In 2019, the Senate of Canada published Catalyst for Change: A Roadmap to a Stronger Charitable Sector. Among its recommendations was a suggested amendment to the Income Tax Act to require charities to report on the diversity of their boards in their annual filings. Senator Ratna Omidvar, co-author of the report, has since proposed Bill S-279 to amend the Income Tax Act to do just that. 

We had the pleasure of speaking with Senator Omidvar as part of our recent podcast episode exploring Bill S-279, as well as the current state of diversity in Canadian charitable leadership. Here’s a short excerpt of her interview. 

We asked Senator Omidvar if she could introduce Bill S-279 and what it aims to do. 

Senator Ratna Omidvar: Bill S279 is a fairly straightforward piece of legislation. It amends the Income Tax Act so that the CRA can include an added question that charities would be required to answer when they file their annual returns every year, their T3010s. This bill applies only to charities and not to not-for-profits.  

And with the inclusion of a new question on board demographic diversity, we will get the data at a national level, which can be further intersected and disaggregated to give us an evidentiary basis on trends, conclusions, etc.  

At this point, I think we largely have anecdotes and spot studies. I myself engaged in, worked with Stats Canada to do a survey of the charitable sector, I believe in 2020 during COVID. But it was a voluntary crowdsourced survey. And when you have respondents to the survey who volunteer themselves, let me submit to the listeners that there’s likely a bias that they’re already doing the right thing.  

We want to capture all 85,000 charities. We can only do that in a systematic annualized basis if we have a question in the T3010. So that is what the legislation proposes to do. It will ask a question. The CRA will develop the questions, not me, but I imagine the question would be something like how many board members do you have? Please identify them as per the following employment equity definitions. 

What about organizations who are uncertain about the extent of the Bill’s powers and what exactly they’ll be reporting on? Senator Omidvar explained more about the Bill’s aims.  

Senator Ratna Omidvar: We’re only talking about governance here, by the way. We’re not talking about senior leadership. The CBCA [Canada Business Corporations Act], this act that governs federally regulated businesses, asks respondents to do two things. One, to report on the demographic data of their governance and two, to file a diversity plan. 

This Bill, S-279, does not do that. It simply asks charities to disclose their data. And of course, the data can only be disclosed through self-identification. So let’s say a board of directors of a certain organization are not comfortable disclosing whatever identity that they may represent. That is up to them. The law also allows self-identification to prevail in all of this. So that, in a simple nutshell, is the Bill. It will provide data, which will hold up a mirror to the sector, and I believe to Canadians, about who governs, who leads, who makes essential decisions. Boards of governors, I think there’s a bit of a kind of, like, what do directors do? Well, they make really important decisions. They hire, they fire the top leadership. They set HR policies. They are the ambassadors. They create the vision, they decide which direction an organization will go. So, whereas the operations is always left up and should be left up to the hired staff, one cannot underline enough the role of governance in all of this, which is why I’m focusing on governance. 

Once the data is collected, how will it be used? Could it lead to Canadian charitable boards engaging in tokenism in order to check a diversity box on their T3010? 

Senator Ratna Omidvar: Okay, so first of all, I want to assure individual charities that data will never be made public. It’s a bit like filing your income tax return. Your income tax return is a matter between the CRA and you. It’s never made public unless you choose to share it with your accountant, which I’m sure many do. So in this case, the data is only available to the CRA.  

The minister of the CRA is required to file an annual report in both houses of parliament about the results of the data. We have a million directors roughly, and I’m just sort of guesstimating this. We get data from X hundred thousand, some people chose not to self-disclose. What we know from the declared data is that women are well represented on boards. I’m making this up, I’m trying to foreshadow what the first report would look like. That the charities have a challenge in including Indigenous governors or people with disabilities.  

And if we are able to follow the progress of the employment equity data, we would be able to understand that whilst women are well represented on boards, perhaps they’re women of a certain kind. And that’s the kind of information we are looking for. Then of course, on application to the CRA, sectors, associations can ask for permission to disaggregate the data as they currently do with Statistics Canada. And so the data could be disaggregated by region, by sector, which I think is the most important because then you’d have a sense whether the health sector is ahead of the curve, or whether the environmental sector is, or the international development sector, which let’s not forget, they’re a huge part of our charitable sector in this country. And so it would provide the kind of information that would help organizations, charities, make their own decisions. 

And I hope the decisions aren’t going to be, oh gosh, we’re behind the curve, we need more women, let’s pick a woman. That’s not the intention. I hope they would take a look at their systems and processes. Do they have term limits? Do they have nominations committees? Do they, you know, how far do they seek candidates? Do they rely on board members themselves, which is a captive group. I think it’s important to spread the net, but I’m not looking for action solutions. I’m at this point really only looking for the data. 

Want to hear more from Senator Omidvar? Listen to her full interview in the video below.

 Listen to the Senator and other experts discuss this pending legislation in our new podcast episode. Click here to listen.