Bill Introduced in House of Commons to Remove ‘Direction and Control’
This excerpt from The Philanthropist Journal discusses Bill S-216, The Effective and Accountable Charities Act, which is sponsored by Senator Omidvar.
The moment came in a nearly empty House of Commons. Outside, the capital was still under siege from protesters, and the chatter in the corridors was dominated by a day of political upheaval and the demise of Erin O’Toole. But defining moments are not always accompanied by fanfare and the blare of trumpets.
When Conservative member of Parliament Phil Lawrence rose to introduce a bill that would free the charitable sector from longstanding constraints, known as the “direction and control” provisions, it was deemed a potential turning point for the sector and the beginning of the end for an archaic, 70-year-old rule that is out of step with 2022 attitudes toward partnerships and reconciliation.
The sector complaints over “direction and control” are many and varied, and they have dogged those working both globally and domestically. Many will be taking that message to Canadian MPs during the annual International Development Week (February 6 to 12).
The impetus for change has come from Senator Ratna Omidvar, whose Bill S-216 emerged from the Senate in December 2021, passed with uncommon unanimity and alacrity. Lawrence has sponsored the bill in the House of Commons.
Omidvar believes “direction and control” strangles cooperation and collaboration between donors and non-charities such as community organizations (not-for-profits, social enterprises, co-ops, civil society, or other equity-seeking donees), forcing charities to deal with them as intermediaries, creating a patronizing, colonial, and racist hierarchy that runs counter to the policy priorities promoted by the Liberal government – and language on partnerships espoused by Global Affairs Canada.
“I need not describe to you what the two words, ‘direction and control,’ mean to Indigenous organizations and Indigenous people,” Omidvar said, while speaking to her bill in the Senate.
“This pending legislation is an important moment in the history of the Canadian charitable sector,” said John Clayton, the director of programs and project at Samaritan’s Purse Canada. He likened debate on direction and control to debate over single-use plastics – both concepts are relics whose time has passed.
The bill amends the language in the Income Tax Act that requires registered charities to spend dollars on their “own activities” rather than giving autonomy to organizations on the ground whose expertise and experience make them best placed to efficiently use charitable monies.