Bill S-216: Direction and Control is an Example of Onerous Red Tape | MP Garnett Genuis
On May 16, 2022 MP Garnett Genuis spoke in support of Senator Omidvar’s Bill S-216, the Effective and Accountable Charities Act. Watch his speech:
Mr. Garnett Genuis (Sherwood Park—Fort Saskatchewan, CPC): Madam Speaker, it is a pleasure for me to be able to speak in support of Bill S-216, a bill that would do away with the direction and control requirements currently in Canadian charities law.
As I speak to this bill, I would like to recognize the excellent work of the sponsor in this place, the member for Northumberland—Peterborough South, and also to recognize the great work of Senator Omidvar, who has put this bill forward in the other place and championed it multiple times. I was very pleased to see at the beginning of this Parliament how the Senate worked very quickly to get a number of private members’ bills that had already passed in the last Parliament quickly into this House, so that we could move them forward. I was very pleased to see the work of Senator Omidvar and the whole Senate, as well as my colleague in this place, on this important issue.
Direction and control requirements: What are we talking about? Canadians, I think, are familiar with the concept of charitable status, the fact that organizations that have been identified and qualified as charities have certain privileges in terms of being able to issue tax receipts. We broadly recognize that it is in the public interest to provide charitable status to organizations that are doing charitable work to try to support the most vulnerable, to try to support international development and to provide various kinds of services to individuals.
I see great value in charitable work, not only because of the benefits that are provided to communities through the provision of that charitable service but also through the way in which charitable organizations draw individuals into the provision of those services directly, that they create a bond within communities between those who are working to provide services and those who are benefiting from the services that are provided.
The government has to have rules around who qualifies for charitable status and who does not. That much is fairly obvious, but the government should seek to make these rules as reasonable and accessible as possible, and to minimize red tape in the application of these rules. I was very proud of the fact that, while in government, the Conservatives had a strategy around reducing red tape in the private sector. We recognized that for private business, red tape was a major impediment, and we worked to measure and reduce the overall level of red tape.
Canada needs an intentional red tape reduction strategy for not-for-profit organizations as well. We need to recognize that not-for-profit organizations that are partnering with the government, trying to access government funding, provide services or simply benefit from charitable status, often have similar concerns about the level of red tape they face and how it limits their ability to do good work, helping to strengthen and fortify our communities.
Direction and control is one example of the kind of onerous red tape that charitable organizations have to deal with. I know the member who is putting forward this bill came to it as the shadow minister for revenue for our party in the last Parliament. My point in accessing this was as the shadow minister for international development. Direction and control, in particular, is a major concern for international development organizations.
How does direction and control work? It is simply the requirement that charitable organizations have direction and control over charitable activities, that they cannot dispense money to other organizations that are not charitable organizations if the activity that is under that provision is not fully under the direction and control of that organization. It creates administrative challenges when different organizations are trying to partner together to do good work that is clearly aligned with the charitable purpose of the organization that is doing the work, because it requires the charitable organization to be fully directing and controlling that activity. That creates administrative challenges. In particular, though, it is an issue in international development or when charitable organizations are trying to work with vulnerable communities.
The best practices in international development are really focused on empowerment. It is not about having donor countries controlling the activity that is happening in another country. Rather, it is about that donor coming alongside, partnering with but seeking to support, empower and give control to the organization that is on the ground, the people who are responsible for their own development. Too often, the discourse around international development has been about the external saviour coming in and providing the solutions, when, in reality, we should be thinking in terms of people in developing countries, those who are in the act of trying to strengthen their position economically and in other ways. They are the heroes of the story. Those who are coming alongside to help and support are merely providing an assist, a supporting function, for the central role held by the people who are involved in the struggle to pursue their own development.
When we have policies like direction and control, which say the control has to be in the hands of a Canadian charitable organization, this perpetuates a kind of colonial structure around development, whereby the control cannot be with people on the ground; the control is with the external organization providing assistance. A problem in international development is something that I have heard repeatedly from Canadian international development sectors, who say they want to see us address the issue of direction and control.
However, it is not just a problem with international development. We can think of this as being a particular problem with charitable organizations that are partnering with minority communities, indigenous communities and others. The requirement for direction and control is also colonial in that context, because it requires that the charitable organization be directing and controlling in some sense the work of organizations that may be coming from communities themselves. Unless those communities have an actual organization that has charitable status, their ability to take control of the process is limited. There is an administrative problem, but in particular, in this sense, there is a problem with the colonial message that is sent through the structures in place in terms of direction and control.
We have been working on this issue for a number of years. I have asked questions on it in the House. I have raised the issue, and many other members have done the same. One of the points of frustration is that we talk about the importance of charities, but there does not seem to be a home in government for charities. We do not have a minister responsible for charities, so when these questions come up there is sometimes a bit of back and forth. There is the engagement of the international development, revenue and finance departments, but we do not have a real hub in government for charitable activities.
That is an issue that needs to be addressed as well. To have a broader strategy around reducing red tape for charitable organizations, we need a structure within government that is a hub for policy and strategy around promoting and empowering charitable organizations and addressing the challenges they face. Notwithstanding those issues, we were very pleased to see that the government at least took a step in the last budget, which actually mentioned Bill S-216 and acknowledged the problem with direction and control. The foreign affairs committee in the last Parliament unanimously endorsed a direct recommendation asking the government to do away with the direction and control requirements and replace them with a new accountability structure. The foreign affairs committee specifically used the word “colonial” to describe the existing requirements.
Finally, for the first time in this budget, we have acknowledgement by the government that yes, we do have a problem with direction and control, and it has to be remedied. The budget said that the remedy the government would put forward would be in the spirit of Bill S-216, but there continues to be concern about that language, the spirit of S-216 instead of the text of S-216. Effectively, the text of S-216, in terms of replacing direction and control with an alternative accountability framework, was built up through extensive engagement and consultation with the charitable sector. It involves a strong structure of accountability whereby charities are accountable for the activities they fund but do not have to provide that direction and control.
There are continuing concerns among many in the charitable sector about the approach being taken by the government. They say the government has acknowledged the problem, but they ask whether it has actually brought forward the solution we need to see and whether it is prepared to solve the problem. To do so could and should have involved the full adoption of the text of Bill S-216 into the budget implementation act. We did not see that, so there continue to be concerns about whether the new framework will introduce a substantial level of red tape, so that we are replacing one flawed framework with another flawed framework.
The debate on Bill S-216 will continue and, in the absence of complete action by the government, the bill can and should go forward. I am hopeful that the government will take further steps from the budget, recognize that the charitable sector needs to be continuously consulted throughout this process, recognize that there is more work to do to ensure that not just the spirit but the letter and the fullest of the ideas that are present in S-216 are reflected in government policy going forward in order to empower charitable organizations, and address these problems of residual colonialism in our charitable laws.