Liberal MPS grill group that raised ‘red flags’ over WE deal
Credibility of charity watchdog questioned
OT TAWA • Liberal MPS spent most of their time during the parliamentary committee meeting on Thursday questioning the credibility of a charity watchdog that has been very critical of the WE organization.
During a two- hour meeting that suffered a near-hourlong delay because of Internet server issues, executives at Charity Intelligence Canada (CI) — a four-person charity that analyzes and ranks other charities based on their financial statements — faced numerous questions about the “red flags” it has raised in the past regarding the WE organization’s corporate structure and financial situation.
The organization’s managing director Kate Bahen has very publicly questioned the Liberal government’s decision to outsource the $912-billion Canada Student Service Grant to WE Charity. Among the issues raised by Bahen was that WE was recently in breach of its bank covenants, and there were “blurred lines” between WE Charity and the for-profit enterprise ME to WE.
But Bahen also faced an unexpected grilling from Liberal MPS on the quality of the watchdog’s work, their ability to properly analyze any charity, as well as their past track record.
The questions began with Liberal MP Francesco Sorbara, who asked Bahen about a past apology she had to make to True North Youth Foundation, as well as the fact that one member of their team had donated “substantial sums” to the Conservative Party in the past.
He also wondered why CI had lost its charitable status back in 2012.
“I appreciate the, the work you’re doing at Charity Intelligence, it’s important,” Sorbara said. “But there’s a double-edged sword because when you make a wrong call, you can actually hurt a charity significantly. Because I don’t know who’s doing the due diligence on Charity Intelligence. And you have had to apologize in the past when you’ve made that wrong call and the damage was done.”
Bahen responded that the only mistake she made regarding True North Youth Foundation was a “very rude comment” on a radio show for which she later apologized, but that there were no mistakes in CI’S research into the charity.
Kate Bahen did confirm that her organization had lost its charitable status “for one day,” and chalked that up to a delay in sending in CI’S annual returns to the Canada Revenue Agency. “It was a hard lesson learned well,” she noted.
Later, Liberal MP Peter Fragiskatos questioned Bahen on how her small team of four people could possibly do all the analytical and research work on charities they claimed to do.
“It’s hard for me to understand how an organization of four people can judge 250 organizations on a range of criteria, delve in and offer an enormous set of judgments. For us to look at that as MPS is a challenge,” Fragiskatos asked.
To Bahen, the workload is similar to that of a financial or credit analyst.
“When I worked on financial research way back in the day when I was young, there was a team of 38 people in the research department, and our research influenced 25 per cent of the daily volume on the Toronto Stock Exchange,” Bahen explained. “So this type of small team research coverage is very common in other sectors.”
But the most aggressive line of questioning came from Liberal MP Adam Vaughan, who immediately questioned the oppositions’ assessment that CI conducted “excellent work.”
“Based on what the opposition is saying, Habitat for Humanity, YWC A both in Vancouver and Toronto, Oxfam, the Canadian Humane Society, all are more of a risk to donate to than WE Charity based on the research that the opposition has declared as valuable excellent and impressive,” Vaughan told Bahen, referring to the ratings CI had given to all the above organizations on its website.
Bahen responded that the three- star rating afforded to WE Charity was based on their financial situation and didn’t take CI’S concerns about WE ’s corporate structure into consideration.
After a brief interruption by NDP MP Peter Julian calling his questions “disgraceful,” Vaughn then inquired about CI’S work in Quebec and in French.
“Based on your inability to assess fairly charitable activity in Quebec, the fact that out of the top 100 in Canada, only five are in Quebec and only two are Francophone- serving, would you share my assessment that your work has been incomplete in Quebec?” Vaughn asked.
Quebec charities need to improve their financial transparency as they rarely post their audited financial statements on their websites, CI’S managing director answered.