THE STANDING SENATE COMMITTEE ON NATIONAL FINANCE
EVIDENCE
OTTAWA, Tuesday, November 5, 2024
The Standing Senate Committee on National Finance met with videoconference this day at 9 a.m. [ET] to study Bill S-279, An Act to amend the Income Tax Act (data on registered charities).
Senator Claude Carignan (Chair) in the chair.
[Translation]
The Chair: Good morning, everyone. Welcome, honourable senators.
[English]
Before we begin, I would like to ask all senators and other in-person participants to consult the cards on the table for guidelines to prevent audio feedback incidents. Please make sure that you keep your earpiece away from all microphones at all times. When you are not using your earpiece, place it face down on the sticker placed on the table for this purpose. Thank you all for your cooperation.
I wish to welcome all of the senators, as well as the viewers across the country who are watching us on sencanada.ca.
[Translation]
My name is Claude Carignan. I’m a senator from Quebec and the chair of the Standing Senate Committee on National Finance. I would now like to ask my colleagues to introduce themselves, starting from my left.
Senator Forest: Good morning. Éric Forest, Gulf division, Quebec.
Senator Galvez: Rosa Galvez from Quebec.
Senator Dalphond: Pierre Dalphond, De Lorimier division, Quebec.
Senator Loffreda: Good morning. Tony Loffreda from Quebec.
[English]
Senator Senior: Paulette Senior, Ontario.
Senator Pate: Kim Pate, and I live here in the unceded, unsurrendered territory of the Algonquin Anishinaabe. Happy birthday, Senator Omidvar.
Senator MacAdam: Jane MacAdam, Prince Edward Island.
Senator Ross: Good morning. Krista Ross, New Brunswick.
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
Senator Smith: Senator Larry Smith, Saurel, Quebec.
[Translation]
The Chair: Thank you. Honourable senators, we’re continuing our study of Bill S-279, An Act to amend the Income Tax Act (data on registered charities), which was referred to this committee on May 30, 2024, by the Senate of Canada.
We’re pleased to welcome today the Honourable Ratna Omidvar. As Senator Pate said, she’s a year younger, you can tell. We wish you a happy birthday. Thank you for accepting our invitation, on this momentous day, to have breakfast with us. We’ll give you 5 to 10 minutes for your opening remarks, and then we’ll have questions and answers. The floor is yours, senator.
[English]
Hon. Ratna Omidvar, former senator, sponsor of the bill: Thank you, Senator Carignan and members of the committee. I must say, it’s a birthday gift of a different kind to get up and appear before a committee, but this bill is very close to my heart, and therefore, I am really pleased to appear before you.
Thank you for allowing me to speak to you today on Bill S-279, which will amend the Income Tax Act by gathering data on registered charities.
I have not thought up this bill on my own. It actually stems from the eighth recommendation of the report from the Special Senate Committee on the Charitable Sector titled Catalyst for Change: A Roadmap to a Stronger Charitable Sector. You will recall that this committee was brought to life by former senator Terry Mercer. I was privileged to serve as deputy chair alongside Senator Yonah Martin.
Bill S-279 is a straightforward, pragmatic measure that supports our aspirations on antiracism, diversity and inclusion by focusing on the charitable sector. As I have pointed out time and time again in the chamber to you, colleagues, the charitable sector is a vital part of our society. It employs 2.5 million people and contributes 8.2% of our GDP. Yet it suffers from a lack of systematic data collection on its governance in one aspect. It suffers from a lack of systemic data collection on the whole, but right now, we are focusing on governance. One of the particular challenges is that we lack data on the sector’s workforce and its leadership, and lack of data hampers effective policy making because, as we have said time and time again, good policy making is based not on anecdotes but on evidence.
Bill S-279 proposes a modest yet essential step to fill this evidence gap by focusing on the governance of Canada’s 85,000 charities. Each of these charities has a board of directors responsible for setting missions, determining policies, overseeing hiring policies, investment policies, et cetera, et cetera, and they are responsible for ensuring regulatory compliance, so their decisions significantly affect Canadians. If you assume that there are 10 to 12 directors for every charity — my math may not be precise, and yours is likely better — we are looking at roughly 1 million Canadians in governance roles across Canada. We don’t know yet, though, who they are. Do they represent the diversity of the community they serve? This lack of data means that while charities often espouse diversity in principle, the actual practice may fall short. In 2019, the Charities Committee report underscored the sector’s extensive reach and highlighted the need for diversity data to measure progress in inclusion.
The corporate sector, in comparison, is governed by legislation that was approved in the Senate in 2018, Bill C-25, which was the Canada Business Corporations Act. It required federally incorporated distributing corporations to report annually on the demographic diversity of their boards. In addition, the Canada Business Corporations Act requires such corporations to table a diversity plan. It has created a framework, in a way, for monitoring and advancing diversity in corporate board rooms. However, there is no equivalent requirement for the charitable sector, which means that while diversity is a goal, there is actually no data or evidence to track progress.
To address this gap, in 2020, I wrote an open letter to the charitable sector to collect its own diversity data. Statistics Canada responded and conducted a voluntary survey with 8,835 participants, including 6,170 directors. This was the first focused attempt to understand diversity within charitable governance. It revealed some representations. As expected, gender does really well, but it showed significant under-representation of other equity-seeking groups, such as racialized individuals, Indigenous peoples, immigrants and people with disabilities.
While the survey was valuable, it was limited in scope because it was voluntary, it doesn’t stand up to a robust data —
The Chair: Just a moment please, Senator Omidvar. We lost the translation.
Ms. Omidvar: Okay.
The Chair: We have fixed the issue. Please continue.
Ms. Omidvar: The survey that was done by Statistics Canada was a snapshot, but it does not represent a full picture of the sector because it was voluntary and crowdsourced. It’s not statistically significant.
To establish a robust data collection, Bill S-279 proposes a simple solution: adding a question on governance diversity to the T3010 forms that charities are required to file annually with the Canada Revenue Agency. This legislative change would grant the necessary authority within the Income Tax Act for such data collection.
The proposal builds upon employment equity principles to ensure standardized and comparable measurements, aligning with Canada’s established framework for workforce data collection. Like employment equity, colleagues — I want to underline this — this is not about quotas but about gathering evidence. Over the past 30 years, we can all see that collecting workforce data through employment equity legislation has transformed Canada’s labour market by fostering greater awareness, which could similarly drive change in the charitable sector.
Bill S-279 would allow annualized data collection in order to create a comprehensive view of demographics and diversity in governance across the sector. This data could identify trends and disparities, but, most importantly, this information would remain aggregated, preserving the confidentiality of individual organizations and directors.
This bill offers a practical approach to supporting our aspirations in governance diversity in the charitable sector. I hope for your support on this achievable and valuable step forward, and I look forward to your questions. Thank you.
The Chair: Thank you, Senator Omidvar. We will go to questions.
Senator Marshall: Welcome, Senator Omidvar. I hope you’re starting your first day of retirement on a happy note.
I have several questions. I’m sort of going in reverse here. I thought the coming-into-force parts at the end of the bill were somewhat ambitious. Say, for example, your bill goes through fairly quickly and receives Royal Assent by Christmas. It’s going to apply to the taxation year that begins after March 31. Do you think that will be enough time for organizations to put together the information that is required? I think you said in your opening remarks that there were about a million individuals in the governance structures. Is that correct? Also, in your bill, you use the term “like officials.” You talk about “. . . directors, trustees, officers or like officials . . .” Who would they be? I’m trying to bring all that together to determine whether the timeframes outlined with regard to clauses 5 and 6 are realistic.
Ms. Omidvar: Thank you, Senator Marshall. Excellent questions, as always.
I believe the timeframe is doable because the T3010 already exists and because the definitions we are using are defined in employment equity legislation. It’s adding another question to a form that is already required to be filled in by all charities.
In terms of the language around “director, trustee, officer or like official,” I think we have lifted that from the current income tax code, because that’s what is used. If I’m wrong, I am sure your other witnesses can point that out.
Senator Marshall: I think you said a million individuals would be in the governance structure that you’re interested in. Is that the right number, or did I mishear you?
Ms. Omidvar: It’s an assumption, Senator Marshall. There are 85,000 charities in Canada. They would normally, in my experience, have between 10 and 12 directors. If I add that up, with my math, I come to 1 million. Of course, that doesn’t include people like me who sit on two boards. It’s a million different directors on 85,000 charities.
Senator Marshall: Okay, I have it.
When you talk about revoking charitable status if the information is not provided, why did it go to revoking charitable status? Why wouldn’t there be a fine initially? Why wouldn’t there be something like a staged punishment?
Ms. Omidvar: Revocation by the CRA of charities follows a staged progress. It’s called an administrative letter. So whilst I am using revocation, there is an established process within the CRA. No charities revoke willy-nilly. The CRA doesn’t do that. In fact, revocation often, in my experience, results after three or four years of negotiations and improvements in terms of non-compliance, et cetera. It’s a serious step. But the administrative procedure of that step is not immediate.
Senator Marshall: Thank you very much. I will go on a second round, please. I have some more questions.
[Translation]
Senator Forest: Thank you, senator, for sponsoring this key bill. We wish you all the best on your birthday.
My first question concerns the fact that — as you said — Statistics Canada conducted a voluntary survey that measured more than four criteria, including age. In this bill, why stop at just the four criteria identified?
[English]
Ms. Omidvar: Employment equity legislation designates four groups that are to be measured, as far as I know. Senator Forest, I don’t know about the age, but it measures participation in the workforce by women, members of disability groups, Indigenous groups and racialized minorities. Does that answer your question, Senator Forest?
[Translation]
Senator Forest: Yes. Basically, the shared goal — and this bill would contribute to it — is to increase efficiency with regard to the clients of these organizations. Our charities play an extremely important role in improving the situation of various vulnerable client groups. Can you show us how having a better idea of who runs these organizations can help increase the efficiency of Canada’s charities?
[English]
Ms. Omidvar: I would say it will help us understand whether the directors, officers and trustees of Canada’s charities are reflective of the diversity of the country, regions, communities and the sector. It is important to know this. Senator Forest, you likely sit on a board — I certainly do — of a charitable organization. Boards make incredibly important decisions. They set the mission. They are the ambassadors. They set investment policies and HR policies. They hire and fire people. They manage investment accounts that the charities may have. So it is important to know who these people are so that we get a picture of governance in this country. We already have a picture of corporate governance in this country, and I think it is time for us to put charities on the same path.
[Translation]
Senator Forest: Thank you.
[English]
Senator Smith: Happy birthday, senator. You look as young as ever.
Ms. Omidvar: Thank you.
Senator Smith: One of the concerns raised, for example, from smaller charitable organizations is that they often struggle to recruit board members, and, therefore, failure to complete the requirements set out in this bill could impact their charitable status. Could you provide some insight into this issue? Is this something you considered when drafting the bill? Is it a valid concern?
Ms. Omidvar: There is no requirement to do anything beyond report. There is no punishment for failure of anything but reporting, Senator Smith. That’s all we are asking. This is not about quotas. This is not about saying that they must meet the employment equity designation as per their representation in the country or the labour force. All they are required to do is to report. There is no risk of any charity losing its charitable status for anything except non-compliance on reporting. Even that, as I explained to Senator Marshall, is a very long road.
Also, we should remember that, even though we have 85,000 charities, many of them are members of large sector organizations like Community Foundations of Canada, Imagine Canada, the Boys and Girls Clubs of Canada, which is an umbrella organization for all the boys and girls clubs. All these umbrella organizations will be supporting the charities in completing this additional step in their filing.
Senator Smith: Following up, could a more targeted approach, focusing on larger foundations or organizations, be more effective in achieving the bill’s goals without overwhelming smaller charities? Is this a case of big versus small? Is that a factor?
Ms. Omidvar: There are 85,000 charities in Canada. This is one question. I recognize that Form T3010 is a complicated form to fill out. I have worked in charities, and I have experience on this. Most charities have an accountant who does their audited financial statements and who fills out these forms for them. Most charities will provide this information to their accountant, based on the information they collect.
I do not believe that small charities will be overly hampered, especially if they are supported by capacity-building efforts in the sector by the sector organizations. I think that has to be part of the deal here. We have to communicate clearly, if the bill comes into law, that this is about collection of data, not quotas. There is no fear for anything. We have to do that part.
Senator Smith: In your second reading speech, you highlighted the issue of “snow capping” in charitable organizations where diversity in lower roles does not translate to diversity in leadership positions. How do you see Bill S-279 addressing this issue substantially beyond just reporting, which is how the bill is currently worded? Are there specific accountability measures you would like to see implemented alongside in this bill?
Ms. Omidvar: You’re perfectly right in recalling my observation about “snow capping.” I believe very firmly that the sector is on side on diversity goals. It simply doesn’t have the evidence. Once the evidence is there and an aggregate picture of governance diversity in the country is tabled by the minister, I believe charities will do what is correct and, with their own impetus and their own governance, will do what they feel is the correct thing to do based on their mission, their region and their community. Canada is a large country. There are charities in small towns and big towns. One has to be cognizant of the diversity of our country.
I have not required a diversity plan to be tabled, for that very specific reason, Senator Smith. I want this bill to be incremental. I believe the charitable sector will do what is required. As I mentioned, the Canada Business Corporations Act went a step further and required a diversity plan. I do not believe that is necessary. You can question your witnesses in the other panels, but I believe very firmly that the sector will do the right thing after the data is available.
Senator Smith: Thank you.
Senator Galvez: Happy birthday, Senator Omidvar.
Senator Omidvar, congratulations. This bill that you have brought forward is a very elegant, simple way of bringing transparency to this important data that you are seeking to obtain. I have been also part of several NGOs and one for-profit organization board. Undoubtedly, having diverse boards can result in better decisions that represent the society and communities they serve.
I just want to have some clarification. I believe the goal of this bill is to increase transparency. As you said, corporate boards already declare this, so why not the charities sector. The idea is to make this data public. Ultimately, we want to promote some changes, and these changes will result from transparency. Who, according to you, will publish these results? Statistics Canada, the analytic polls or other NGOs that will tell us about the gaps in diversity in the charity boards?
Ms. Omidvar: Senator Galvez, thank you for that question; it’s an important one.
The minister is required to table a report every year, in June, of aggregated data. You’re an engineer. You know that when you have one set of data, you can look at it, you can analyze it and you can make some conclusions from it. I believe that is what will happen. Once the minister tables the report in both Houses of Parliament, the charities themselves will be able to see how well they measure up to national labour force participation data, regional data or even sectors. Data is like a pot of gold. You can look at it, analyze it, shine it and rub it, and it will always tell you a more detailed story based on how you look at it.
Senator Galvez: My colleague Senator Forest mentioned four criteria. Do you expect that, with time, this requested information will increase in order to obtain a better portrait, to achieve better transparency and to promote some needed changes needed in the sector?
Ms. Omidvar: Thank you, Senator Galvez; it’s an important question.
This legislation is linked to employment equity law. When the employment equity law changes — I think we all expect it to be changed and revised in the next couple of years — the section of this bill would reflect the changes in employment equity law as made by the Government of Canada.
Senator Loffreda: Welcome to our committee, Senator Omidvar, and happy birthday. Congratulations on such a remarkable legacy that you have left here at the Senate. Good luck with your future endeavours.
I do agree that those who own the data own the future, so data is important.
I would like to discuss further the revocation and the May 30 letter that members of the Federal Nonprofit Data Coalition issued. It was addressed to senators, MPs and ministers. Members of the coalition support the intent of Bill S-279, including Imagine Canada who will appear during our second panel. However, as they write, they do not believe charities should be at risk of losing their status because they failed to provide the relevant data as stipulated in clause 3 of the bill. The coalition is calling for the bill to be amended.
What are your thoughts on this proposal? Are you receptive to their views, or do you maintain that reporting must be mandatory? There could be consequences for failing to comply with the requirement. I remind everyone that the Income Tax Act stipulates that the minister may revoke registration. It is not automatic. You discussed the details of that.
It is an important point and an important letter that was addressed to senators, MPs and ministers. I wish to have your thoughts on that.
Ms. Omidvar: Thank you, Senator Loffreda.
My aspiration was to give this bill some teeth. As you may know, the Canada Business Corporations Act, with the Bill C-25 revision that we approved in 2018, has no teeth. While some corporations report, others report flimsily or partially, and the picture is not very compelling in terms of gathering data. To ensure that we get compliance on the data requirements, I inserted this issue of revocation which, as I said, is a last, final step. However, Senator Loffreda, we are in committee hearings. If the sector believes that it should be more precisely spelled out that administrative steps should be taken to deal with non-compliance, of course, I would be open to that, as I hope would the committee.
Senator Loffreda: Thank you for that response.
Another question: I reviewed the findings of the Special Senate Committee’s electronic consultation exercise. As you may recall, Question 9 in the survey dealt with governance-related challenges. It asked respondents to indicate how concerning four different governance-related challenges were for their organization. Only 18% of respondents surveyed said that ensuring diversity among board members and senior staff is very concerning. How concerning is it to you that only 18% of respondents are worried about the diversity of their boards and senior staff? That is a low number. Do you think the result is attributed to the lack of awareness? Do Canadian charities need to be reminded of the business case for diversity and the associated benefits and advantages? We both know. I sat on 21 boards before being nominated to the Senate. I believe in diversity, but I am surprised by that result.
Ms. Omidvar: I was surprised by it, too. During witness testimony at the Senate Charities Committee, in comparison to the 18%, we heard that there were concerns about diversity in the charitable sector, which is why the recommendation made its way into the report.
Part of that lack of awareness may come from a sense that it’s not important or it’s not necessary. It may come from the charity’s location. It may come from ethno-specific groups who have no concern partially about representation. The Senate Charities Committee used that question as a jumping-off point but not as evidence.
Senator Loffreda: Thank you.
Senator MacAdam: It’s nice to see you again, Senator Omidvar. Happy birthday. Thank you for being with us today.
I was reading the government’s response in 2021 to the report of the Special Senate Committee on the Charitable Sector, specifically their response to Recommendation 8, upon which, as you said in your speech at second reading, Bill S-279 is based. It states that while the government supported the recommendation, the former minister mentions the role of the ACCS, the Advisory Committee on the Charitable Sector, which I understand is a consultative forum for the Government of Canada to engage in meaningful dialogue with the charitable sector. The government’s response states that it will ask ACCS to consider conducting further study on this issue, and if ACCS decides to examine the issue, the Canada Revenue Agency will review and consider any resulting recommendations.
Do you know if further study or review occurred? What recommendations or key takeaways may have come out of that process?
Ms. Omidvar: Thank you.
You are hearing later on from Bruce MacDonald who was on the first version of the ACCS. We had a meeting with the CRA. The advisory committee advises; it doesn’t make the law. In fact, the CRA doesn’t make the law. It is the Minister of Finance who makes the law.
It had been my hope that I could just go to the minister for CRA and that we could, through regulations, add another question to the T3010, but that is, in fact, not possible. The Income Tax Act needs to be changed in order to add a question of this kind to the T3010.
I don’t know their recommendations on diversity in the sector. They have reconstituted after a two-year hiatus. Perhaps you would ask Mr. MacDonald that question.
Senator MacAdam: Thank you.
Ms. Omidvar: Senator MacAdam, I should also say they make recommendations. Those recommendations are not necessarily followed. The law becomes the law for everyone.
Senator MacAdam: I wonder about the administrative burden on the charities to fulfill these new reporting requirements. Do you have any information on that or anything that you could share?
Ms. Omidvar: I have heard from charities, especially from some smaller charities, that this would add to their burden. The T3010 is not a simple form to fill out, but it does add one question, and the question goes like this, as I’m imagining it: How many directors do you have? Number of directors gets filled in. How many fit the definition of employment equity designated groups? There would be four boxes. That’s what they would have to do.
Of course, there are directors, officers and trustees who may choose not to self-disclose. That is privacy law. The charity can only disclose the response it gets from the director. That would be the question.
I submit to you that, with support from the sector organizations like Imagine Canada, Community Foundations of Canada and Philanthropic Foundations Canada, that enough capacity could be built so that no extraordinary amount of burden would be added to the charitable sector.
The charitable sector, when they talked to us, have been at the forefront of aspirations on diversity and inclusion. I am part of the community. I read the blogs. I read the newsletters. They have been extremely concerned about charitable funding to Indigenous and Black organizations, regardless of where they are in Canada. It is their aspiration. I think this is their way of walking the talk.
Senator MacAdam: Thank you.
[Translation]
Senator Dalphond: Happy birthday, dear colleague. It’s just one more day, but a day that we’re starting to miss you.
My question concerns the data. The proposal is for an annual report by the minister, tabled in both houses, that provides raw data on the number of trustees, directors and officers of foundations across the country. The risk with statistics is that the broader and more general their scope, the less information they provide and the more they can hide. I was wondering whether the data should be released in a more regional form, for example, by territory or province. This would show whether some regions are making more progress and others less progress, while preserving the desired anonymity. What are your thoughts on this?
[English]
Ms. Omidvar: I think it is perfectly possible that, once national aggregated data is available, it can be further disaggregated by region, by sector and by mission, whatever you may call it. That is certainly going to be possible, I hope, Senator Dalphond.
Senator Dalphond: Since it is an “S” bill, if we are doing an amendment, that is something that you would not be opposed to, I understand.
Ms. Omidvar: No, I would not be opposed to it.
Senator Dalphond: Thank you.
You have also referred to no diversity plan, contrary to the CBCA, so should we also ask the question: Do you have a diversity plan? Just a question, not make it compulsory, but in the response from these organizations, that they also provide data about the existence, or not, of a diversity plan?
Ms. Omidvar: I don’t believe that requiring charities to table a diversity plan would be a good amendment or a good requirement in this bill. As I said, the sector is already in aspiration on the side of diversity. It needs the evidence to make sure that the aspirations are followed by policy.
I think it would also add an extraordinary burden to charities. Remember, unlike corporations, charities do not have HR departments. They do not have people who are responsible just for compliance with the government. I believe that would be a super onerous step and I would highly recommend against it.
Also I should ask, Senator Dalphond, you likely know this: What good do these diversity plans do in the CBCA? They are put on a shelf and never looked at.
Senator Dalphond: Thank you.
Senator Kingston: Happy birthday, Senator Omidvar. I am glad to see you again this week. It is good.
I will ask a question based on some information we received created by Imagine Canada. New Brunswick was pulled out of that, so it was of particular interest to me. In terms of the disaggregation of data, not all charities — and I will put that in quotation marks — are created equal. Imagine Canada points out that there are community non-profits, business non-profits and government non-profits. I am wondering if you are concerned or if the sector is concerned about the differences between the types of charities, if you will, in terms of their ability or their aspiration to create the diverse environment that we need.
Ms. Omidvar: This bill only applies to registered charities who have been registered by the Government of Canada, who have the privilege — an extraordinary privilege, I should add — of receipting gifts given to them by individuals which can be applied against their taxes. It does not apply to not-for-profits. It does not apply to social purpose organizations or any other organizations — only to the 85,000 registered charities.
Senator Kingston: Universities, for instance, have charitable status and, therefore, they are in a different category, in my mind, in terms of capacity to do some things than the smaller charities would be. What would your comments be on that?
Ms. Omidvar: Universities are charities, so they would have to report out if this bill comes to law.
Your question relates in some sense to the question Senator Dalphond had. National data could be disaggregated. For example, Universities Canada may want to take a look at the governance of the universities and colleges in Canada. It is not a small pool, but it is not a huge pool either.
I have to also insist that in no case should confidentiality be impinged. This is not about naming and shaming. It is about gathering evidence. If the disaggregation is done responsibly, and I imagine CRA would have a role in how it is disaggregated or what data is provided for further analysis, I hope that kind of disaggregation leads to wisdom and from wisdom to action.
Senator Kingston: Thank you.
Senator Ross: Good morning, and let me add my birthday wishes to all the others you have received today. It’s great to see you this morning.
When I was previously employed with the Fredericton Chamber of Commerce, we were a founding member of the 50-30 Challenge. As of this week, there are nearly 3,000 organizations that have signed on to this challenge, which is positive but not a huge number. Do you believe that, although this is only a reporting and data collection, that the next steps will be quota and goals such as those espoused by the 50-30 Challenge? Is your ultimate hope that the regulation of composition and board structure will happen?
Ms. Omidvar: Senator Ross, it is lovely to see you too. Thank you to all of you for the warm birthday greetings.
I hate the word “quotas.” This is not about quotas. If anything, it may lead to charities setting themselves a target and moving towards that target over timelines. It may lead to charities adjusting their policies — for instance, whether or not they have a nominations committee., or they may want to take a look at term limits. The guts and glory of who gets appointed lie in the governance policies of those organizations. The sector may choose itself to set a challenge, 50-30, whatever it may be, and move itself along that line, but the bill does not.
Senator Ross: As a follow-up, yes, I agree, the 50/30 Challenge is definitely aspirational. I found in our organization that it actually did change the behaviour of our nominating committee and the goals of our nominating committee. It changed the composition of our board quite drastically I might add. Even though that is not the purpose of this bill, I would ask if it is your hope that that is what it will eventually accomplish.
Ms. Omidvar: Yes.
Senator Ross: Peter Drucker said, “If you can’t measure it, you can’t improve it.”
Ms. Omidvar: You said it, senator. You are absolutely right. That is my aspiration.
Senator Ross: Thank you very much.
Senator Pate: Thank you for drawing attention to this, Senator Omidvar, as just one facet of your important work here in the Senate.
I’d like to pull us to a slightly different part of this, given that this is aspirational. Prior to being in the Senate, most of my working life, as you know, was also in the charitable sector and with organizations that aspired to not just “snow capping,” in the way that you have described it, but also have more women involved and have more diversity writ large.
Friday, I was meeting with an organization that is struggling to attract folks to the work that they are doing. Small organizations are often serving groups that are not always the most popular, not big groups like Imagine Canada or other large charities but some of the smaller ones who are actually working hard to try to diversity and are using creative ways but do not have the resources to bring in the folks who they want to have on their board as part of their governance. Some are using things like advisory bodies. Some are occasionally hiring individuals, if they have funds, but often, they are limited by their scope and their lack of resources. I do not know if you have any comments on that or how you would see this type of measure assisting those smaller organizations in particular.
Ms. Omidvar: You are absolutely right. Sometimes the will is there, but it is hard to find people. I admit that.
Many years ago, in the city of Toronto, I launched an initiative where we gathered the names of qualified candidates from visible minorities and other employment-seeking groups. We had a website. Boards would apply. There would be some kind of a board-matching process. I am not sure that initiative exists, but exists in Toronto in a different way, led by a different institution. It could well be that from this initiative, there is a national database that is structured along these lines. That would be a program initiative. That would not be legislation, of course. I can imagine that A will equal to B will equal to C.
You raise a good point. There are many charities that struggle to find qualified directors and struggle to find qualified directors from designated groups. There must be ways. We must find these ways to locate them and make the match.
Senator Pate: Thank you.
Senator Senior: Thank you, Senator Omidvar, for being a champion of the sector, from which I also hail, for so long. Of course, I also extend my warm birthday greetings to you.
As someone who has sat on many boards, chaired some and led some as a staff member, this has also been a true passion of mine in terms of diversifying not only the organizations I worked within but also the sector I served in. Some of them, despite my presence, also had the sort of “white capped” effect, if you will. I would say that I have had moments of disappointment and possibly even shed a few tears in my efforts to diversify some of these organizations, some of them being national, some being federations, but also working within member kinds of organizations. I know the struggle well. I see Bill S-279 as a gentle way of helping organizations who aspire to diversify their leadership.
Thinking of Senator Pate’s question around how to help organizations, I’ve found sometimes it is a slight twist in how we look for people to sit on our boards. Instead of elbowing a friend to say, “Will you come to sit on my board?” perhaps it is sourcing from the very people we serve. The effect has been that we serve diverse populations, but we do not necessarily see them as a source to attract board members. Could you speak to that in terms of organizations thinking differently about how they can actually diversify their leadership?
Ms. Omidvar: Thank you, Senator Senior. There is no doubt in my mind that you will be a terrific champion for the sector in your significant tenure in the future.
I think you are talking about lived experience. I believe it is important to bring lived experience into the boardroom and into governance decisions,but that is really a function of the maturity of a board. I cannot capture that in this legislation. I can only capture employment equity designations in this legislation.
When the data is available and people start thinking about these things, digging deeper and informing themselves, they may well come to the conclusion that if they are a youth-serving organization, for goodness’ sake, they need to have young people on the board, or if they are an organization serving single mothers, I think it is pretty natural that you would want to have single mothers on the board. Some of these conclusions have been made already. I know many boards who have that as a policy, but I think there are many more who do not.
Again, after the data is available, it will lead to a reflection on governance policies, and hopefully, Senator Senior, people like you will travel the country talking about the kinds of changes in governance policies that need to be made in order to have a board that is reflective of the community and the people they serve.
Senator Senior: Thank you.
[Translation]
The Chair: Thank you, Ms. Omidvar.
I have a question that you already answered in part. What’s the next step? I gather that you’re focusing on policies, non-coercive elements and incentives using the information provided.
However, I’m trying to think, because I’ve served in a number of different types of foundations in my area. I’m thinking of — pardon the expression — my gang from the Knights of Columbus, an all-male organization recognized as a charity. They’ll see this practice and worry about whether they’ll need to expand or whether they’ll lose their charitable registration number. I have a feeling that they’ll see the whole thing as a slippery slope.
Could you comment on this for my friends, the Knights of Columbus?
[English]
Ms. Omidvar: Thank you, Senator Carignan. The Knights of Columbus is, yes, a storied institution, indeed.
As I have said previously, and let me restate this in no uncertain terms: All you are required to do is provide the data. Your data, your organization’s name and your organization’s directors will never be disclosed to the public. It is part of gathering aggregated data.
The Knights of Columbus is a particular organization. I do not think there are any female knights. Maybe there should be. Maybe that is something you will think about. I do not know. I am not part of this club. I think it is pretty unusual in this day and age to have a men-only club. I could be wrong. But if this data moves the minds of the Knights of Columbus, you know what? They can call me, and maybe I will consider becoming a knight. I have no idea what that means.
I want to reassure you, Senator Carignan, that this is not a piece of legislation that charities should fear. There is no fear in this. The only requirement is to provide data about governors. That’s it.
[Translation]
The Chair: Good. Thank you. They may have to merge with the Daughters of Isabella.
[English]
I believe you have a question on second round, so go ahead.
Senator Marshall: Do we have time for questions?
The Chair: One minute.
Senator Marshall: Senator Omidvar, was there a consultation period? Did you take the draft legislation and run it by a select number of charities or put it out there for public consumption? Can you talk about that a little bit?
Ms. Omidvar: Yes, we did.
As I noted in the Senate, every individual piece of legislation I have launched has come in consultation with a brain trust. Many of the other witnesses you will see and hear from sat on the brain trust, including top charity lawyers. I have spoken at many events about this bill, on podcasts, in person and on webinars. I will continue to do so. The sector is very well aware. I would say those were useful consultations. They helped me understand a few things. But if this legislation is passed, the CRA will then launch its own consultations on regulations and development. That is another form of consultation. I should tell you that I have consulted with all the large sector organizations in the country.
Senator Marshall: Okay. And the response has been fairly positive, has it?
Ms. Omidvar: The response has been fairly positive. You can check it out yourself because they are appearing as witnesses.
Senator Marshall: Thank you.
[Translation]
The Chair: Thank you. We’ve come to the end of our remarks for the first hour, so we’ll suspend for a few minutes to welcome our next panel. Ms. Omidvar, you can choose to stay and follow our debates or to make the most of the day and celebrate. Goodbye and thank you.
[English]
Ms. Omidvar: Thank you, senators, for your time.
[Translation]
The Chair: We’re back with our second panel. Today, we’re pleased to welcome Andrew Chunilall, Chief Executive Officer of Community Foundations of Canada, and Bruce MacDonald, President and Chief Executive Officer of Imagine Canada.
Welcome and thank you for accepting our invitation to appear today. We’ll now hear opening remarks from Mr. Chunilall and then from Mr. MacDonald. Mr. Chunilall, you have the floor.
[English]
Andrew Chunilall, Chief Executive Officer, Community Foundations of Canada: Thank you and good morning, honourable senators. I have been a part of the Community Foundations of Canada movement for 11 years, originally as Vice-president of Finance for the London Community Foundation, and in my current role. Of course, I have been on multiple boards.
CFC is a national leadership organization of 207 individual local community foundations across the country. Today, Canada’s community foundation movement reaches well over 90% of Canadian communities and stewards more than $7.5 billion in collective assets, mostly in the form of permanent endowments. Together with these community foundations and a network of partners, which includes high net-worth donors, the federal, provincial and municipal governments, and corporate foundations, CFC helps drive local solutions for national change on issues that matter most to those respective communities.
For over 100 years, community foundations have been a point of connection to activate local leadership, subject matter expertise, community-driven data and financial capacity to strengthen community well-being in rural communities and urban centres alike from coast to coast to coast.
Since 2016, CFC has worked with the Government of Canada and local community foundations to deliver very large granting programs, addressing community priorities and putting over $260 million into local communities through over 10,000 projects that cover every province and territory in the country. Through each of these programs, CFC and community foundations have leveraged opportunities and additional resources. For example, through the Fund for Gender Equality, community foundations have shifted $110 million of their own investments to be gender-aligned and better support communities.
When I joined my first board 11 years ago, the people sitting around the table looked very different than they do today. The decisions that they were making were also different. We have already seen how radically different funding decisions and opportunities can look when boards look radically different. For example, I look toward my colleagues at the Foundation for Black Communities, or FFBC, and the Indigenous Peoples Resilience Fund, or IPRF. Both organizations have boards composed entirely of members from their respective communities and the community that they serve, ensuring that they truly understand local needs and remain accountable in support decisions. Receiving funding for community-driven organizations is just the first step in ensuring that every member gains access to essential resources. Having the diversity that reflects our communities and the ownership to make decisions is what brings us toward an equitable future.
FFBC and IPRF are just two examples of the many community organizations that are evolving and changing the makeup of their boards to ensure an equitable future. In fact, let’s look toward Canada’s top equitable funder’s list where community foundations represent less than 10% of the assets in foundations across Canada but more than 30% of the funders who make that list. We take equity seriously and are working toward a future where equitable allocation of resources is no longer a challenge: a future where boards across Canada are diverse. Diversity in boards across non-profits is important, but it is especially prudent for foundations. With capital comes accountability, and by changing how we direct funds, we’re also changing who benefits.
I’ll leave you with some data from my colleagues at Imagine Canada. In a recent study, they found that only 32% of non-profit organizations have audited their board composition. There is an enormous gap in our knowledge and understanding of the voices at the decision-making table and who receives funding. We are currently missing the data and the trends it could show us. However, we have a path forward. If we start gathering the data now, in 10 years we’ll know who is making decisions, and Canadians will know who is receiving equitable funding opportunities.
Thank you.
Bruce MacDonald, President and Chief Executive Officer, Imagine Canada: Honourable senators, thank you for the invitation to discuss this important piece of legislation.
I want to start by acknowledging that today I am joining you from the present-day territories of the Treaty 6, 7, and 8 First Nations as well as the Métis homeland. The lands and waters of Banff have been used for millennia by Indigenous peoples for sustenance, ceremony, trade and travel. We thank them for their continuous stewardship and for sharing the land with us.
Today, I am here in my capacity as President and CEO of Imagine Canada, a national charity with a mission to strengthen Canadian charities and non-profits so they can better serve individuals and communities both here and around the world. Imagine Canada is also a member of the Federal Nonprofit Data Coalition, a group of more than 40 non-profits advocating for better federal data collection on our sector.
Diversity in leadership in the non-profit sector matters because it means expanding the breadth of thought, expertise and experience, which are crucial for solving the complex social and environmental problems that non-profits tackle. We need to take new approaches to address entrenched problems at their roots. Additionally, for an organization to serve a particular community well, it needs deep knowledge and relationships. If an organization’s leadership lacks representation from the communities it serves, it’s at higher risk of making suboptimal decisions in terms of programming, relationships, strategy and more. A recent survey by the Charity Insights Canada Project, or CICP, showed that only 48% of charities feel that their leadership team fully or moderately reflects the diversity of the communities they serve.
In 2023, the Equitable Recovery Collective, which is a group comprised of about 15 organizations, released its equity benchmarking study, which broadly looked at equity in the non-profit sector. It highlighted a few major issues, including the fact that, while most non-profit leaders support equity, diversity and inclusion, far fewer pursue it with deep intentionality. Leadership support, staff buy-in and board engagement are the most frequently cited enablers of equity, diversity and inclusion, or EDI, practicesy. Organizations led by Black and Indigenous people, and those from other underrepresented groups, do more to advance EDI even though they serve some of the highest-need communities, experience increased expectations and face greater barriers.
For many years, there has been anecdotal evidence of a lack of diversity in the charitable sector’s governance but little reliable data to back that up. This is part of a larger data deficit facing our sector. Bill S-279 would address this gap by providing us with annual data on charity board diversity, allowing us to identify areas for improvement and track changes over time. Imagine Canada is supportive of this aim. Seventeen members of the Federal Nonprofit Data Coalition, including Imagine Canada, also signed a joint public statement in support of the bill’s intent. However, we do have some suggestions to improve the legislation and increase its chances of creating real change in our sector.
First, the legislation states that the CRA, can revoke an organization’s charitable status if it fails to report how many of its board directors belong to employment equity categories on their T3010 annual information return. However, it is already mandatory that charities submit T3010 returns. We feel that this measure is too harsh and that the CRA should take an educational approach if charities have filed their T3010s with this board diversity information missing or have improperly filled out this section. We would like to see the bill amended so that the consequences for not filling out this section are the same as they are for other sections of the T3010 tax form.
Second, this bill requires charities to collect and store sensitive, private demographic information. This is new for many charities and will require time and capacity to implement. While the reporting requirements contained in the bill might seem small, they are especially significant for the 55% of the sector who have no paid staff and are entirely run by volunteers. In order for this bill to have its intended impact, we must ensure that charities are able to responsibly and accurately collect, store and report on this data, as well as act on the insights gained to fill diversity gaps. In Imagine Canada’s pre-budget submission, we recommended that the government implement a capacity-building fund to improve equity, diversity and inclusion practices within non-profit organizations and allocate $30 million in funding to support this work.
Additionally, we believe that it would be valuable to have the federal government fund organizations that have expertise in diversity, equity and inclusion, such as the Canadian Race Relations Foundation, to do education and capacity-building work with the sector. These organizations could provide training and create resources to help charities conform to the requirements of this bill and improve the diversity of their leadership.
Third, there are some concerns in the sector about data privacy. The legislation forbids the CRA’s annual report on this data from identifying individuals or individual charities, but it doesn’t state under what other circumstances the data could be released — for example, court or audit proceedings — nor does it state how the data will be broken down in the annual report. We would like to see the CRA work with the non-profit and charitable sector to ensure that data privacy is protected.
Thank you again for the opportunity to comment on this bill, and I welcome any questions you might have.
The Chair: Thank you for your presentations.
Senator Marshall: Thank you, Mr. Chunilall and Mr. MacDonald, for your opening remarks.
There are two specific sections of the bill about which I am interested in hearing your opinions. The first one is the timeframe for charities to provide the information once the bill receives Royal Assent.
The second part of the bill that I’m interested in your views on is the portion that speaks about the revocation of charitable status. Mr. MacDonald, I notice you mentioned that in your opening remarks. I also thought that it was a severe penalty, but when former senator Omidvar was testifying, she indicated that there was a staged process at the Canada Revenue Agency before the actual status is revoked. However, it’s not embedded in the legislation.
I would appreciate both of your views on both the revoking of charitable status portion and also the part as to whether there will be sufficient time to provide the information being requested.
Mr. Chunilall: Our understanding is that any time there are these material changes to the filling out of the T3010, that CRA would be providing some level of guidance and education with respect to what they are looking for. We feel that with that level of consultation, learning and clarity around what the information is, that charities, in particular, foundations, will have appropriate time to complete that information. Many community foundations — I can’t say all — already track a lot of demographic information as it relates to the board composition, so this is really about taking that information and then categorizing it in the way that the T3010 will look for that information.
Senator Marshall: But the legislation is quite specific with regard to the timing deadline, so even though the Canada Revenue Agency may feel more generous with providing you more time, it’s the legislation that has the deadline in it. That would seem to me that it could be an area of concern. I don’t think you can count on the Canada Revenue Agency excusing people from the legislative deadline.
Mr. Chunilall: With respect to the type of questions the T3010 is asking for, as it pertains to larger and mid-sized charities, I do not see that there would be an issue, but for smaller charities, this could be a burdensome process because they have fewer resources and less capacity. So there isn’t one answer for the entire sector, but I can certainly see how this could disadvantage smaller institutions.
Senator Marshall: And the revoking the charitable status?
Mr. Chunilall: Yes. There is a staged process. We understand that if there is non-compliance or the reporting hasn’t been completed, the CRA does not simply revoke status without at least a few points of intervention. Again, asking for the information and the way it’s being asked for shouldn’t necessarily result in a punitive process in terms of the type of information that are being reported. It is simply that the information is reported. I don’t foresee that charities would face a significant risk of having their charitable status revoked, given that it is a staged process and that CRA will be working in consultation with the sector to ensure that the data being asked for is provided.
Senator Marshall: Mr. MacDonald, in case I run out of time, can you start off with the revocation of charitable status?
Mr. MacDonald: As I said, we would like to see this taken out for a few reasons. We think the education approach first is important to give time for organizations to be able to do this.
The other part is that there is no other part in the T3010 where it is specifically stated that there would be a revocation option if a line were not completed or completed improperly. Again, with the vast majority of organizations having this completed by volunteers, I think this is too harsh too quickly for the sector to really be able to manage well.
Senator Marshall: Thank you.
[Translation]
Senator Forest: Thank you for your opening remarks. The revocation aspect is quite significant. We know that our charities have key mandates to fulfill. They have roles and volunteers involved, and it isn’t always glamorous. Some roles require a great deal of investment. I find the revocation aspect a bit troubling. I gather that you would rather not have this requirement?
[English]
Mr. MacDonald: That is correct. Essentially, charities are required to complete their T3010. What we’re suggesting is that there should not be specific revocation provisions for one box or line on the T3010; this would become part of the regular requirements in reporting.
[Translation]
Senator Forest: Thank you. I think that the intent of the bill is commendable. I’m trying to determine what we’ll be asking of our organizations and the benefits for the clients of these organizations. When we look at our charities, they’re often quite sector-based. Take, for example, the Breakfast Club foundation, whose main goal is to give children the opportunity to reach their full potential by starting each school day with nutritious food. There are different activities. It can be a foundation for the cultural development of a region.
I don’t know whether this describes you at Imagine Canada. However, in our regions, we can see that many of these organizations have a specific and sector-based mission. It’s good to have diversity within these organizations. It’s also a bit complex, since it isn’t always easy to recruit.
Do you think that compiling this aggregated data will significantly benefit the clients of these organizations? Second, do you think that it will add quite a bit of red tape?
[English]
Mr. MacDonald: Is that directed to one of us in particular?
[Translation]
Senator Forest: The question is for anyone who wants to answer it.
[English]
Mr. MacDonald: In terms of your question around ultimate benefits to the client, I think the short answer is “yes.” As organizations create and determine programs to best serve the needs of their communities, as their communities change and evolve, so too must the organizations that seek to serve them. As we look at our sector, the leadership levels, which are the senior staff and the boards of directors — this is very much focused on those boards — need to evolve to ensure that they are relevant for the communities they are serving. They will make better decisions, they will be better informed and they will have greater engagement for volunteers and donors. It’s really with the sense of a state of ongoing evolution to ensure that the practices and programs keep pace with the changes going on in Canadian communities. For some organizations, having data with which to create questions to ask how they are doing as an organization compared to their colleagues or other parts of the country — it is really important for a board to ask questions and reflect.
I’ll pause there. Andrew, maybe you want to pick up on the red tape question and I’ll come back to it if there is time. From a relevancy perspective, having this data to invite that ongoing evolution is critically important.
Mr. Chunilall: Thank you, Bruce. I’ll build upon some of Bruce’s comments.
In 2020, there was a report that was issued to the sector. It was in collaboration with the Foundation for Black Communities at Carleton University. The report was called Unfunded: Black Communities Overlooked by Canadian Philanthropy. Basically, it was able to demonstrate through looking at all of the T3010s of all the foundations in Canada that the amount of support that was going from the philanthropic intermediaries to Black-serving, Black-led or Black-governed organizations was less than 0.01% of overall funding. Mark Blumberg, who is a charitable lawyer in Toronto, did a similar analysis except this time he took the T3010 data and tried to figure out how much money was going to support Indigenous communities. The result was effectively the same, so we know the fact that we sometimes lack diversity in our funding intermediaries has a tangible impact on where money goes. Both of those independent reports using T3010 data were able to identify that a disproportionately low amount of money goes in to support important communities in our country. We believe having diverse teams and diverse boards is a way to mitigate that issue and help direct funding in a more equitable manner.
Senator Smith: Mr. Chunilall, you noted that with capital comes accountability. In this bill, as Senator Omidvar noted, there is no punishment for anything other than not reporting, and no quota requirement and, therefore, no risk for losing charitable status unless they don’t report. What sorts of accountability measures do you think should be included alongside this bill to ensure that charitable organizations are working towards diversifying their boards?
Mr. Chunilall: I don’t feel that the bill should address the accountability. The important thing here is that we have information. The sector is always responsive to having good information and good data. If we can have access to that, the sector does have a way of ensuring accountability for itself. What I mean by that is if you have local organizations who have transparent information about what their boards look like, the communities will hold those organizations accountable. I do not think that the bill itself needs to have that sort of a policing effort.
Charities are public organizations. They will be informed by their community. People will step forward to say, “Hey, we have this information. We see that your boards look a particular way. They do not necessarily represent the diversity or composition of its community. We think you should make a change. We think you should address this issue.” In my experience, charities have been very responsive to that sort of invitation.
Senator Smith: Mr. MacDonald, could you give us some feedback?
Mr. MacDonald: Yes. Absolutely.
First, it is important to note that the very act of completing the T3010 is an act of accountability that all charities, every year, are required to do. It is part of having the tax privilege of being a registered charity. The accountability measure is built in by including this in the T3010.
What we think is unhelpful is including the revocation statement. There are already consequences for charities that do not complete their T3010. They have conversations with the regulator. I think it is important that the starting point for those conversations is around education and information. It goes back to this point that well over half of the organizations will have this completed by volunteers. It is going to take them time to figure out how to do this and do this well. The starting point for not getting it right shouldn’t be the loss of your charitable status. It should be, how do we help you ensure that this information is accurate?
Senator Smith: Thank you, gentlemen.
Senator Galvez: Thank you to our witnesses for their presence and answering our questions.
I want to clarify because I am a bit confused. The charity sector is protected. It pays less taxes under certain conditions. This bill tries to increase transparency, but transparency in a protected way because it is not asking for names and details. It is just asking for categories, as was described by the sponsor, Senator Omidvar. What this report asks is about categories. This information is already there, I think. There is no need for any calculations or studies because boards are known. Someone who calls the meetings knows who they are calling. They know the composition of the board. It is easy to provide information.
My questions are directed to Mr. MacDonald because he proposed three amendments. The first one relates to the time. Do they have enough time? The coming into force is only after two years, the second 31st of the year after Royal Assent. That gives them more than one year to collect this if they do not have it, which I doubt because they should have this information. For me, that doesn’t pose any problem. I do not think that this amendment is needed. Regarding your second amendment about money provided by the federal government in order to help these organizations, I do not know if you are aware, but we are senators, and our bills cannot ask for the government to spend money. If the government wants to do that after, that is up to them. I want you to react to the comments on your first and second amendments.
Mr. MacDonald: Sure. I’m happy to.
It is important to note that our comment on the first amendment is related to this revocation question. Our recommendation is to have the bill amended so the consequences for not filling out this one particular section are the same as they are for the other sections of the T3010 tax form. We are looking for consistency of approach from the Canada Revenue Agency if that box comes in empty or if it looks like it is not accurate. We don’t think that going straight to revocation is healthy for the relationship between the CRA and the sector, and it’s unhelpful in terms of organizations being supportive of this work.
The second amendment was to acknowledge the fact that so many of these organizations are small, and they are going to need support in order to do this work. Yes, there’s time. To be clear, the recommendation we have made is through our pre-budget submission. It is another pathway or channel for government to have additional funds to support organizations to do this type of capacity-building work. It is, in a sense, one of the chronic weaknesses for service-delivery-oriented organizations. Their administration is one of the things that is least appetizing for many funders. This is going to be some additional work, and it speaks to the other senator’s questions around red tape. It is additional work. Let’s name it as such. That does not mean that it is not important additional work. We have to recognize that charities will need time and support in order to do this well.
Senator Galvez: Thank you.
Senator Ross: My question follows up on that, and it’s for Mr. MacDonald. In your pre-budget submission, you suggested this capacity-building support. What do you think would happen if that support was not provided?
Mr. MacDonald: It is just going to be harder. We are asking organizations that may be unfamiliar with processes and that have not been collecting this type of information — let’s face it, these can be sensitive conversations with directors, asking to identify areas of race and other diversity characteristics. They are going to need support in order to do this well. The consequences of not having that additional, funded support means that, for many organizations, this will be a slower, perhaps a bit painful, process as they learn how to do this. Organizations have had to report on different information over the years. It just takes time for us to figure out how to do it. Where possible, knowing how small some of these organizations are, where we can provide pan-sectoral support for their ability to do it well, faster and better, it makes sense to accelerate both the process and accuracy and, therefore, the learnings that we can get from this. It is important to note this is about learning and relevancy. It is not about punitive measures.
Senator Ross: Mr. Chunilall, first of all, let me say that I do love the community foundation work. I was previously a director on the board of the Fredericton Community Foundation, so I really appreciate the work that the organizations are doing.
Could you give me a sense of your thoughts on how this might drive support to charities? For example, when investment funds are identified as green funds, it drives a certain type of investment and drives people to those organizations in a way to reward the good work they are doing. Do you have a sense that these boards that have a higher reflection of diversity will become more successful in terms of their fundraising?
Mr. Chunilall: Absolutely. I think there is a direct correlation between what a board looks like and where resources flow into communities. Every community is changing, as Bruce has mentioned. The challenge we have in our sector is that it is hard for our boards and teams to keep pace with those changes. There are always blind spots in terms of where the needs are in a community. There are many ways to deal with those blind spots in respect of the different parts of the community, how we engage with those different parts of the community and what we ask our teams to do.
But another layer is the governance approach. Oftentimes, teams are busy and they’re heads down. They are dealing with minimal resources. They are trying to maintain connections through all parts of the community. That board is that final level that says, “Hey, have you taken a look at this part of the community? I have been in touch with them. I have heard that there are some resources needed here. Maybe we should do some consultation and some engagement.” So the board does play a critical role. In many philanthropic intermediaries, the board is that last line of defence in terms of approving funding arrangements. I mentioned the two examples before with Indigenous communities and Black communities. You can imagine, especially in urban centres like Vancouver, Calgary and Toronto, there is a tremendous amount of diversity, many different corners and pockets into those communities. It is very difficult for one organization to have a handle on it. There are many ways to deal with that. Governance is one critical avenue to help direct resource flows.
Senator Ross: Thank you very much, Mr. Chunilall and also Mr. MacDonald.
Senator Pate: You may have heard my questions earlier, but in case you did not, one of the issues for smaller organizations, small charities — I think you have touched on it a bit — would be the challenge of being able to attract individuals to the organizations, whether it is because they are so specific in their focus or because of their location or a combination of those. I’m curious as to what measures you would see put in place. When I worked in the charitable sector, we often did things like set up creative ways of setting up advisory bodies or bringing in folks with stipends in situations where that might not otherwise be a possibility, or have special think — again, like an advisory but issue-specific focus groups and that sort of thing. Do you see any issue with this kind of provision for those small organizations who might be aspiring to diversify?
I also used the example of just on Friday I was approached by one such organization who are trying to recruit Indigenous members to their board. There are so many people working in those sectors, and they are oversubscribed. It is difficult to find folks who are willing to sit on boards because they have so much work already.
Mr. Chunilall: Yes. I am happy to lead off on that great question.
I think there is an assumption that larger organizations are in a better position to have boards that reflect the diversity of the communities they serve. My experience tells me that the challenge is the same whether you are large or small. As an example, I work for a national organization. We, at times, have 18 board members. Even at 18, we still do not reflect the diversity of Canada. But we measure the composition of our board in respect of critical benchmarking data that is available to us. We know that, at any given point in time, we’re not going to check all the boxes, but at least we know which boxes we haven’t checked. Then we can look at other ways within our organizations in terms of how we are building teams, the types of people and partners we are engaging with, to help us offset some of the constraints we have in terms of diversifying our board. Many boards are around 10 to 14, maybe 15 people. Particularly in large urban centres, even in mid-sized urban centres, whether you are a large or small charity, even with that many people, it is impossible to check all the diversity metrics. The important thing is that we understand where the shortfalls are because that gives us an ability to mitigate in another part of the organization or help develop strategies and tactics that can compensate for the lack of diversity within our teams or our board structures.
Mr. MacDonald: I have two quick points on this.
First, I think the legislation’s design is nice in the sense that, to the point that you made, senator, there are some organizations who, because of the subsector or area they serve, they may be concerned that right now they would not reflect well in the diversity reporting. The way that this will be done in an aggregate way actually protects organizations and enables them to feel comfortable submitting that data. I think that is helpful in the design of this.
The second part of your question, though, I think will come out of the first in the sense that as we understand more about the composition of boards in our sector, organizations like Imagine Canada and I would think CFC and other provincial, local and national players will respond to the gaps that we’re seeing. Whether it is informational webinars or whether it’s best practices and having leaders convene and talk with one another about their approaches in identifying, recruiting and supporting volunteers to sit on those boards, having a data-informed conversation will allow this work to be more effective.
Senator Pate: Thank you.
Senator Loffreda: My question is for Mr. MacDonald. I would like to refer once again to the letter you co-wrote with other non-profit organizations of the Federal Nonprofit Data Coalition. We know you support this bill, but you are also calling for an amendment that would remove the provision in the bill that would grant the minister the ability, if he or she so chooses, to revoke a charity’s registration if it failed to provide its data on diversity. We heard Senator Omidvar’s comment on this proposal during our first panel, and you already commented on this, but if you wish, you could expand on why the coalition is seeking this amendment and why it does not support this compliance measure. You could expand further. It is an important issue.
You also wrote in your letter that you could possibly propose other amendments as the bill goes through the legislative process. Your letter was published five months ago. Has the coalition thought of other possible amendments since then?
Last but not least, privacy has also been raised as a concern. How major is that concern? Would it discourage potential board members from adhering to a board because of those privacy concerns? These are important issues. Further commentary would be welcome. Thank you.
Mr. MacDonald: Sir, I will start with the revocation question. It is important to note that the minister already has the power to revoke organizations for non-compliance as it relates to their T3010 completion. Our recommendation here is to not pick one line or box on the T3010 and assign revocation language to that one box. The authority already exists. It doesn’t need to be present in this legislation. We don’t really like the precedent it might set. If organizations are not completing their T3010 properly, the regulator will step in. Our point is that it should not be a revocation starting point; it should be an education and information starting point. In our opinion, it is an overreach on this.
I cannot remember the second one so I will go to the third one and maybe you can remind me of the second one.
As it relates to privacy, the point here is that the legislation forbids the CRA’s annual report on this data from identifying individuals or individual charities, but it doesn’t really talk about in what other circumstances the data could be released. Whether it’s court or audit proceedings, we would want to work with the CRA to ensure that there is data privacy and that it’s protected. Essentially, if we are talking to organizations that this is in aggregate — and to the comment I made earlier on Senator Pate’s question, it’s empowering for organizations to know that they won’t be viewed individually, that this is part of aggregate as they work towards greater diversification. It is having further conversations with the CRA to ensure that that is the use of the data, and if there are other intended uses, the data privacy by individual organization is respected as part of that process.
Maybe if you could remind me of what the second question was.
Senator Loffreda: Yes. The second question was other possible amendments.
Mr. MacDonald: Right. I would say at this point in time that the three points I have raised are the most current ones.
Senator Loffreda: Do you feel that it would discourage some Canadians from being part of a charitable board because of the disclosure requirement, where many Canadians may think — I know back in my banking days, I had one request a week to be part of a board. You would have to disclose where you are, and the other one would come back to you and say, “Hey, why did you choose them and not me?” Do you see that as a concern?
Mr. MacDonald: I certainly think it’s a consideration. I am not sure I would raise it to the level of a concern. We are talking about a balance here. We are talking about wanting to make sure that a system that has operated in a particular way for a long time continues to evolve. That is going to require information and questions. Over time, as a society that is ever-changing through immigration and different parts of our communities are literally changing, it’s incumbent upon our leadership to change as well. These will become more natural conversations over time. They are considerations. I’m not sure I see them as concerns.
Senator Loffreda: Thank you.
Senator MacAdam: Mr. MacDonald, this bill is tied to Recommendation 8 from the report of the Special Senate Committee on the Charitable Sector. I was reading the government’s response in 2021 to this report, and the response indicated that the government supported the recommendation, and the former minister mentions the role of the Advisory Committee on the Charitable Sector, which I understand is a consultative forum for the Government of Canada to engage in meaningful dialogue with the charitable sector. My understanding is that you were on that advisory committee. The government states that it will ask the committee to consider conducting further study on the issue and, if the committee decides to examine the issue, the CRA will review and consider any resulting recommendations.
Do you know if further study or review occurred and what recommendations or key takeaways there were from that process? You may have mentioned a number of them already, but could you comment on that? If there is any additional work considered or key takeaways that we haven’t discussed already, I would be happy to hear about them.
Mr. MacDonald: Thank you for the question. You’re really testing my memory on this one now because it has been a few years.
Yes, in full disclosure, I was one of the co-chairs of the Advisory Committee on the Charitable Sector, and this was an area of discussion. I am grabbing the reports of that because there was quite a volume of work. We had working groups on data collection, with recommendations around a national data strategy. In addition, we also had a working group on working with vulnerable populations. To be honest with you, I would have to go back and reread the reports in terms of whether there was a specific recommendation related to data collection. To be honest with you, I just don’t recall. I do know, though, that these were important conversations. I just can’t remember if it was a specific recommendation.
Senator MacAdam: Okay, thank you. Could you provide that to the committee?
Mr. MacDonald: Absolutely.
Senator MacAdam: Thank you.
[Translation]
The Chair: You can see that the senators on this committee are always well prepared.
[English]
Senator Kingston: My question is for Mr. MacDonald. I am still wondering what you base your concerns around data privacy on since the act actually says in the completion part that you “must not identify any individual registered charity.”The CRA has all kinds of other information about us, about companies and about charities and so on. I would like you to explain further what your concerns are around data privacy being a problem.
Mr. MacDonald: Yes, absolutely.
What we are reflecting on are conversations that we have had within the sector. As data is collected, this would be new for some organizations. This is going to be maybe a bit uncomfortable as they are starting to work through having conversations with board directors. It would be reasonable to understand that they will feel comfortable in understanding how that data is going to be used.
As I mentioned in my opening comments, there is not, I don’t think, clarity as to other potential uses of this data. Would this data be open to audit proceedings or court proceedings? Even though the intent is to use it in a learning way and in an aggregate way, our recommendation is to ensure that we are having conversations with the CRA about how this would work so that organizations could feel comfortable that those would be the exclusive ways this data would be conveyed, never getting to the stage of individual organization disclosure.
What we are doing is surfacing through this conversation some issues that have been raised by the sector, and we want to make sure that they are baked into the process so that organizations feel comfortable when they are giving this data as a part of their T3010.
Senator Kingston: Wouldn’t it be unusual, though, for these things to happen to data from experience with the rest of how the CRA does its business when something is required for audit, as you have said, for instance?
Mr. MacDonald: Yes. Again, the sector is so vast. There are 86,000 registered charities. This doesn’t affect non-profits but registered charities instead. There is a natural nervousness when you’re dealing with the regulator, so it’s important to give as much comfort as possible to those volunteers and staff who are completing these forms that it will be used in a way that it won’t hurt them. Instead, it will be part of this aggregate learning for the sector. What we are trying to do is cross our T’s and dot our I’s here to ensure that organizations feel comfortable in how the data will be used in the future.
Senator Kingston: Thank you.
The Chair: Thank you to the witnesses. We have reached the end of our time, so we will conclude the meeting. Thank you for appearing today. It’s much appreciated.
[Translation]
Tomorrow, November 6, at 6:45 p.m., the committee will resume its study of Bill S-264, An Act to establish International Tax Justice and Cooperation Day. Thank you, everyone, and thank you to our witnesses.
[English]
Senator Galvez: When will we continue on this bill? Is there a calendar?
[Translation]
The Chair: It was actually introduced today. It was the senator’s last day. We were trying to schedule the bill so that she could be here. In the end, she was here remotely, but we wanted to take the opportunity to get the work started. We’ll continue with Senator Dalphond’s bill and then with the established work plan that we sent you last week. Not to all the members? We’ll try to send the work plan to all the members. I thought it had been sent to everyone. Thank you.
(The committee adjourned.)