Here is a copy of a letter from Imagine Canada sent out today to its members talking about Bill C-470, a Private Member’s Bill, trying to require certain disclosure and a cap on charity salaries.
A few weeks ago, Bill C-470, a Liberal Private Member’s Bill, introduced by the Hon. Albina Guarnieri, MP for Mississauga East – Cooksville, was debated in the House of Commons. The Bill seeks to enhance transparency in the charitable sector by requiring registered charities to provide the name, job title and annual compensation of the five executives or employees with the highest compensation. It also proposes to provide the Minister of National Revenue with the discretion to deregister any charity, private foundation or public foundation that paid any employee more than $250,000 annually in total compensation. This would, in essence, impose a cap on the salaries of leaders of charities in Canada. See the recent article by Jane Taber from the Globe and Mail for your information.
Imagine Canada is concerned about this Bill as we believe that it would do a disservice to Canadian charities, and to all those who support and benefit from the engagement of these organizations. Over the course of the last week, Michelle Gauthier, our Vice-President of Public Policy and Outreach and I have discussed the Bill with its author, Ms. Guarnieri, as well as with a number of parliamentarians from all parties in the House. These meetings were very productive as they provided an excellent opportunity for us to not only raise our concerns regarding the Bill, but also to inform MPs more fully about the contributions and challenges facing the sector.
During these meetings, we affirmed the charitable sector’s commitment to transparency, accountability and communication of impact to maintain and enhance donors’, funders’ and citizens’ trust in, and support for, the work of Canadian charities operating in communities across the country and around the world. We also spoke to the MPs about the Imagine Canada Ethical Code that governs fundraising activities and the new Standards Programme related to governance, financial transparency, HR and volunteerism that we are currently developing with our partners and which will require more disclosure of executive compensation. All with whom we spoke were appreciative of the time we took to meet with them and of our reassurances regarding the sector’s commitment to transparency.
We also used these meetings to increase awareness among MPs about the problematic nature of the proposed salary cap and some of the unintended consequences of the Bill, including the fact that universities, hospitals, major cultural institutions and other charities that already have executive compensation levels well above $250,000 would have to deregister or risk non-compliance. We explained that the Bill’s emphasis on salary caps and the false perception it creates regarding overall compensation levels in the sector would undermine many charities’ ability to recruit and retain highly skilled talent in an increasingly competitive job market both domestically and internationally.
We reminded MPs that there are many charity leaders overseeing multi-million dollar operations which present extremely complex management issues. We argued that in order to attract the leadership and personnel they require, they must be able to offer compensation reflecting the realities of local, national and international labour markets. We also noted that capping salaries in the sector could dissuade new graduates from considering a career in the sector or promising young leaders from pursuing senior management opportunities in a charity.
In addition, we explained that this measure would send a very negative message about the ability of the charitable sector to govern itself. Indeed, the autonomy of charities and the independent and volunteer boards which govern them to determine the compensation levels required to attract and retain the people necessary to the fulfillment of their missions must be safeguarded. Imagine Canada’s position is thus that while we remain steadfastly committed to transparency, including information on compensation, a real or perceived cap on levels of compensation in the sector would be detrimental to the fulfilment of charities’ missions.
We encouraged MPs to learn more about the HR challenges facing the sector and to focus on such issues as helping smaller and/or less financially secure charities provide adequate compensation to attract and retain staff. As those working in the sector know well, for most charities, the real issue that needs to be addressed is lower salaries and less competitive benefits (including pensions). We suggested that if MPs want to tackle a human resources challenge for charities then this is where they should be putting their efforts. While we acknowledged that these are difficult economic times for all sectors, we urged MPs to look at imaginative and creative measures to support the work of our charities and confirmed that we want to work with elected officials to find solutions.
In fact, this Private Member’s Bill offers us the opportunity to raise these important issues with all parties on the Hill. The charitable sector has not traditionally done a good a job in telling its story and in talking about the challenges that it is facing with regard to its human resources (paid or volunteer). This is an opportunity to do so.
The Bill is expected to next be debated in the House on April 19 at which time it will likely be referred to Committee. If it does go to Committee, Imagine Canada will ask to appear before the Committee. We are working with partner organizations in the sector to ensure consistent, clear and evidence-based messaging on this issue and will keep you apprised of developments as they unfold.
President and CEO
by the way here is my main note of Bill C-470 http://www.globalphilanthropy.ca/index.php/blog/comments/private_members_bill_on_salary_disclosure_not_helpful/
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Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.