Motion: Calling on the Government to Include Questions on Board Diversity on the T3010 and T1044

On February 8, 2022 Senator Omidvar moved that the Senate call upon the Government of Canada to implement the eighth recommendation of the first report of the Special Senate Committee on the Charitable Sector, entitled Catalyst for Change: A Roadmap to a Stronger Charitable Sector, which proposed that the Canada Revenue Agency include questions on both the T3010 (for registered charities) and the T1044 (for federally incorporated not-for-profit corporations) on diversity representation on boards of directors based on existing employment equity guidelines. Watch her speech:

Hon. Ratna Omidvar: Honourable senators, I rise today to speak on this motion, which calls upon the Government of Canada to implement the eighth recommendation of the first report of the Special Senate Committee on the Charitable Sector, entitled Catalyst for Change: A Roadmap to a Stronger Charitable Sector.

This is a rather straightforward, practical and eminently doable proposal in the context of our discussions of anti-racism and inclusion. It focuses on one sector, but an incredibly important sector, that helps Canadians get through ordinary and extraordinary times. I am talking of the charitable and not-for-profit sector. It provides services in every corner of our country. It covers all aspects of life in Canada, from religion, to health, to culture, to poverty and to the environment, to name just a few. It employs close to 2.5 million people and contributes 8.2% to our GDP, but it also suffers from a lack of consistent data collection.

This is a significant problem, because evidence is essential to making policy and other decisions. This motion is one small step to addressing this evidence gap.

Its focus is on the leadership in the sector. Every not-for-profit and charity in Canada is governed by appointed or elected directors. They set the mission, they determine priorities, they approve hiring and procurement policies, and they decide who gets services and how. If one estimates that every one of these charities and not-for-profits — together about 170,000 organizations — each has an average of 12 directors, we are talking about a governance population of roughly 2 million people who make life-changing decisions that affect Canadians.

Who are these people? I know many of them; you likely know many of them, too. In fact, many of you are likely on these boards yourself. The board members and directors are smart, well-meaning volunteers who give hours of their time on not-for-profit and charitable boards.

But who are they really? The answer is that we don’t know.

In June 2019, the Senate Charitable Sector Committee tabled its final report. Buried in the 42 recommendations is one that deserves re-examination, given the context of the day. In the report, we took note of the size, scope and influence of the sector. As I mentioned earlier, it touches all aspects of our lives, and it wields significant heft in our economy and in our employment figures.

I think we also know how much we have relied upon this sector during the pandemic.

But since charities and not-for-profits do not collect data on governance — at least not on a systemic, sector-wide basis, and since the government does not do that either — we don’t quite know whether the governance of these essential organizations is inclusive of the many diversities in this country.

You will all perhaps remember that we had this conversation before when we discussed Bill C-25, which amended the Canada Business Corporations Act. As a result, all federally incorporated distributing corporations are now required to provide shareholders, at annual general meetings, information about diversity among directors and senior management. The changes to the law have been in force now for two years.

In my view, this bill was an imperfect bill, and some of us tabled an amendment but did not have enough support in the chamber. However, at least the corporate sector now has a reporting provision that mandates it to report annually on the demographic diversity of their boards’ plans. As a result, we will get, year after year, a spotlight on whether diversity is increasing or decreasing in corporate boardrooms. At least we will have a baseline of evidence.

I believe — and I hope I am right — that most of us here believe in the role, the function and the centrality of charities and not-for-profit organizations to the ongoing health and vibrancy of our country. But what little data we have on the sector leads me to a conclusion: It may talk the walk of diversity, but it does not quite walk it yet. Its aspirations are admirable on this front, and its spirit is willing, but its flesh appears to be weak. As The Philanthropist Journal has noted:

Boards within the charitable and philanthropic sector have often been criticized for a phenomenon dubbed “snow-capping” — having racialized workers on the front lines while mostly white executives sit in decision-making positions at the top of the organizational hierarchy.

In June 2020, I issued an open letter asking the charitable sector to collect data on diversity on their boards. Luckily, through the power of social media, Statistics Canada became involved and agreed to conduct a crowdsourced voluntary survey of the sector.

This survey was designed by Statistics Canada with significant input from the sector. It was launched in December 2020 and available until January 2021. A total of 8,835 individuals completed the survey, of which 6,170 were board members. It was Statistics Canada’s first targeted attempt to measure diversity on governing boards in the charitable and non-for-profit sector.

The survey asked board members about socio-demographic information, including their race, gender, sexual orientation, age, immigration status and disability. The survey found that whilst women were equitably represented on these boards, racialized people, immigrants and people with disabilities were not.

Among those who responded to the survey, 14% identified as being immigrants, 11% identified as belonging to a visible minority group and only 3% identified as First Nations, Métis or Inuit.

The survey also asked them to describe the communities they serve and whether their organization had a written policy on the diversity of its board of directors, and 47% of participants said their organization did not have such a policy.

I really appreciate that Statistics Canada stepped up to do this survey and provide a snapshot into the sector, but this is only the first step in a one-time process. It is also not statistically significant because the data was crowdsourced. We need a way of gathering annual data on diversity in the sector. The Senate’s report Catalyst for Change: A Roadmap to a Stronger Charitable Sector, recommended that the government’s role be to ensure that this data is collected and tabulated on an ongoing basis.

What needs to be done is actually quite simple. The minister responsible for the Canada Revenue Agency needs to add a question on this matter on both the T1044 and the T3010 forms, the forms that charities and not-for-profit organizations have to file annually if they want to retain their status. Every charity and every federally regulated not-for-profit organization must fill this form out every year. Therefore, with the inclusion of a new question, data would be gathered annually and would be aggregated and possibly disaggregated to present a clear picture of diversity. Based on clear evidence, the country and the sector could see if progress is being made, how and where.

If we truly want this next decade to be a decade of reconciliation and about inclusion, hope and respect for the diversity of Canada, then we must hear the voices of Indigenous peoples, racialized communities and other marginalized groups not just in universities, courtrooms and in the Senate but also in the boardrooms of our many well-meaning charities and not-for-profit organizations.

This motion provides a simple but systemic way of tackling the governance deficit in the sector. Whilst it does not require changes to legislation, it does require political will.

I hope I can count on you for your support for this simple change that will be the beginning of much-needed renewal of a very important sector in Canada.

Thank you, colleagues.