are planning to do it in the U.K. The other way is to develop more case law so that the law develops through the courts, as it has historically over the last 400 years. This has been a very slow process in Canada, because there is a limited number of cases that have been heard by the Federal Court of Canada and only one case that has ever made it to the Supreme Court. It is a question that is timely, I would say.
It has been suggested that we are changing the paradigm through the Anti-terrorism Act. It is important to note that, to be aware of it, because we need to be doing that in a conscious way rather than an unconscious way.
In terms of whether a distinction should be made between charities operating in Canada and those operating overseas, that might be part of the larger look at the whole question. The Anti-terrorism Act affects all 81,000 charities. They are all subject to the same requirements.
Senator Joyal: Can you identify in part 6 of the act the parts of the various sections that you feel infringe upon the Charter of Rights?
Second, Mr. Bromley, can you explain more, on page 2 of your statement, where you mention that there should be provisions to apprehend any possibility that those who contribute be forced to contribute by their ethnic groups or community to which they belong? What kinds of provisions or what is the substance of such a provision? How can we implement such a provision? What is the practicality effect?
Third, in regard to the general conclusion of your brief, have you been made aware of any initiative the Canadian government would have taken with the NGOs to improve the activities of the NGOs internationally, especially in Third World countries whereby the improvement of the social and economic condition would be one of the key elements to prevent resurgence or existence of terrorism?
Mr. Broder: In terms of the infringement of rights, charitable status is a privilege; it is not a right in Canadian law. The provisions of the act have never been Charter-tested. However, there are elements of the legislation that abrogate traditional procedural safeguards: things like the evidentiary requirement, that there is no requirement that there be intent, or there is no legislative appeal or review contemplated. Those are the sorts of elements. They would be in section 4(7), the secret information, and 4(8). At the end of our brief we have indicated some potential changes to various sections of the act around restoring those abrogated procedural safeguards.
Mr. Bromley: If I understand the second question, what I was trying to say is that the legislation presumes that anyone who is making donations to a charity is a villain seeking to finance terrorism whether or not they knew anything about it or facilitated or had any mens rea.
The reality is that in many of these religious groups, charitable donations are given without receipt. Sometimes that is mandated by religion, sometimes it is the way people deposit the gift in the box at the temple. Those donors are not in a position to control what happens to that money in terms of addressing the concerns of this committee with regard to terrorism.
I have had donors from ethnic communities talk to me about how they have felt coerced on occasions to participate in funding certain activities that they were not comfortable about. The charitable world is good at coercion. You do not have to be in these areas. All of us can think of larger donations than we wanted to make to charities for reasons of our arms being twisted.
My point is that this legislation should not be used to simply go find the villains. This legislation should be used to ensure that we extend to ethnic and religious charities all the protections that they should be entitled to under the Charter and to assist those responsible elements within these communities who are very opposed to some of the more radical and fundamentalist tendencies both in terms of message and money.
Since the war on terror has become such a black and white situation where if you speak up, you are on the side of George Bush, we are hurting our ability to get within these communities to try to find the right solution and the balance between their traditional religious practices in giving and how to stop some of this from fighting battles and causes that they left behind or sought to leave behind when they came to Canada.
Senator Joyal: In practical terms, how would you regulate this?
Mr. Bromley: I do not think in practical terms you can regulate that. In practical terms, you want the legislation to not presume that everyone who may have offended by having made a contribution to a religious or other charity, that somehow is used inappropriately, is the villain. Then you put these people on the other side of the argument because they are now worried about their personal criminal liability.
What we want to do is to find ways where this legislation can provide an avenue for those who are unhappy with the level of radicalism in message or monetary use in some of the religious communities to have a vehicle or avenue to say to regulatory officials, ``Help me moderate this without it becoming a terrorist act.''
Senator Joyal: Is it in that context that you reach the conclusion that Mr. Broder has been giving us by suggesting that we have the words ``knowingly,'' or where it ought to have been known, in part 4 of the act, so that a person who contributes cannot be held responsible unless the person knows quite clearly or ought to have known, because of all kinds of circumstances, that his or her contribution could be channelled through a terrorist organization?
Mr. Bromley: On paper that brings us to somewhat the same place. In a subtle way, I am having difficulty articulating that. I am trying to change the tone of how it is utilized so if there are problems in these organizations, I will never know enough about them to come to this committee and tell you.
You will need to create a legislative and regulatory environment where people from within these communities feel confident enough to deal with the regulators to assist them in identifying the problems.
It is more the tone and the modus operandi as opposed to the black and white of the wording.
Senator Joyal: My third question was that since the adoption of the act, you are very active in the NGO field. Were you part of any government initiative or were you aware of any initiative to enhance the work of NGOs in countries whereby the improvement of the socio-economic condition would have been a counterweight to the resurgence or existence of terrorism?
In this committee we have heard from witnesses, such as Professor Neville, who suggested to us that the way to be effective in fighting terrorism is not only to adopt criminal legislation, but also to work internationally, especially in countries where there would be fertile ground for the seeds of terrorism, to ensure that citizens have better participation in the democratic process and that there is a fair level of social services and so on. Thus, there would be a general commitment to improve the social condition of people. That is as important as adopting criminal legislation in the Western world.
Were you aware or have you been invited to such an endeavour on behalf of the Canadian government?
Mr. Bromley: I have not been invited on behalf of the Canadian government, but I have worked with a lot of organizations in Africa and Asia in the last two or three years that are examples of the progress that can be made by a responsible humanitarian intervention. I have also been involved with a project where the Canadian government contributed $30 million to a livestock research institute in Kenya that has significant potential to deal with the science of bioterrorism and some of those other aspects. From that extent, maybe I have been involved with the Canadian government.
The point you are making is what I was trying to say before. There is a lot of good done out in the field. The difficulty your question poses to me is there is a very real danger that foreign aid is in the process of becoming an extension of government policy. For the charitable sector to operate effectively internationally, it needs to be doing good things, but it needs to be doing good things independent of the policy of the Government of Canada and certainly the policy of U.S. foreign aid.
There is a line where charities need to maintain their independence so they can do some things in the north of Sri Lanka when people need the aid without it becoming a statement that the Government of Canada supports the Tamil Tigers.
I both embrace and am very afraid of keeping it at arm's length. Some of the aspects implicit in your question of the value of charities operating internationally is they do operate independently of governments and, therefore, can move into some areas without having the foreign policy implication of the state doing the same thing. We need to be careful that we do not co-op the whole international NGO movement into becoming front-line fighters in the war on terror, because they then lose their independence and ultimately their effectiveness.
Mr. Broder: The legislation needs to be drafted in such a way that if an organization is trying to do that kind of complex work in a particular jurisdiction and it happens to go offside and some of the money happens to find itself in the wrong hands, there should be an incentive for the group to come forward and say to the regulator, ``This has happened. It is not a good thing. We have taken steps to prevent it happening again.'' Right now, if you disclose that to the regulator, you are subject to a security certificate. Why would you disclose it to the regulator?
Senator Fraser: Mr. Broder, I found your recommendations interesting. As I was reading your stuff and figuring out how it hung together, there was one recommendation I expected to see there but did not.
A number of people who have come before us have suggested, for various portions of the Anti-terrorism Act, that when there are secret hearings where the person involved does not get to hear what is said to the judge, but only gets a summary of the evidence, that it would be helpful to have a formalized system of Friends of the Court with security clearance, who would be able to see the evidence and make representations.
Although you did mention the damaging effects of secrecy, you did not actually suggest that. Is there a reason why?
Mr. Broder: Certainly we would be open to it. The challenge around part 6 is that it is not a criminal proceeding in the same way some of the earlier provisions are in part 1 of the act. We recognize it. It is very difficult to know, as Mr. Bromley was mentioning earlier, what is going on below the radar. We would be open to that kind of opportunity to have Friends of the Court when there is a secret process.
Our initial recommendation is to press the government for the legitimate needs being met by these provisions. It may be in certain cases there is a need for secrecy, but we think those should be limited and as confined as possible.
Senator Fraser: Presumably, the kinds of folk the act is actually designed to catch would be ones from whom you would want to keep a certain amount of material secret. The difficulty is how many others have you captured in the same net.
Mr. Bromley, I am trying to clarify in my own mind what it is you are asking us to do. I know you are asking us to get into paradigm shifts and attitudinal changes and whatnot, but here we are charged with examining an actual piece of legislation and making recommendations.
Part 6, the Registration of Charities — Security Information, does not actually talk about donors. It has to do only with the actual charities and their registration or loss of registration. You are not the first person to come before us and warn about charitable groups that are not, shall we say, all one might wish, that extract money from Canadian citizens, under very great pressure.
In terms of this piece of legislation, I am not sure what you are suggesting we do. One would like to do something. If you have a specific recommendation for us, I would love to hear it.
Mr. Bromley: In the terms of that legislation, I do not know the extent to which it hinges on changing the words, because I have not focused on the words as much, but it is viewing the legislation as an opportunity to protect Canadians in terms of a social institution, which is very important to immigrants in adjusting to a new country and maintaining their culture, their religion and many other things.
I am coming from the public discourse, but it seems to me the emphasis has been almost entirely on being out to nail the bad guys in certain ethnic charities. I would have to look at the legislation again. If the mandate of the legislation was not just to be Canada's role in the international war on terror and UN Security Council Resolution 1373 but was to address how regulators use the instruments they are given to try to guarantee that charities — rather than donors — live up to the expectations of the donors, in guaranteeing money is used for charitable purposes and for the legitimate religious purposes of the donor rather than possibly being the piggy bank from which senior officials, who have a fair amount of power in that community, can coerce the money, we would agree with that.
We have all seen, in an entirely different context, that a certain ethnic community will exploit its own sometimes, primarily in areas of farm workers or others. This is not something confined to charity and it is not confined to visible minorities. There is a certain vulnerability which new immigrants have.
Part of the duty, and part of what we as Canadians want to offer in our charitable sector, is that if you are contributing to this and if you are participating, we, being the regulators, will assist, to the extent possible, in guaranteeing that the money goes to the best aspects of your cultural, religious and ethnic programs and will not allow it to be coerced.
Somewhere in there is where we have a slim chance of unlocking the door as to whether ethnic people that are intimidated by their own, let alone by the regulators, will begin to open up as to how some of the bad things that may be happening operate.
Senator Fraser: It sounds to me as if this would be almost an argument for strengthening the regulatory process surrounding registration. What I am talking about would do nothing for unregistered money-raising ventures. However, for registered charities, the more certainty existed that those charities were being checked out, the more secure one would feel in contributing to them, correct?
Mr. Bromley: Possibly, but I do not think the registration process is really where the action is in this. It is what has happened two or three years down the road, when you have some momentum on how things are operating. I do not think they would need more powers. They are given very large powers. If part of this legislation — and this is again why I keep focusing on the public discourse — was understood in terms of how we really guarantee those four fundamental freedoms to the social organizations which embody them all, rather than this is part of the international war on terror, and we are lined up with these guys and against those guys, for that is where we will have absolutely no success. If you force someone to choose whether they are for us or against us in the international war on terror, I would prefer to be against us rather than for us, from what I have seen in terms of the impact of some of this legislation internationally.
Before he was elected, we had the new pope talking about dictatorship or relativism and how terrible that was. Yet, that is a term that needs to be applied in this field. It is not a black and white for us or against us. It really is relative. The charities are best positioned and suited to determine when they are working with the good guys and the bad guys. On balance, the charitable sector will do better in determining this than a regulator.
We have a problem with section 6 and the Criminal Code. The whole Criminal Code comes out of the mindset of money laundering. They have taken a prototype where you deal with criminal elements that can afford to hire the best lawyers and accountants in the world, can afford to buy their own bank in a country they may own and can move money around. We say this is a prototype for looking at money laundering going into charities. I have clients who ``smurf,'' as the money launderers would say. There is not any city bank branch in rural Pakistan. If you want money to get to rural Pakistan you had better know what a hawala is. Issuing a fatwa against a hawala does not help. It tells you that the boys in the suits in the corner offices do not understand this field.
We have created a huge dichotomy between legislation written by people with different agendas who do not understand the sector and, increasingly, a police mentality rather than the charity regulator mentality coming in. The front-line agents are the Financial Action Task Force people. Their presumption is that charities are the bad guys and the only charities they see are the bad guys. They do not tell us what they see. Essentially, you have police action dominating the regulatory process instead of the traditional, ``We will work with you to solve the problem.''
If you look at the FATF report, they looked at money laundering typologies in 2003 from the Financial Action Task Force. They focused on NPOs. They say that the experts came to the conclusion that ``the method for the best chance of success for detecting possible terrorist financing links to NPOs is through intelligence and police work... the diversity of possible detection mechanisms and information sources regarding potential abuses of charities underscores the importance of constructing effective information-sharing arrangements both within and among government authorities.''
These are the same people that said that ``the monitoring activities of supervisory or tax authorities responsible for NPO oversight do not appear to have identified any initial leads into terrorist financing cases within the charitable sector. However, these authorities have sometimes played an important role in developing relative leads by being able to ask further questions or inspect entities and/or share information with law enforcement agencies.'' That is a description of a fishing expedition.
Senator Day: Thank you for an interesting afternoon. Some interesting points have been raised here.
One of the points in your report, Mr. Broder, is the 2004 Muttart Foundation survey that was done. You talked only in terms of public trust. Were there any other interesting issues that might have come out of that survey that you could share with us?
Mr. Broder: This does not come directly out of the survey, but our sense is that the sector is highly trusted. However, it is a fragile trust. We are moving out of the concept of giving on faith, where people gave historically to the same institution again and again and donations were very much correlated with religiosity. We are entering into an area where there is still a very broad public goodwill toward charities, but that is a very fragile goodwill that is easily lost.
Senator Day: Was there any analysis done with respect to the points that you raised that this kind of anti-terrorist legislation could have a potential effect of reducing the amount of money available or that the public is prepared to give to charities, limiting the number of people who are prepared to act as directors on the boards of these various charities, or making it more difficult for these charities to obtain insurance for the board of directors and the management? This legislation has been around for three years. Has there been any analysis from the point of view of charities in relation to those points?
Mr. Broder: Not with respect to this specific legislation, but those are all issues with respect to the sector and the difficulty of recruiting. One of the things revealed by the National Survey of Non-profit and Voluntary Organizations was the difficulty of organizations recruiting directors. There is a huge concern in the sector over the availability of insurance and the cost of insurance when it is available. We know that the pool of donors as a percentage of tax funds is actually shrinking. It is a very fragile environment.
Senator Day: Are you telling us that you can track that from the time this legislation came into force in the fall of 2001 to today and that there has been a decline in the number of individuals giving to charities and the amount of money given to charities?
Mr. Broder: The amount of money has actually increased, but the pool of donors is shrinking. That has been a trend over the last decade.
Senator Day: I would like to tie this in to this legislation. Are you able to show an impact of this legislation on those issues?
Ms. Robbin Tourangeau, Vice-President, Public Policy and Government Relations, Imagine Canada: I do not think you can tie it directly. These are general trends. We have not done polling or any work on that specifically. However, if you look at the general trends and the other research that we have, it would indicate that when people are aware of the responsibilities that come with various pieces of legislation and their own personal liability, their willingness to give and to sit on a board of directors or something like that is seriously compromised.
Senator Day: Thank you. I will take from your submission that those issues are issues that are not helped any by this legislation.
Mr. Broder: That is absolutely correct.
Mr. Bromley: The majority of the part of my work that pays the bills, apart from running around and looking at these issues, is setting up private foundations. I have acted for donors who have donated well over $100 million a year for the last decade or more. Therefore, I talk to the donors because we are dealing with larger numbers. I would suggest that at the sophisticated donor level, this legislation has penetrated their consciousness and it is part of the discussion. If one is committed to international giving, it has not stopped it. If one is committed to religious giving, it has not stopped it. However, if one is looking for any excuse not to give, it is dead, and it is fairly important to people who do not have a legitimate fear but are looking for any excuse not to give internationally or to some of these things.
Senator Day: That was helpful. Thank you. I have two more questions. Is the Benefic Lawyers a not-for-profit organization?
Mr. Bromley: No, that is my law firm.
Senator Day: You operate in Vancouver?
Mr. Bromley: Yes, although my wife disputes that. She thinks I am always in an airplane.
Senator Day: You talked about the importance of credibility for these international NGOs and not being tied in to government funding. I am thinking of the tsunami relief effort and of the federal government's matching of funds donated here in Canada. I do not know in how many other countries that happened, but my understanding is that they had some conditions on the federal government's matching. They wanted to ensure that the NGO's contribution would be used in a manner that the federal government was happy with before they would match. Is that your understanding as well?
Mr. Bromley: That was their understanding of the ground rules. There was such an outpouring of money that no one was really prepared for how that would turn out. The difficulty is that it is pretty easy to be liberal on these issues when you are dealing with the first three weeks of the flood. The responsible NGO is worried about the development concerns and the long term and what they are doing in spending this money over three or five years as opposed to the initial response of getting money to gymnasiums. That is where these problems show up. In the long run, if these areas are controlled by forces that have been deemed to be bad, then you are in contravention of this legislation. However, those people in those areas are still in need, and many of the people in need have nothing to do with the conflicts, which they wish would go away.
I say that with some sympathy because I understand the problem. I spent quite a bit of time in Vietnam during the war, and I spent time in North Vietnam very shortly after the war in terms of working with groups who had been completely banned. The need of those people in the north was very real, notwithstanding that they were not the political favourites of the decision makers on this side of the Pacific.
It is very problematic legislation to try to tie into where governments are going. Certainly in the U.S. prior to the Iraq war, they were lining up payments in the hundreds of millions of dollars to individual NGOs to go in and reconstruct. If there ever was a plan for success, it involved co-opting the NGO movement. The NGOs need to stand up and separate themselves from that type of thing, because then it leads to the credibility problem, and we need credibility because the NGOs are possibly the people best positioned to bring peace to Iraq. One of the reasons there is so much attack on the NGOs is because of their effectiveness. The rebels do not want them to get on the ground and succeed.
Senator Day: A story appeared in our local media within the last week, and you might have picked that up as well. This was in Sri Lanka. It was a government in Colombo that was demanding import duties on a number of vans, trucks and all-wheel-drive vehicles that an NGO from Great Britain wanted in. They have been sitting on the dock for some time. The NGO had to pay $1 million to the government in order to release those vehicles. That $1 million U.S. was just the import duty. What does that do for the credibility of an NGO and the credibility of activities? This was the legitimate government in Colombo.
Let us suppose it happened to have been in another part of Sri Lanka where the Tamil Tiger (LTTE) is in power and there is extra money being given to the governing group, money that presumably was raised through a registered charity where the public is matching funds and where the public is giving some relief to the donors. What does that do for this whole credibility situation, and how can we follow your suggestion of doing away with the anti-terrorism aspects of this money flowing internationally? Somebody has to keep an eye on this.
Mr. Bromley: Someone has to keep an eye on it, but part of the problem is that the people who will need the relief from those trucks are not the people who are collecting the tariffs, so you have governments doing that through fairly large import fees in many parts in Africa. How much foreign aid goes into the bank account in Switzerland of some dictator? These are not new problems.
My experience is that the NGOs on the ground have the most experience in effectively reducing these problems and finding the balance between the pragmatic realities. Not only terrorist groups do that. These are corrupt dictators, and these are people who are looking to benefit.
People use this legislation for whatever agenda is going down where they are. In Africa, of all the countries in the Botswana consultation, the only one that was a member of the Financial Action Task Force was South Africa. Many of the government representatives — ministers of finance and senior people — did not even know what FATF was. Within two days of meetings, they could figure out how this anti-terrorism legislation, and the money-laundering aspects of it, would give them control of the inflow of monies to international NGOs.
To unload on charities as the only people who are not able to negotiate their way blamelessly throughout these difficult circumstances is problematic. However, that is the politics, not necessarily in this country but globally, of this legislation. That is why I keep coming back to let us talk about the public discourse surrounding it rather than the ``for instances.''
Senator Day: I have one more area of questioning, and that goes back to Mr. Broder. Do you have any statistics in terms of money that is raised in Canada? How much goes internationally and how much stays within Canada of the receipted dollars? Could you give us a rough figure on that?
Mr. Broder: We would not have that particular data, but an organization like the Canadian Council for International Cooperation may have specific amounts.
Senator Day: It was interesting that a number of my colleagues raised issues with respect to the international aspects of charitable organizations. I guess that flows from the type of legislation we are reviewing.
I think that the general theme of the first part of your presentation was that the Income Tax Act and provisions were sufficient to deal with this issue and we did not really need the anti-terrorism legislation. I am wondering if you have done any thinking about whether the anti-terrorism legislation could apply to foreign activities, with the current legal system being sufficient for Canadian activities. Have you drawn any division between those two groups in your submission?
Mr. Broder: The general requirement under the Income Tax Act is that charities have to spend their resources on exclusively charitable activity. The way the Canada Revenue Agency interprets that with respect to foreign activity is different from the way it interprets that domestically. It would typically require, for example, an agency agreement or the charity to have a Canadian on the ground in the country in which it is operating. There is a higher expectation in terms of reporting requirements. You have to be able to repatriate the receipts if requested by CRA.
CRA makes quite a distinction. In situations like those you were talking about, with the $1 million going to pay the duty on the trucks or where some of the money got diverted to pay a local group to allow the resources in, you could be looking at those transactions and asking, ``Is the organization still devoting all of its resources to charitable activities?'' That is a standard requirement for all charities under the Income Tax Act, even leaving aside part 6.
Senator Day: Are you content to leave your recommendation that the government should be asked to clearly and publicly demonstrate that the standards and powers under the Income Tax Act are not sufficient and that they should apply to all registered charities, in your view, based in Canada?
Mr. Broder: Yes, but they should be narrowed. Where that cannot be clearly and demonstrably shown, the provisions should be narrowed so they are less arbitrary and there are not the abrogated procedural safeguards and the absolute liability.
The legislation should be recast in order to capture some of the nuances we discussed this afternoon.
Senator Day: Rather than put this back to the government to clearly demonstrate the need for the legislation, am I correct in understanding you to say that it is your view that the legislation was not necessary and that the provisions in the Income Tax Act were sufficient to meet our obligations internationally under the United Nations Security Council resolution requiring us to avoid allowing funds to flow from Canada to sponsor international terrorism?
Mr. Broder: CRA indicated on May 18 that they have not used the part 6 provisions against any charities or organizations seeking charitable status. We are not in a position to answer because we are not privileged to all the government information. I think it raises that question.
Senator Day: Apart from that non-use? We are here to make recommendations to the government, and one of the recommendations would not be for the government to please demonstrate that it needs this. We would rather say, as I understood your submission, there were sufficient safeguards and legislation in place prior to the Anti-terrorism Act with respect to charities and charitable organization activities.
Mr. Broder: There is the provision under the Income Tax Act to devote your resources exclusively to charitable activities. There are also the part 1 provisions around the money laundering and the terrorism financing, the Criminal Code provisions. That may be sufficient.
There may be some instances where there has been some efficacy to part 6 that we are not aware of. It appears that there has not been the use of part 6 and that there is opportunity, within the existing regulatory regime and the Criminal Code provisions around financing, to deal with most, if not all, of the harm that is apparently out there.
Senator Day: Has your organization done any analysis as to our requirements under Resolution 1373, which we discussed here this morning? Have you done any analysis?
Mr. Broder: No, we have not.
Senator Day: Thank you. Mr. Bromley?
Mr. Bromley: I have a somewhat different answer to that question, if I understood it.
A great deal of my work is jurisdiction shopping, in terms of why a donor may want to do his giving out of Hong Kong versus Bermuda or somewhere else. It is my considered opinion, regrettably, that if I were jurisdiction shopping for charitable funding, I would go to Canada. I think our rules and the structure of our legislation is very problematic: The notion that the charity carries on the charitable activities itself and all of the emphasis that charities direct through their publications and policies and the legislation bring on agency agreements, et cetera, which he referred to. It means if I appointed Osama bin Laden as my agent in Pakistan, there would be absolutely no reason for me to involve any regulatory authorities in Pakistan in how I was handling any of my money movements. Unless they will pick it up in Ottawa, they will not pick it up on the ground in Pakistan. If I had to decide who I thought had a better chance of getting the bad guys, I might want the guys in Pakistan to have a role.
Senator Day: Have you an opinion with respect to sections 4 and 6 of the Charities Registration (Securities Information) Act? Are they desirable and necessary?
Mr. Bromley: I have not spent as much time looking at that because from my experience I would say that those who were really into this would have either stayed outside the charitable registration field or, as soon as they got anywhere close to that, would have discontinued and moved sideways.
While CRA may have never issued a certificate, I would be surprised if they have not discovered a few things in their process. However, I do not know that. I am not someone they consult.
Senator Day: With respect to your comment about staying outside of the registered charity side of things, do you have an opinion on how much of an incentive the tax receipt is to funding for international NGOs?
Mr. Bromley: I understand that, ironically, it is a large incentive for the small donor, because they get the tax credit at the highest level. If they can set up welfare or other schemes through which donations end up in the hands of bad people, they are still ahead.
In the field of the large donor, you would remove yourself by several levels of charitable organizations between where the donation was made and when the money got overseas, which would not be problematic if you have any sophistication.
If you move away from charitable donations to income generation on a tax-exempt basis in an NPO, you would be substantially home free.
Senator Joyal: Have you noticed a similar impact as to what you referenced in your last answer, that being a sort of racial profiling in terms of targeting groups that could be the object of anti-terrorism legislation? Could they experience a reduction in their capacity to raise money for humanitarian purposes as a result of a chilling effect because their charities might be the object of further evaluation or further investigation?
Mr. Bromley: I have no evidence of that, but that is largely because I do not represent that many donors in these communities at the foundation level. My retainers are more often with multimillion-dollar transactions than with the operations of smaller end charities, just because of where I am in the marketplace. I have no personal experience with that.
Senator Joyal: Can you comment on that, Mr. Broder, in terms of your professional experience?
Mr. Broder: With the increased transparency around the CRA registration processes and the financial data of organizations, we may be able to get some sense of that in the future, but historically we do not know with any certainty.
The Chairman: Thank you very much. This has been a very interesting session for all of us. We are pleased that you appeared before us today and added to the information we are gathering.
The committee adjourned.