The hidden value of the CERC program

Bill C-470 drafted by Liberal MP for Mississauga East-Cooksville, Albina Guarnieri, passed first reading in Parliament in October. It was supposed to be a call to arms against charities whose salary structures make “a mockery of the concept of a charity.”

The bill “proposes to provide the Minister of National Revenue with the discretion to deregister any charity, private foundation or public foundation that paid any employee more than $250,000 annually in total compensation. This would, in essence, impose a cap on the salaries of leaders of charities in Canada.”

This cap does not just mean salary; it also includes health and dental benefits and pension or retirement plan contributions by the employer. The inclusion of these benefits in the cap means that an employee with a salary significantly below $250,000 could still exceed the compensation cap.

What is the problem? Well, most of Canada’s universities are registered charities and you know the obvious implications of such a bill. It will affect most university administrators and a few of our top scholars. The AUCC, who is arguing against the implementation of such a bill, decided to showcase how this would undercut the Government of Canada’s Science and Technology. Clever!

This compensation cap could undermine the Canada Excellence Research Chairs program, they argued. The program supports 19 individuals across Canada!

Recall that for each chair, the university receives up to $1.4 million annually for seven years. The program provides that each chair can receive up to $10 million over seven years. Many of the CERC recipients likely receive more than $250,000 in compensation per year – exceeding the compensation cap in Bill C- 470. As a result, universities would be forced not to participate in the program, to avoid the risk of having their charitable status revoked by the Minister of National revenue.

During her testimony on November 29, the Hon. Albina Guarnieri, the sponsor of Bill C-470, tabled amendments with the committee to delete all of the compensation cap provisions in the bill.

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