FAA Background

On April 11, 2006, the Federal Government introduced the Federal Accountability Act, that includes specific measures to help strengthen accountability and increase transparency and oversight in government operations. The Accountability Act is part of a larger Action Plan that includes supporting policy and other non-legislative measures, and a draft bill to amend the Access to Information Act.

The Federal Government accounts for 7% of funding for Canada’s estimated 161,000 registered charities and nonprofits. Funding is provided in the form of grants and contributions.

The voluntary sector shares the Government’s desire to safeguard the public interest. However, any changes to accountability measures must recognize the added cost burden they impose on organizations, both through additional administrative and human resources costs, and the valuable time taken away from an organization’s core programs and services.

January 2007- The New Lobbyist Act: What the Changes Mean for the Sector

While the new Federal Accountability Act (FAA) was given Royal Assent in December 2006, only a few components go into effect immediately. Click here to read an article by Sean Moore, IMPACS Board member and partner in an Ottawa law firm, that outlines the legislative changes and what they mean for Canada’s charities and nonprofits.  

The changes to the FAA that are now in force include:

• changes to the Canada Elections Act that prohibit all corporate and union donations to federal political parties and candidates for federal office. As of January 1, 2007, both cash and in-kind donations are banned. Rules governing individual political contributions by citizens and legal residents of Canada have also changed effective January 1, 2007.
  
• Amendments to the Lobbyists Registration Act (renamed, in the FAA, as the Lobbying Act.) that will take place later in 2007. A number of steps must be taken before new regulations are in force, including the development of the regulations, public consultations, and approval by federal cabinet committees. It is anticipated the new regulations will be in effect in Fall 2007. See Sean Moore’s article for details about how the new Lobbying Act will require “registered lobbyists” to report in their filings with the Lobbyists Registry all “planned” contact with what are characterized as “Designated Public Office Holders”.
  
• Changes to Canada’s Access to Information Law including the inclusion of major Crown corporations.
  
• Addition of activities related to federal “conflict of interest” rules that previously had been only guidelines or practices. 

CCVO & Sector Partner Feedback to Government on the FAA

In May 2006, CCVO, along with 14 other Canadian voluntary sector organizations, commented on and endorsed an Imagine Canada submission about the proposed Federal Accountability Act. Imagine Canada presented the submission to a Parliamentary Committee and responded to questions for over half an hour. The Committee’s questions focused on the procurement of federal government contracts and why it is important to the sector, and issues of personal liability for directors.

The submission included the following recommendations:

Grants and Contributions:
Re-calibrate the negative impact on the community nonprofit sector of the ‘web of rules’ embedded in federal Grants and Contributions practices and re-focus on outcomes that are consistent with the sector’s mandate to its donors, volunteers, and the communities that depend on them.

Procurement:
Enshrine ‘fairness, openness and transparency’ in the Act but recognize that the consolidation of government purchasing power is inconsistent with the fairness principle to be enshrined in the Act insofar as it results in contracting practices that greatly favour large enterprises over small and medium enterprises and organizations.

Sector Infrastructure:
Identify complementary measures - such as an endowed fund to supplement current grants and contributions and contract funding, or a dedicated Parliamentary Committee – to address the broader policy objective of investing in a strong community nonprofit sector in Canada through longer-term and more stable funding models to improve sector infrastructure and organizational capacity.

Government Accountability Framework for the Sector:
Adopt a Government Accountability Framework for the Community Nonprofit Sector by updating the Government’s commitment to the Accord Between the Government of Canada and the Voluntary Sector and the Code of Good Practice on Policy Dialogue and, in particular, the Code of Good Practice on Funding.

Click here to read the full Imagine Canada submission.