Senator Omidvar Addresses the Governance Data Gap in the Charitable Sector with Bill S-279

On February 8, 2024, Senator Omidvar moved second reading of Bill S-279, An Act to amend the Income Tax Act (data on registered charities) Watch:

Senator Omidvar: Honourable senators, I rise today to speak on Bill S-279, An Act to amend the Income Tax Act (data on registered charities).

This bill is based on the eighth recommendation outlined in the report of the Special Senate Committee on the Charitable Sector, entitled Catalyst for Change: A Roadmap to a Stronger Charitable Sector.

As you will all remember, the special committee was called into life by our former colleague Senator Terry Mercer. I was privileged to serve as its deputy chair, along with Senator Yonah Martin.

This bill is pretty straightforward. It’s pragmatic. It’s entirely achievable within the context of our ongoing discussions on anti‑racism, diversity and inclusion. It concentrates on a single sector, albeit a profoundly significant one, which plays a crucial role in aiding Canadians in both ordinary and extraordinary circumstances. I’m referring to the charitable sector, which extends its services across every corner of our nation and touches every aspect of our lives, encompassing religion, health, culture, poverty and the environment, to name a few.

The sector employs close to 2.5 million individuals and contributes 8.2% to our GDP, almost similar to the agricultural sector, yet it grapples with a dearth of data collection and, therefore, a lack of evidence.

As one of our witnesses in the Special Senate Committee on the Charitable Sector pointed out quite humorously, we know exactly how many eggs are laid by Canadian chickens on Canadian farms every day. I see Senator Black is listening to me, and he can argue that point, but we never know about who works and governs a sector of a similar size. This deficiency poses a significant challenge, because robust evidence is imperative for shaping policies and making informed decisions.

The bill before you represents a modest but vital step toward addressing this evidence gap. The bill centres on the leadership of the sector. Every charitable organization in Canada is overseen by appointed or elected directors. They establish the mission, determine priorities and endorse hiring and procurement policies. They decide how and where charitable dollars will be spent and make determinations about the scope and nature of service provisions. They shoulder the responsibility for strategic guidance and provide fiduciary accountability. They are ultimately responsible for ensuring that their organization — their charity — stays within the boundaries of the law. I think we all know that charities are heavily regulated by the law. Their background and expertise contribute to fostering trust among stakeholders and, ultimately, enhance the charity’s ability to fulfill its mission and make a positive impact upon the community.

In short, the buck stops with them.

If we estimate that each of these charitable organizations, of which there are roughly 85,000 in Canada, has a board of roughly 12 directors — and I’m actually underestimating because many charities have many more directors — we are dealing with a governance community of roughly 1 million individuals who wield the power to make life-altering decisions impacting Canadians.

Who are these individuals? They are likely people like us, because I’m pretty sure that each of you has at some time been on a charitable board. Therefore, I know that directors are dedicated, well-intentioned volunteers who devote countless hours to serving on charitable boards.

But who are they exactly? The truth is that we don’t have a comprehensive answer.

In June 2019, when the Special Senate Committee on the Charitable Sector published its report, we acknowledged and affirmed the sheer scope, size and influence of the sector, which touches every aspect of our lives and wields considerable economic and employment influence. I think we are all well aware how much we have relied upon the charitable sector, both in ordinary and extraordinary times. I refer, in particular, to our recent experience with the pandemic when we relied upon the sector, not only for our health and mental health needs, but for our food security and personal security.

However, due to the fact that charities do not systematically collect governance data on a sector-wide scale and the government likewise does not engage in such data collection, we are left somewhat in the dark regarding the governance profile within the sector. As one witness said, we need diversity and representation data so that we are able to measure our progress in terms of inclusion.

That is why the committee’s report called for the annual collection of data based upon existing employment equity definitions. You might recall that we had a similar discussion when we considered Bill C-25, a government bill that amended the Canada Business Corporations Act. Consequently, all federally incorporated distributing corporations are now mandated to provide shareholders with information about the demographic profile of their directors within the employment equity guidelines. These legislative provisions have been in effect for three years now.

Despite some flaws, the corporate sector now has a reporting requirement and regime that compels it to annually report on the demographic diversity of its boards. Consequently, we have an annual spotlight on whether diversity in corporate boardrooms is on the rise or decline, providing us with a foundational body of evidence.

I believe that the majority of us here recognize the pivotal role, function and significance of charities. Nevertheless, the scarcity of available data regarding the sector leads me to a conclusion: The sector might espouse diversity in its rhetoric, but it has yet to fully implement it in practice. In short, as I have said, its spirit is willing, but its flesh is weak. Its aspirations in this regard are commendable and its willingness is apparent, but it appears to struggle in translating its intentions into concrete actions, as highlighted in the go-to journal for philanthropy in Canada, The Philanthropist Journal, which stated:

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 urging the charitable sector to collect diversity data pertaining to their own boards. I said to them, “Sector, heal thyself.” Fortunately, thanks to the power of social media, the Chief Statistician of Canada, Anil Arora, reached out to me, and Statistics Canada became engaged. They agreed to conduct a voluntary survey of the sector via crowdsourcing. The survey was collaboratively designed by StatCan with substantial input from leaders in the sector. It was launched in December 2020 and remained accessible until January 2021. A total of 8,835 individuals participated in the survey, with 6,170 identifying themselves as directors.

This marks Statistics Canada’s first focused attempt to gauge diversity within the governing boards of the charitable and not‑for-profit sector.

The survey requested board members to provide social demographic information encompassing aspects such as race, gender, sexual orientation, age, immigration status and disability. The findings of the survey revealed that while women were fairly well represented on these boards, individuals from racialized backgrounds, Indigenous communities, immigrants and those with disabilities were not. Among survey respondents, 14% identified as immigrants, 11% as visible minorities and only 3% identified as First Nation, Métis or Inuit.

I commend StatCan for taking the initiative to conduct the survey and providing us with a snapshot. However, this was just a one-time process. It lacks statistical significance, as I’m sure my colleague Senator Dasko would point out, due to its crowdsourced nature. Further, it is likely that the organizations and individuals who volunteered their information were already sensitized to the issue.

The solution is pretty straightforward: The minister responsible for the Canada Revenue Agency should incorporate one question on this matter into the annual T3010 forms that the charity organizations are required to file annually to maintain their status. However, legislative authority to do so is lacking. That is why my bill provides that authority, within the Income Tax Act, to collect the data.

Each charity would complete this form every year, thereby enabling the collection of annualized data that can be aggregated and, if needed, disaggregated to provide a comprehensive view of governance diversity.

The data would be based on employment equity definitions to ensure precise, legally compliant and comparable measurements. This would enable strategic planning, intersectional analysis, public accountability and effective initiatives for fostering diverse and inclusive workplaces. If the employment equity definitions expand, so will the data collection to incorporate new categories. Recently, the government has announced that it plans to expand these definitions to further distinguish gender identity and race beyond the standard “visible minority” definition. I believe this would be a welcome change.

Because I’m talking about employment equity, let me reflect a bit on Canada’s experience with employment equity. Federally regulated businesses must collect data on their workforce every year. Employment equity is not about targets or quotas; it is only about gathering evidence. But the mere gathering of this evidence has led over the past 30 years to a transformation of Canada’s workforce because of greater awareness arising from the collection of evidence.

Taking a lesson from employment equity, I believe it is time for governance equity. We already have the fundamentals in place for federally regulated businesses. It is time to set these fundamentals in place for federally regulated charities.

Armed with this tangible evidence, Canada and the charitable sector can evaluate whether progress has been made, and if so, how and where. Regional and sector comparisons would become possible.

For instance, the data could tell us a story about the cultural charitable sector, and its sub-sectors could determine whether cultural charities in Nova Scotia or Prince Edward Island are more or less on the same path to governance equity. The leaders and laggards would be identified but in an aggregate manner.

I want to be clear that no individual charity and no individual director will be reported out. Instead, the data will be a snapshot of the entire sector. It will not be possible to identify whether governance equity in a particular organization is a strength or still an opportunity.

If we are sincerely committed to ensuring that the upcoming decade embodies reconciliation, inclusion, optimism and a profound respect for Canada’s diversity, then it is imperative that we listen to the voices of Indigenous peoples, marginalized communities and racialized groups — not only within the confines of academic institutions, courtrooms and the Senate, but also within the decision-making chambers of our numerous well‑intentioned and necessary charitable organizations.

This bill offers a straightforward yet comprehensive approach to addressing the governance opportunities within the sector and it is supported by the sector. I am hopeful that I can rely on your support for this uncomplicated, practical and pragmatic bill and move it forward. Thank you.

Hon. Donna Dasko: Would the senator take a question?

Senator Omidvar: Of course.

Senator Dasko: Senator Omidvar, this is a wonderful initiative. I’m absolutely thrilled to hear that you have put this forward.

What sort of detail do you think the data will be able to provide? Data will be collected by the Canada Revenue Agency with respect to the four designated groups, so we’ll have that. Will the analysis be able to provide information back to the public on the individual sectors, whether they be culture, health or whatever? What about the analysis of intersectionality? Can the data be examined in a little more depth such that we might understand intersectionality a bit better with this data set? Thank you.

Senator Omidvar: Thank you, Senator Dasko. You are the expert on these matters; I am not, so I think you could answer that question much better than I. However, my intention — and I have spoken to Statistics Canada and others about this — is that if the data were available based on the standardized employment equity definitions, it would be possible to aggregate and disaggregate it. That disaggregation could be a request submitted by Statistics Canada or by other stakeholders.

As an example, the cultural sector could ask the question: Tell us about cultural organizations across Canada. How many women are on the boards?

You could disaggregate that data further by race and gender identity. All of that would be possible, but it would likely have to come at the request of stakeholders. I understand that is what happens. Both the Canada Revenue Agency and Statistics Canada will have the data. Submissions will have to be made to further mine the data for the kind of information you’re looking for, but it will be available.