Salary Cap Removed From Bill C-470, But More Work Still Ahead for the Sector

The sponsor of Bill C-470 has agreed to remove a provision that would have capped compensation for nonprofit employees.

Bill C-470, introduced by Albina Guarnieri, Liberal MP for Mississauga East-Cooksville, would have allowed the Minister of National Revenue to deregister any charity, private foundation, or public foundation that paid ANY employee a total compensation of more than $250,000 a year. The $250,000 would include salary and taxable and non-taxable benefits (e.g., pension plan contributions, professional association fees, etc.). The Minister would also have been authorized to publish the top five salaries paid by any organization.

However, the bill's sponsor recently agreed to eliminate the salary cap from the bill.  The successful removal of the salary cap is a testament of the great work by Imagine Canada, AFP and other groups in a broad coalition created to educate Parliament about the bill and its potential impact on Canada's nonprofits.

However, AFP remains concerned about the added element of Ministerial discretion regarding the disclosure of compensation, as we noted in our supplemental comments to the Standing Committee on Finance.  A copy of those comments is available below.  Beyond the potential redundant bureaucracy, we feel that this approach creates the inaccurate impression that a simple list of employee salaries is the only factor necessary for creating and ensuring transparency in the nonprofit sector.  As we note in our brief, a variety of factors must be weighed to provide a true sense of transparency and only when given proper context through a number of supplemental factors can compensation be viewed appropriately.  On Dec. 6, 2010, Mark Blumberg, a member of AFP's Canadian Government Relations Committee, testified before the Standing Committee on Finance and voiced these concerns as well.

In that sense, AFP believes that the charitable sector must remain engaged with Parliament and continue to request that they seek the input of the sector.  Although the elimination of the salary cap is great news, it would appear that our work is far from over on this issue.

AFP plans to continue a dialogue with Parliament, as well as with Imagine Canada and the other members of the coalition, about this issue in 2011.