Mr Harris: The mayor of Sturgeon Falls, Mr Michel DeCaen, is here and I wonder is he could come up. Mr Chairman and members of the committee, this bill is An Act to establish the West Nipissing Economic Development Corporation. The mayor will have a few comments to make. It is a bill that has the support of the Ministry of Municipal Affairs. It enables West Nipissing, in co-operation with the Ministry of Northern Development, which has provided assistance to the West Nipissing Economic Development Corp, to assist the town in helping itself.
This is a community of about 6,000 people. West Nipissing is an area of considerable size, about 9,000 people. The main industry is forestry. The main employer is MacMillan Bloedel Ltd. MacMillan Bloedel has closed permanently a significant portion of its operation in the town of Sturgeon Falls, putting about 160 employees out of work. The existing mill is a small craft mill that is threatened.
The urgency of forming the development corporation is the proposal that the corporation, in conjunction with MacMillan Bloedel, wishes to go forward with for a project to recycle a significant portion of cardboard, I think is the best way to describe the material. It offers an opportunity for West Nipissing to salvage the existing operation, which is not a profitable operation at the present time. There is, as many of you are aware, a current substantial oversupply in the forest products industry.
The joint venture will have no money from the municipality other than whatever the costs are of setting up this West Nipissing Economic Development Corp, which will be sponsored by the municipality. There will be grants available through the Ministry of the Environment and the normal grants that are available through government northern development from the Ministry of Industry, Trade and Technology. However, MacMillan Bloedel will be assuming 100% of the liability, as I understand it, of the operation of the facility.
In addition, the bill for this project provides an opportunity for the municipalities in West Nipissing to help themselves in a very difficult time, not a time that is unknown to many of you in your ridings, but which is hitting small communities in northern Ontario very hard, particularly those dependent on one industry primarily. In Sturgeon Falls and West Nipissing, it is the forest industry.
I believe the mayor has brief comments that he would like to make, and I believe there is somebody here from the Ministry of Municipal Affairs to answer any questions on technicalities of the bill. I appreciate very much the committee's consideration. Let me also thank you very much for accommodating my schedule and letting the mayor and I proceed right at 10 o'clock.
Mr DeCaen: Mr Chairman, honourable members, on behalf of the five municipalities of West Nipissing I would like to thank all the members of the Legislative Assembly and the members of this committee for supporting the introduction of this private bill. We know you are very busy, and therefore our comments will be brief. This private bill we are asking you to consider will serve as a vehicle to save jobs in our area. It will help us protect the few employment opportunities we have left while assisting us in our efforts to secure the economic viability of our communities.
It is not the intent to permit the use of municipal tax dollars to assist private enterprise. The only tax dollars proposed by this bill are for startup. It is not our intention to bypass the Ontario Municipal Board approval procedure. The present economic conditions impose a great strain on all levels of governments, and we believe in participating in our future. We need your support through this bill to permit us to participate with private enterprise in a joint venture that will be beneficial to all people of West Nipissing. We thank you for your consideration.
Mr Drainville: Let me just say that the Ministry of Municipal Affairs has no objections to this going through. We would see this as helpful to the community if it was helped through with dispatch. Thank you.
Mr H. O'Neil: I have been asked to represent the Federated Women's Institutes and their solicitors in the presentation this morning relating to Bill Pr109, An Act to revive the Federated Women's Institutes of Ontario, Bay of Quinte Branch. I will give you a little bit of background on this and I will be very brief.
The Federated Women's Institutes of Ontario, Bay of Quinte Branch, was incorporated by letters patent on August 2, 1972. The letters patent of the corporation were cancelled under section 347(9) of the Corporations Act by an order dated July 17, 1979, and the corporation was dissolved as of that date for default in complying with section 5 of the Corporations Information Act, 1976. Through inadvertence, an application for revival of the corporation under section 347(10) of the Corporations Act was not made within two years of the date of dissolution. Accordingly, an application to the Legislature for an act to revive the corporation is now necessary.
It is my understanding that no existing legislation is amended by this bill. The applicant is not a municipality and the bill does not affect the interests or property of any municipality or local board or the tax base of any municipality. Also, it is my understanding that the companies branch of the Ministry of Consumer and Commercial Relations, the corporations tax branch of the Ministry of Revenue and the office of the public trustee have been consulted and they have been advised by the office of the legislative counsel that there is no objection to the bill.
No responses have been received from any persons or groups to the notice of the bill published in the Belleville Intelligencer and the Ontario Gazette, and to the best of our knowledge and belief, there are no persons or groups who are opposed to the bill. I might also mention that the bill has no effect on public legislation.
Mr Ruprecht: Seeing that Mr O'Neil is the sponsor of this bill, I want the record to show that, because of the inadvertent nature of the situation, we have no objection to reviving this legislation. Since there is no objection, consequently I would move to pass it as quickly as possible.
Consideration of Bill Pr113, An Act to revive Hotstone Minerals Limited; Bill Pr114, An Act to revive Tasmaque Gold Mines Limited; Bill Pr115, An Act to revive Pittsonto Mining Company Limited; Bill Pr116, An Act to revive Sunbeam Exploration Company Limited, and Bill Pr117, An Act to revive Petitclerc Mines Limited.
Mr Miclash: My guest is Glen Erikson, who is the solicitor representing Mr Arthur White. This is to revive five mining companies. You have the information before you. I will let Mr Erikson explain the reason for this.
Mr Erikson: Mr Arthur White was a very active mine financier and developer in the 1940s and 1950s. He is a gentleman who is now in his 80s. He was very successful in raising funds for the development of mining properties in various places in Ontario. It is estimated that he financed approximately 50 projects in his time, raising approximately $60 million in exploration funds. He discovered eight mines -- quite an accomplishment in his industry -- which include the Campbell Red Lake mine at Red Lake and also the Dickenson mine at Red Lake. These two mines are still in production 40 years later. They employ approximately 600 people. They have produced in excess of three million ounces of gold to date. The companies he was responsible for forming and moving forward have paid hundreds of millions of dollars in taxes.
In the last few years, there have been a number of business reversals in his own situation and that of his family. He finds himself in much reduced circumstances, living outside the Toronto area, unable to cope with costs in Toronto. As a shareholder of these defunct companies, he wishes to reactivate them in an attempt to find value or make value for himself and the other shareholders.
If anyone living can be considered a pioneer in the true sense of the word, this gentleman is a pioneer. He is also going to be inducted into the Canadian Mining Hall of Fame on January 6, 1992. If anyone would be interested in a résumé of his life and accomplishments, I have 10 copies here.
These bills come forward together because of a belief on my part that there is a certain efficiency in dealing with these companies at once rather than separately. The mailings were made, all filings were made, back taxes have been paid and notice has been published in the Ontario Gazette and the Toronto Star in the usual way. No notice of objection has been received from any party, to my knowledge. I submit that the revival of these companies is something that could be done in good conscience to recognize the achievements of Mr White.
Mr G. Wilson: I would like to introduce Elizabeth McIver, the vice-president of the Rideau Trail Association, the group I am sponsoring this bill for. It lost its incorporation status in 1979 because of a failure to provide annual returns. Recently, the association became aware of this loss of status and activated the process to achieve reincorporation.
The association has submitted documents: the bill requesting reincorporation, a compendium of background information, a cheque for $150 and documents indicating publication of an intent to reincorporate.
Ms McIver: Thank you for an opportunity to speak. The Rideau Trail Association is a hiking club between Kingston and Ottawa. It is a non-profit charitable organization and has established and maintained a hiking trail of 320 kilometres that is utilized a great deal by people in eastern Ontario. Last year we had over 1,000 members; 860 of them were individual paying people or families, 100 were life members, and there were 90 complimentary memberships.
Mr Drainville: Before I begin, Mr Chair, is the representative of the public trustee here at the meeting? Then I think I should, on behalf of the public trustee and the Ministry of the Attorney General, read into the record this concern they have. This is to the attention of Susan Klein, legislative counsel.
"By way of background, the public trustee is responsible for enforcing charities law (a provincial responsibility under the Constitution Act, 1867) in particular monitoring the proper applications of charitable assets to charitable purposes and acting to remedy improper or inappropriate use of such assets. The public trustee's jurisdiction in charitable matters is found in the Charitable Gifts Act, the Charities Accounting Act, as amended and the public trustee's standing to invoke the court's inherent jurisdiction in matters charitable.
"Upon receipt of legislative counsel's advice that this charity had applied for legislation to review its corporation status, we reviewed our files and found that it had never complied with section 1 of the CAA. Review of the public records further disclosed that the charity had been in existence since 1964 without complying.
"Section 1 of the CAA requires a charity to provide to the public trustee, without request and within one month of the charity's establishment, a description of the assets held for charitable purposes and an authenticated copy of the instrument governing the application of its charitable assets to charitable purposes. The purpose of the section is that there should be no restraint on establishing a charity, but that once a charity has been established the public trustee be notified so that he can monitor its compliance with charities law.
"Section 2 of the CAA empowers the public trustee to require a charity to provide information relating to its compliance with charities law. Upon the public trustee's receipt of notification under section 1 of the CAA, a charity usually is required, pursuant to section 2, to provide information annually on its assets, the application of its assets to its charitable purposes, and the names and addresses of the individuals who are responsible for the management and administration of the charitable assets.
"Historically, court proceedings were the only method of testing a charity's compliance with charities law and in such proceedings a charity and those individuals who are responsible for the management and administration of the charity assets bear the onus of proving compliance. Sections 1 and 2 of the CAA were enacted to enable the public trustee to obtain information without the necessity of court proceedings and those sections are key to the public trustee monitoring compliance.
"We have advised this charity of its non-compliance with section 1 of the CAA and requested that it provide information pursuant to section 2 for its last three financial years and hereafter without further request. The information the charity has provided is incomplete. In particular, it has failed to disclose the names and addresses of the persons who are responsible for managing and administering the charity's assets. In addition, the charity has reserved as to whether it will provide information to the public trustee in the future, notwithstanding its requirement to do so pursuant to section 2 of the CAA.
"In view of the charity's past and continuing non-compliance with charities law and its reservation as to whether it will comply in the future, the public trustee requests that consideration of the above-referenced bill be deferred until the charity has remedied its current reporting deficiencies and undertakes to comply with its future reporting obligations under the CAA.
I have read this into the record so that there is a clear understanding that there are questions as to how this organization has conducted its business with regard to the law around charities. Therefore, there is some concern about these irregularities being dealt with in a way that will be conducive to allowing them to continue in the future as an organization.
Mr Sutherland: I have a question to the applicants. Do you still have reservations about providing the information and will you give this committee assurance you will provide all the information the office of the public trustee is requiring?
Ms McIver: I am not aware of the correspondence regarding our charitable status. I have been on the board for three years and there has never been any correspondence during that period of time. I have been vice-president and I assumed the presidency two months ago. If there was correspondence, perhaps it was back in the 1970s. I was of the assumption that we were in compliance with our charitable responsibilities. You said 1964. We were incorporated in 1974. I am wondering if --
Mr Drainville: I am not representing the public trustee. I am not from their office. I am a little surprised that person is not here at this point. The concerns raised here are obviously major and it might be appropriate to defer a decision on this matter until the House reconvenes. That way these matters can be gone into in more detail. If you say you are not in receipt of this letter at all, it would be appropriate to make sure that you understand some of the things being said here and the gravity of the situation around them.
Ms McIver: We have no problem in complying with what is required to receive and maintain non-profit and corporation status. I am surprised. I am not aware of it and I am sure the rest of the board members are not aware of any correspondence on this issue.
Ms McIver: I am not aware of the letter. We have not replied to what is in that letter because I am not aware of the letter. There has been nothing, no correspondence. I would have to find out who they were referring it to.
Mr Drainville: This letter was faxed to me. It was originally sent to Susan Klein, legislative counsel, explaining the situation. It does not state here who they were involved with in terms of their discussions and I do not have that information because I would not be party to that normally.
Mr Ruprecht: Yes. In deference to Mr Wilson and this motion, I think if we passed this motion the applicant would not have to return, unless there are questions of course, but Mr Wilson may be provided the opportunity to speak on that on behalf of the applicant, if the committee is so inclined. There may be a way out of this without having the applicant return to this committee.
Mr Drainville: This is dated December 16, 1991. But they were also indicating that they had had other correspondence with the organization, so it depends on who was receiving the mail for the organization.
Mr Harnick: This bill is an act to revive the Church of the Torontonians. The Minister of Consumer and Commercial Relations dissolved the corporation on July 17, 1979, for default in filing annual returns. The applicants represent that this default was inadvertent, that they were not aware of the dissolution until more than two years after it had occurred and that activity has been carried on in the name of the corporation despite the dissolution. That is the purpose of the bill.
I have with me counsel from the Church of the Torontonians. Joy Casey and Gary Shiff are here. I also understand that the public trustee is aware of this application and has given his approval. If there are any questions, as I say, Joy Casey and Gary Shiff are here.
Mr Shiff: Mr Chairman, members of the committee, I think it would be helpful for the committee if we gave some background to this application for the reinstatement of the charter. It is my position that, unfortunately, much of the information that has been presented to the committee to date is irrelevant to the issue of the reinstatement of the charter. Nevertheless, it has been raised here, and we feel it must be addressed. It is our position that if the objectors are unhappy with the management, there are remedies available under existing corporate law, but because of that I feel some clarification is necessary.
The church was incorporated in 1974 and at that time it had approximately 75 members. As the church grew, unfortunately its management controls did not. The church also grew in terms of setting up congregations. It originally had one congregation. It now has three congregations under the umbrella of the Church of the Torontonians. There is a church in Scarborough, one in North York and one in Toronto.
In 1979, the charter was lost. It is our belief, because we cannot even determine exactly why, an annual return was not filed. It may have been sent to the wrong address, because the church moved between the time the annual returns were sent out and the time someone was supposed to look after it. At any rate, there was some inadvertence or oversight and the annual return was not filed.
In 1990, my firm was retained by the elders of the church to update its corporate records. As part of that process I did a corporate search and at that time it was revealed that the charter was lost. I contacted the public trustee's office and was advised of the steps to be taken to reinstate the charter. Certain filings were made and we were advised to obtain audited financial statements for the year ending 1990, which we did, and we filed with the public trustee's office. I will come back to that later, but we subsequently filed audited statements for 1988 and 1989 as well.
During the course of our filings with the office of the public trustee, it came to our attention that there were members of the church who were unhappy with the method in which the management of the church had been operated. At the instruction of the elders of the church, I was instructed to meet with the dissident group, if I can refer to them that way, or the objectors, with a view to attempting to resolve their differences. I had a meeting in my office at which time I disclosed the contents in my file and advised them of the steps I was taking to have the charter reinstated.
Unfortunately, at the same time, these objectors were sending very threatening letters to third parties and also parties within the church. Threatening letters were sent to the Canadian Imperial Bank of Commerce stating that if certain steps were not taken they were going to take legal action against the bank. The mortgagee was a company by the name of Wayne Safety. Threatening letters were sent to the board of directors, the church elders, and I was threatened as well. I was threatened that I would be taken to the law society if I did not take certain steps or if I attended certain meetings of the church. As a result of that, I contacted the practice advisory service of the Law Society of Upper Canada and was instructed that I should attend that meeting.
At the same time, we had some discussions with the objecting group with an attempt to disclose financial information. The board of directors and the elders of the church were concerned about the question of confidentiality, because under the tenets of the religion of this particular group you could not disclose who made donations to the church. That was a matter of confidentiality that would be kept only to those directors and elders of the church. Unfortunately we were not able to come to any resolution in that matter and I think the matter simply was dropped.
I have had numerous discussions with Eric Moore of the public trustee's office and, as a result of a discussion, it was his view that it was in our best interests to obtain audited financial statements for 1988 and 1989. It was also his view that a business meeting should be held to put certain matters into motion. There was a meeting held on, I believe, September 29, and I think you may have a copy of the minutes of that meeting in the material. At that meeting auditors were appointed, new directors were elected and Blake, Cassels and Graydon was authorized to continue with the application for the reinstatement of the charter.
After the meeting, McCartney, Green, Vitero, who were the auditors appointed, prepared audited statements for 1988 and 1989. Those were delivered to the public trustee, I believe around November 15 of this year, and were circulated or made available to the members of the church within the last week or so.
Part of the concern of the public trustee was the lack of financial controls. As a result of the audits done there were management reports prepared of which I have a copy with me, and I can have that circulated. The management report also indicated the management action that was being taken by the board of directors. A finance committee was set up headed by a chartered accountant and virtually all have either been implemented or are in the process of being implemented in order that the church can continue and present audited statements in years to come on a proper basis.
There was also a question about designated funds. The church in 1990 and early 1991 found that its offerings were lower than had been anticipated, because of the recession. As a result, the offerings that had been made for specific purposes were then being used for the operating expenses of the church. Those funds have been replenished to the point of about 75%. There is a sum of about $56,000. I understand offerings have been made that are in excess of $35,000 to $40,000 and it is hoped by the end of this year or early January all the funds will have been replaced.
I believe the office of the public trustee has a copy of the management report and I believe was comforted by that. I also have a copy of a letter that I can also circulate, dated October 31, to Eric Moore of the public trustee's office, indicating what had been implemented on behalf of the church.
The objecting group launched a motion for the appointment of an interim receiver in November of this year. I believe there was a filing -- I just received it now -- to the clerk of this committee on December 13, which shows the material that was filed on behalf of the objectors. What disturbs me is it does not show the material that we filed, nor does it show the results of that decision. I have a copy of the endorsement of Mr Justice Austin of the Ontario Court. It is very short and I will just read to you the two paragraphs that I think are relevant.
"It appears that the matter of the charter is being looked after. As to the other matters, they are all internal concerns. The court is very reluctant to involve itself in such matters. The proper avenue for relief is, in the first instance, through the church procedures and offices."
In my view, this has been an extremely costly expense for this church. It has to retain lawyers and accountants and has had now protracted court proceedings. The withholding of this charter serves really no useful purpose. If the application is denied, the public trustee has indicated to me that it will implement the doctrine of cy-près and the real property will probably be distributed to another charity, another church.
The difficulty I have is that the objecting group complains about the lack of a charter and then it objects to its reinstatement. To me, this is an inconsistent and somewhat irrational approach. There are, in my view, grave implications for the church if this matter is refused. There is a mortgage that is maturing for the church in January 1992. In order for it to be able to refinance it has to have its charter in place. The public trustee, in a letter dated December 16, indicated he had no objection to the application for the reinstatement of the charter.
Mr Ruprecht: I have a quick one, if possible, of the solicitor. You mentioned something about donations that may be made to a charitable organization or a church that do not have to be listed, meaning do not have to be identified. What did you mean by that? In other words, if I wanted to make a donation to a church, do I get a receipt?
Mr Shiff: It is a question of disclosure. Yes, you do get a receipt. But the question was, should the entire church know who has made donations within the church and how much, to what level? That was what I was referring to. If I, for example, have made a donation to the church, I would get a receipt at the end of the year. The concern was, if I have made a donation to the church, do I want other members of the church to know that I have made a donation and the degree, how much, the quantity? That was the concern as to the confidentiality.
Mr Shiff: Under church law, if you were to go to the treasurer of the church and say, "How much did Gary Shiff give to the church?" that would not be disclosed to you. That would be a matter between myself, I guess, and the church.
The Chair: Any further questions? Hearing none, we seem to have a number of objectors, gentlemen, if you would not mind allowing them access to the microphones. We may have further questions subsequent to their testimony. I believe we have Mr Peter Teoh, Mr Edward Mason, Mr Quentin Ng, Mr Rong-Kai Hong and Mr Tian Tin Sy. If there are other objectors who wish to speak before the committee or who do not feel themselves to be represented by the gentlemen present, please indicate. Could you, for the purposes of Hansard, please identify yourselves into the microphones.
I would like to state our position first today, because it seems to me what Mr Gary Shiff has said about our position is contrary to our actual position. We are not here to object reviewing the statement of an accountant. We are basically asking the chairman and the members of the committee to consider withholding this application until the court matters and some of the financial and management matters have been fully resolved within our church.
Unfortunately, we have approached the management of our church and made significant efforts repeatedly over the years internally, but we could not get any reply at all. We were obliged to seek court action, and we regret that this costs significant amounts to ourselves and to certain members of the church. Unfortunately, that was the last step we could take.
Mr Gary Shiff said something of our inconsistent position. I would like to clarify that first. We are not objecting to the reinstatement of the charter. We want the legal matters and all the management matters to be resolved. For example, the audited financial statement of 1990 reveals there was a significant amount of money paid to one director of our church and paid to many members of our church who referred to themselves as co-workers. This payment, I understand, was paid as salary for this service to the church, whatever service that is. However, those people have disguised the payment under "Gift to co-workers" and they are not taking any tax deductions. They are ripping off the government. There might be serious tax evasion in this aspect, and we are still seeking legal advice to resolve this issue.
Furthermore, there has not been proper maintenance conducted in the past few years. The minutes of the corporation were completely falsified. I will just give one striking example of how the minutes have been falsified. We requested the secretary to give us the minutes of the corporation. Of those particular minutes of the corporation, we inspected the most recent one prior to 1991; that was 1990. The meeting was conducted in November 1990. It recorded there was an election and there was unanimous voting for the directors. In fact, that was not true at all. It recorded zero votes against the election. Many objections were expressed, and those objections were unfortunately suppressed. The members were deprived of their privileges.
This is a charitable organization. The latest patent which this charity was initially granted states clearly and expressly that the organization is to operate without any gain to the members, without any gain to the directors, and is exclusively for charitable and religious purposes. All of those have been violated. They have been badly violated. We are shocked, and that is why we come here to ask members of the committee to really look at both sides of the story.
I can go on and on, but I would just like to mention a few of the points we would like you to consider. When we discovered a significant amount of wrongdoing, breach of trust and nepotism from the 1990 audited financial statement, we suspected there were further misdoings in the previous years. We repeatedly requested the management to release the audits of previous years so that we could assure ourselves that the management and financial affairs had been taken care of properly and that the community was not affected and that the privileges and rights of our membership are properly protected against all those tax evasion matters.
Our request was refused until the public trustee required the audited financial statement for 1988 and 1989 to be done as well. To our dismay and to our utmost shock, after the audited financial statement was available, the management did not want to circulate a copy to the members. They basically only kept a copy and said, "You can come and review it."
Yesterday I found out the reason why they did not want to distribute the copies to the members. It is because after we commenced legal action, our solicitor actually was able to secure a copy from the opposing counsellor, that is, Blake, Cassels and Graydon. I would just like to read one statement of the auditor's report. It says:
"We were unable to satisfy ourselves that all expenditures of the church had been recorded, nor were we able to satisfy ourselves that the recorded transactions were proper. As a result, we were unable to determine whether adjustments were required in respect of recorded or unrecorded assets."
Recorded or unrecorded liabilities: In the components making up the statement of revenue and expense and surplus, the whole financial statement has been a mess. Furthermore, the church charter has been lost for 12 years. The management continues to issue tax receipts for deductions for the donations members make to the church. They have placed those members in serious violation of Canadian tax laws. We go to a church and those people represent to us that donations can be made to the church and tax receipts can be issued. In fact, those tax receipts are not valid. This is a very dangerous thing for the members to get engaged in.
I can go on. The management claims it was not aware the charter was lost in 1979. However, I doubt that they were not aware. I can point out one instance why I doubt they were not aware. First of all, in 1985-86 a mortgage transaction was obtained by two members of the church who did not have any authority of the membership to close this mortgage transaction. Furthermore, a collateral was placed on the church assets.
I have asked my legal counsel to inquire what the proper procedure is in order to place a lien on a property. My legal counsel has advised me, and I verily believe this, that in order to place a lien on a property, the lawyer for the purchaser and the lawyer for the lender have to verify that the title of the land is good and is valid. It is unlikely for both lawyers to miss that point, because this involved a substantial transaction.
Furthermore, why did the management go ahead to secure a mortgage from a private company at a high interest rate, higher than what could be obtained in the financial market at that time? The fact that they would not want to go to the bank but instead went to the mortgage company really compounded our concern. It appeared to me that a bank would first of all refuse to look at this mortgage transaction because the assets are worth over $6 million and the loan was only $300,000. If the title of the land was good at the time, all financial institutions would jump at this opportunity. The fact that the banks would not loan money to the church at that time really signalled to me that something was improper there and it was not disclosed.
Furthermore, Mr Gary Shiff spoke about the election; that is the most recent election, three months ago. I would like to point out to you the irregularities of that election. First of all, we informed the management, we told them the charter has been lost and therefore there is no legal entity at the present time which we can call the Church of the Torontonians. As such, an election on behalf of the Church of the Torontonians would not be meaningful because that entity does not exist at the present time. We told them we have to wait until the charter is reinstated. We will call a proper meeting and elect officers properly.
They agreed to our suggestion and we unanimously agreed that no election would be conducted. Immediately after our agreement we made the announcement to the proper congregation that involved a significant number of the church members who were aware and informed that no election would be conducted.
As a consequence of that, some of those people who might have been waiting to stand for nomination or election were not present and were never aware of that, so we question the validity of that election. We are in the process of legal action to rectify some of those problems.
In closing, I would like to point out that we are in the middle of legal action. Legal action has been commenced and there are some other actions we shall commence. One we are thinking of commencing is that the church has been used as a conduit for a private member to make investments. Again, this is contrary to the express purpose of our charity.
If you have the letter we submitted to you yesterday -- it is in a package -- I would like to point out one particular instance of that, if I have your co-operation. I direct your attention to exhibit C of this package dated August 20, 1991, to the director of charities, Ministry of the Attorney General, to the attention of Mr Eric Moore.
In tab C, exhibit C, if we go to the very last few pages of that exhibit, there is an appendix C. There is a letter dated June 17, 1991, addressed to the board of directors of the Church of the Torontonians. This clearly pointed out the church had transferred money to the United States and is using our charity money to support people in the United States for personal investment and personal gain.
The auditor's report on the bottom of this page says, "There could be two ways of interpreting this transaction based on substance." The first interpretation says, "Under this interpretation, the church acted as a conduit for Robin," who was the member of a church involved in this particular transaction. I do not particularly want to mention his name, but since his name is in here, I do not believe there is confidentiality as to what Mr Gary Shiff has addressed earlier.
Now it says, "Acting as a conduit for transactions of a personal nature does not constitute a charitable activity." Again, this is completely contrary to and in violation of the latest patent, upon which our charity was initially granted in the 1970s.
I would like to sum up our objections. We are not actually objecting to the reinstatement of the charter. We are basically asking the committee to withhold the application until the matters are resolved. The charter has been lost for 12 years and we are in the process of straightening it up.
It would only take a few months for us to fully resolve the issues and I do not quite understand why, after losing the charter for 12 years, we cannot wait for another four months. I do not know what kind of jeopardy and damage will be done to the church. Members of the committee, I would like you to consider these submissions I have just made. Thank you.
Mr Mason: I would like to mention our reasons for objecting to the passing of the bill at this time. It is because in our opinion there has been mismanagement of church affairs, especially in the financial department. Over $100,000 of designated funds were misused in that they were to have been sent to the poor saints in Africa but were never sent; funds that were to be sent to the church in Taiwan were never sent and funds for St Catharines and Montreal were never sent.
The church was used as an investment business. Money was transferred through the church to invest in a private business in the United States. The church was used as a loan company. A brother was given a large amount of money to invest in real estate and part of the money had to be borrowed from the bank. There were many other things, and all this was done in secret without a proper general meeting to ask the members of the church if this was proper and right. The board of directors, the elders, just got together and made their own decisions without consulting the members.
Mr Hong: If I could clarify that point, after four of us volunteered, we said the faith of the community cannot be affected and the faith of people had to be protected from those abuses. Four of us volunteered our time at big expense. We took it upon ourselves to investigate the church's management and financial affairs. In this investigation we were suppressed. One of us, Mr Sy, was actually threatened by two elders of the church. Those two elders went to his home to make threats. They said, "If you touch the books of account of the church, we are going to pick up your own books of account for investigation." It really shocks me, because we feel we are entitled to investigate the books of our church. We are members of the church, we make donations to the church and we want to make sure our donations are used in accordance with our intended purpose of charity.
After the management had committed so much negligence, so much breach of trust, that was the cause for us to start this investigation. Once we started this investigation, they threatened one of the people who initiated the investigation of these books of account. The person being threatened, Mr Sy, made an affidavit yesterday to the effect that he was being threatened. There was undue influence exerted by the management of the church to stop our investigation. This really compounded our concern. Why would church management bring this undue influence and threaten to suppress our privilege and right to investigate the books of account?
We do not do this for any personal gain; we do not do this for any gain at all. We are doing it on behalf of the members. We feel the members have to be protected and we do our best. We basically do our duty to make this investigation and we are shocked that the management has threatened and brought undue influence to stop us.
Mr J. Wilson: I want to thank the objectors for bringing forward their concerns. However, I have a couple of concerns. You started off your presentation by indicating you wanted us to hear both sides of the story. In the documentation you have provided to the committee, the other side of the story, all your letters to Mr Moore, for instance, there is never a response in the documentation. What did Mr Moore say to you? Second, you had a motion before the court in November and I understand that was thrown out. The judge's order is not contained herein. You have another motion before the court for January.
I would comment that the remedies you seek are most appropriate in court, not in this committee. I think you may have some very legitimate concerns about misappropriation of funds and mismanagement at the church, but the essential question before this committee is whether we should grant the church a charter. I do not understand how our allowing the church to have its charter back would in any way jeopardize your court case. In fact, I see it enhancing your court case because then you would be dealing with a legal entity. The only question before this committee, despite all your concerns, is whether we should grant the Church of the Torontonians a charter. Whether someone has been wronged by the church is a matter for the courts and you have a matter pending before the courts. I do not understand, as I say, how granting the church its charter, reviving the charter, would in any way jeopardize your case before the court.
Mr Teoh: We are not trying to object to the charter, as my friends have said, but just to wait until the whole matter is resolved. That is why we are asking for postponement of reinstatement of the charter until all the matters have been resolved. It will have a psychological influence on the members if the charter has been passed, because they are going to go back and say, "See, we are still in control."
Mr J. Wilson: One other point has been brought to my attention by the sponsor of the bill, Mr Harnick. Is not the mortgage of the church in jeopardy in January? You cannot renew it unless you have a legal entity. You may end up not having a church at all to take before the courts. I see the charter as a very separate issue to the mismanagement. Now, it may be of some emotional effect --
Mr Hong: May I just respond? You see, the church management has committed so much breach of trust and negligence and they still continue to try their best to stay in the management position. In fact, they are trying to get the charter back into their hands and we are worried. If the charter gets back into their hands, are they the right people to receive this charter? Are they the right people? Would they commit further wrongdoings in the future? We feel a proper election has to be called and proper officials elected.
Mr J. Wilson: But what comes first, the fact that you will have a church with a legal entity so you can hold an election and elect officers to that legal entity, or do you continue to operate in a void and have invalid elections, according to your own testimony?
Mr J. Wilson: So would it not be better to grant the charter, which is the question before this committee? In my opinion, it would not jeopardize your court case in any way. You have some complaints that a court should properly look at, although you are going to have to convince a judge to accept your motion. I am just trying to keep it to the question before this committee. It seems to me your own testimony was somewhat contradictory, and confusing politicians is not a good thing to do because, God knows, we are confused enough as it is.
Mr Hong: I did not think I was that confusing, but let me just clarify, if I can. Our objection is that we have to withhold the charter until the members can agree in a proper manner and nominate who is going to be the management of the church, so that those people who go into the management are fully trusted by members. Of course, in that election we do not know at this present time who are the members of the church because there is no bylaw of the church. The election was improper because of so many things put together. We feel we have to straighten out those issues before we will go to get the charter back. I do not know if I have clarified some of it.
Mr Ruprecht: This must be difficult for you to appear here before a public body, from a church whose whole idea would be an existence essentially to somehow ensure that there is love and forgiveness and all these kinds of things, to take on the establishment within the church. I am somewhat sympathetic to you and I guess my questions will point that out. You know by doing this the church is going to get pulled through the mud, yet at the same time you have made that decision by requesting that this committee hold up the charter. So even within your church I think it would be difficult because there would be various factions there.
Mr Hong: That is the first issue we have to straighten out before we like to see the charter granted. The way it appears, anybody can be a member of the church, because there are no membership dues, there was no admission, there was no procedure done to admit members at all. We just do not know who are the members in a strict sense, because some people go to church every Sunday and some go to congregation once in a while. But we do not know who are really the members with voting qualifications.
Mr Ruprecht: And you feel that as church members you should have the right, as bona fide and upright members, I assume, to get information from the church? That is correct? I am assuming that you went there and asked for information and you have been, from what you have said, almost misled. Correct?
Mr Teoh: May I just interrupt? Mr Shiff said that the drop in the donations is due to the recession, but I would like to contradict that by saying that the drop is due to many members having a mistrust in the management. They have lost their credibility by what they have done. So people are not going to offer, knowing the money they have offered might not be used in the way they wanted it. A lot of people have withheld donations for that one reason. It goes for me as well. If I was going to donate something for a certain purpose, if I do not trust the people or that organization with the money I have designated, then I am not going to do it.
Mr Ruprecht: I have said before, it takes a great deal of courage for you to appear here and to seek what you term to be some sense of justice and to do things right, and I appreciate that. I will stop my questioning now, but what I would like to do is to question the officials of the church once they respond to the objectors.
Mr Hansen: I have read most of the material I received last week and I am very confused on a lot of it. The one thing that seems to be confusing is that you talk about your charter and how you do things. Here in the House we have certain language that can be used, certain procedures we use. Is there something laid out on how a member becomes such or how a member is in good standing, how he is accepted into the church?
It sounds like you are saying there that, "We don't know who our members are." There has to be some way of designating who a voting member would be and how far in advance you have to call a meeting to vote in new trustees, or I think you call them "saints" here. These matters are confusing. As objectors, are things changing in the church that you can see through what you have objected to so far?
Mr Ng: Can I answer this question? If you have a chance to look at the minutes of the churches for the last 10 years you will be very surprised how they handle all the general meetings. All the records show they are not serious, not serious at all -- not counting the numbers of members, not writing anything down, just a couple of sentences and that is over. So the whole thing is very incompetent or not serious at all. According to the simple one or two requirements of the church, any Christian can be a member of the church.
Mr Mason: Can I ask you a question? We would like to have an open, honest election of directors selected by the members of the body. So far we have not been able to do that. If we could get some ruling on this matter as to who is and who is not a member and those who qualify, those who have been attending meetings regularly, say for the last 10 years, who are citizens or landed immigrants, not visa students, that those eligible in a municipal election be able to vote in the church election of directors -- If we could get such an agreement, then we would certainly agree with electing of directors.
In fact, they insisted that the elders and the directors be one, which is really contrary to Scripture. The elders are those who govern the church, the directors are those who govern the corporation. They went around telling the young ones that they had to elect the elders as directors, giving them too much power and too much authority. They have been able to manipulate and arrange things their own way, not allowing members to speak in the meeting, just standing up and shouting and shutting them down. Not allowing them to speak freely in this country is, in my opinion, not right. This has taken place not once but twice, maybe even more. I know of two instances where members of the church have been members in good standing for many years, stood up in a church meeting to share the Scriptures with the members of the body for their edification and were shut down. This is not right before the Lord.
Mr Hansen: I am not trying to take sides but maybe give a little bit of advice in the sense that the church has to come together. The objectors, for and against, have to sit down and come to an agreement. Call a general meeting and everyone decide who is a member, who is one that can stand as an elder.
Mr Hansen: They sound like simple things but, if they are not in place, there is just confusion, which is what I can see in the church. It is just mass confusion because you do not know how to follow any procedure on how a member is elected or how the finances are directed and who gets paid what. Until that is written down, you make the rules as you go along and next year it is different.
As I say, we are governed here at Queen's Park and there are members who try to step out of that spot every so often, but the Speaker usually brings them back in. We are used to being like in the army in the sense of following orders.
Mr Drainville: I want to make a few comments. I am a member of this committee as well as being the parliamentary assistant for the Minister of Municipal Affairs. Probably around this table or in this room, I have had more experience with these kinds of things. I am also an Anglican priest and have been rector of parishes over the last decade and have some knowledge of these laws as they apply to churches.
I have some very, very grave concerns, first off, about the charges that have been laid, and also the fact that you have gone on so long without redressing these problems and dealing with them. That is not only bad business practice but it is also illegal and I think that is so serious. In fact, we are really put in the situation, unfortunately, of having to deal with issues that we should not be dealing with at all on this committee, and that is the nub of the issue.
In terms of membership, which is an issue that has been raised by Mr Hansen, this is always an issue with every church across the board as to who is a member of a church for the purposes of making decisions for the church. Every church handles it in a different way, but it is always a nebulous area and there are very few churches that are able to define it in such a way as to make it an easy task of ensuring that the proper people make such decisions.
It is my own personal view, which I have discussed a little bit with legal counsel -- in terms of the mortgage that is going to be coming up, am I right to assume that this mortgage that comes up in January is on the church building? My understanding is, from talking to our own legal counsel, that if such a charter is not granted you will actually face the possibility of losing that church building.
Mr Drainville: Yes, after I am finished. I just wanted to say that in terms of that, it is to nobody's benefit, as far as I can see, for the church building to be lost. However you resolve your differences, which are many, you will have to have a church building and it is not to your benefit to see that church building end up out of your possession.
We can make no disposition as to the questions or the discussions or the problems that you have outlined to this committee. It is not the role of this committee to look at any of those things, grievous though many of them are.
My last comment would be as a person who has been involved in the church for many years. Seeing this kind of open rift and fight between two groups is no testimony to the things you are espousing. That being the case, I think that on our side, from what I can see, it would be in the interests of all people concerned to see this charter put forward and given, and that you resolve your differences in the court of law and continue to do the things you need to do to resolve them as quickly as possible so that you can get on with doing the work you have intended to do.
Mr Hong: First of all, I would like to comment about the mortgage. The mortgage transaction was done without the members' authorization. The members may not own a mortgage at all. Where did the mortgage money go? The church management has completely covered up the financial statement so that we cannot see where that money went. Where did it go? The year 1990 shows money went to the United States, money being paid to our director although he is strictly prohibited from doing so. The way we see it this is really abusing the privilege of the members because we put our money to the church. Church management entered our money as a liability. They did it without our knowledge and we are very concerned.
Mr Drainville: We have discussed this at length and I just want to respond in two ways. First of all, in your discussion with the trustee, the trustee has indicated that no objection is being made. That is the first thing.
The second thing is if you continue to be a member of this church and you want to see changes and you want to see these things done, then you have to work within the church whatever way. If you want to go to court, you do it, but it is not up to this committee to decide on that particular issue.
Mr Harnick: No. If you do not mind, I would like to respond to what Mr Drainville has said. I think what Mr Drainville has said is quite right. This committee cannot make decisions over legal matters.
Mr Harnick: I would also like to say something in response to Mr Hansen. What Mr Hansen has said is quite right. There is a difficulty here with rules. The idea of having this charter will now provide the church, regardless of what side you take in the argument, with the framework for the rules, so if there is going to be a change on the executive or the board, it will not be possible.
Without those rules being in place the resurrection of this church becomes impossible, because you do not have any entity with any rules that have to be followed. In fact, the people who are objecting will have a much greater opportunity to be able to force the changes they want if there is a framework to do it within.
Now one of the difficulties they have I believe is that they have no framework, and it may well be that when the charter is reinstated -- if this committee deems it is the right thing to do -- you are going to help these people and save them a whole lot of money if they can solve their problems without having to revert to a long and difficult court proceeding.
There may be a dual purpose served. I notice that each of the people who spoke indicated he was not objecting to the reinstatement of the charter. They have perhaps very legitimate concerns that are going to be addressed in a court of law, but it may well be that the reinstatement of the charter can save them a lot of time, a lot of money and a lot of aggravation, because they may well, with that in place, be able to solve their problems.
The Chair: Mr Harnick, I asked you not to respond while we had the objectors here, to wait until they were finished. You took it upon yourself to represent the applicants and yourself as the sponsor and did not wait until the objectors had finished, until we had posed all questions to them. If you wish to take charge here, then you have the opportunity to be elected to that position.
Mr Hansen: I have to say that this has been a very delicate situation and sometimes some items that come before this committee are dealt with in a little bit different light. This is a very serious one we have here. We would like to see the people who come forward walk away as one. It is very important that my friend over there has a chance to explain that. So have maybe a little bit of patience here, Mr Chair.
Mr Ruprecht: What difference would it make? When a member of the committee raises a hand, you are supposed to write it down and follow a certain order so that we do not constantly get into an argument.
Mr Ruprecht: Thank you, Mr Chair. I wanted to address myself to the point that was raised by Mr Drainville, who really makes an interesting comment. I have two questions now. One is to Mr Drainville, who I am not sure speaks on behalf of his minister, or as a former or present church --
Mr Ruprecht: Yes. But you are raising an interesting point. What I would like to find out from Mr or Rev Drainville at this point is, when he made his comments, did he make his comments as a church member, a member of the committee or the parliamentary assistant to the minister?
Mr Drainville: Certainly, I did not do so as the government, because the government has no objection to this and neither does the public trustee, which I said. What I have said is that I am on this committee, and as a member of the committee I am responding to the things that have been said up to this point in time.
Mr Ruprecht: Okay, we have got that clear then. As a member of this committee, Mr Drainville raises a pretty valid point, and that is, if this charter is not reinstated until the deadline for the mortgage, which I think is January -- Dennis, what is it?
Mr Ruprecht: Then if I have this correct, and maybe you can help me out on this, Mr Drainville, because you raised the point, by withholding this charter, if we were to move in that direction and to indicate that the parties should get together to try to work something out, the church is not losing its building.
Mr Ruprecht: That is the impression I get. Mr Chairman, we now have the word from the objectors. If they are finished, I would like to have the same question asked, without having to repeat myself, of the present church elders.
Mr Shiff: I think it is January 28. I am not precise on the date. But just to point us to the fact of how the mortgage got on the place, because it relates to this whole question of the mortgage, the lawyer for the lender has called me in the past and is obviously quite concerned about this, because if there is a problem, he will have to -- there is some issue of negligence perhaps in this matter.
We certainly were never involved in this. This took place a long time ago. Someone went ahead and authorized a mortgage without realizing there was in fact no charter in existence. There are other people who are obviously very concerned about what is going to happen today.
Mr Ruprecht: Mr Chairman, it seems to me the objectors are saying they would not lose the property. I am not sure what Mr Shiff said. Perhaps you can come back, Mr Shiff, because what I understood here, and this is the crucial point for my decision -- because I will tell you quite honestly, Mr Chairman, if I think the church is not losing its property -- I am not sure how Mr Hansen will respond to that later with his question -- I would be inclined to vote to hold back the charter. So it is very crucial, Mr Chairman, that I get an answer -- I am not sure about Mr Drainville or Mr Hansen -- to figure out whether the mortgage, if due on the 15th, would jeopardize the church building.
Mr Shiff: I do not act for the mortgagee, but if I did and I did not receive $288,000 on January 28, I would immediately commence foreclosure and/or power of sale proceedings and have that building sold and take the money from that and try to recoup my investment. There is a problem in that and I think it is going to end up in protracted litigation, because the public trustee will take the position that the land perhaps is escheated to the crown and therefore it is the crown's to sell. Then you will have some significant litigation over this issue. There is no question in my mind about that.
Mr Ruprecht: Mr Shiff, if that is the case, in your knowledge has this church been in a situation like this previously where it had not paid on time and consequently this process would take place immediately? You are saying: "That's it. On the 15th, immediately there is going to be a power of sale."
Mr Hong: I want to contradict what Mr Shiff has said strongly and clearly. He said if the payment is not made, then the church will lose the property. That is completely false and totally without grounds. Now, Mr Shiff, you have been a lawyer. Please listen to my explanation. This mortgage transaction was --
Mr Hong: I am sorry. Okay, but I want him to listen to this explanation too. This mortgage transaction had personal guarantors on it. I do not know why they got together to make this transaction. They did it anyway without the consent of members. I am of the opinion that if anybody wants to sign himself as the director of a charitable organization, as an officer of any charity organization, it is a big responsibility that person involves himself in. If he involves himself in such a position in committing negligence, in breach of trust, I do not know what the consequences would be.
But if somebody tried to mortgage out a property of a church without the consent of the members of the church, that is something anybody who wants to represent himself to be any officer of a church should not do. When the land was forfeited to the crown, they mortgaged the property. They pressed a lien on the property. This is just like mortgaging out the CN Tower and the SkyDome because that mortgage transaction was not valid and the mortgage company will not have any position to take power of sale or foreclosure because the mortgage transaction was not valid.
Mr Ruprecht: What do you think is going to happen? That is my last question. What do you think is going to happen on the 15th? What is your thinking on this now? We have got one position saying immediately there is going to be a power of sale instituted, right? What would be your thinking on that?
Mr Hong: No. If I were the person who is lending the money, I would go to those people who signed the mortgage transaction and say: "Listen, what is this? Have you got the membership approval to make this transaction?"
Mr Drainville: We have dealt with this I think quite adequately at this point in time. I appreciate your point of view. It does not give me very much hope, as I have talked to legislative counsel and I have asked their particular view on the legalities of this situation. I might have more confidence if you were a lawyer as well and were in a sense representing these interests from that perspective. We have discussed this and I move that the question now be put, Mr Chair.
Mr Christopherson: I am pleased to be here with a delegation from the city of Hamilton. Mayor Robert Morrow is here to speak to the bill and answer any questions the members might have. Also with us is the city solicitor for Hamilton, Ms Patrice Noé-Johnson. Hyphenated names I still have a problem with, Mr Chair. I am used to one nice long name with 14 letters like mine. When you start throwing hyphens in I get confused.
The matter before us is, I hope, relatively straightforward. It would enable the city council of Hamilton to change the makeup of the Hamilton Entertainment and Convention Facilities Inc board. The mayor would continue, as you can see in the explanatory note, to be a member of the board, but there would be no more than four members of city council appointed. To provide some background and perspective I will call on Mayor Morrow.
Mr Morrow: There are actually three parts to the suggested bill: (1) the makeup of the committee and our desire that there be greater flexibility on the part of the city's ability to appoint citizen members to the board, (2) a change in wording with respect to the jurisdictional responsibility between board and administration and, probably the most significant, (3) the repealing of a committee structure that has not worked to the benefit of this municipal corporation or the people of the city.
It really has caused a loss of revenues, and we are anxious to now move into the future with a new structure, based on function as opposed to specific building. There are three components of this board: the Copps Coliseum, which is the largest facility of it kind in Canada, our Hamilton Place theatre auditorium, which is almost 20 years old, and our very successful convention centre, which is right in downtown Hamilton as well.
After a great deal of work, both at the policy level and the staff level, we now have a structure that works well and that we want to support through the suggested bill presented by Mr Christopherson, so it is before you for your consideration.
Mr J. Wilson: Your worship, I just have a quick question on the composition of the board: I note you are asking that it be reduced from seven council members to not more than four. What is the total composition? How many citizen appointees?
Mr J. Wilson: That is what I am asking. Is 17 the limit? I happen to know that these tend to be very good appointments. Having friends who sit in many cities on many similar boards, I am just curious to know how many Hamiltonians you are considering appointing.
Ms Noé-Johnson: Mr Chairman, I can respond to that. There is no anticipation of increasing the size of the board, but to ensure that there is flexibility so that we do not come back for more amendments, we are merely asking that we limit the aldermanic participation and leave in the hands of council how many it feels the entire board should be made up of.
Mr Drainville: Actually, I was going to move that the question be put because of the very forthright nature of this bill, but since Mr Ruprecht has a question I will defer to him and then move that the question be put.
Mr Ruprecht: I think, Mr Drainville, we are on one side in this. I just wanted to congratulate the mayor for coming to Toronto and giving us his visit. Certainly all of us see that Mr Christopherson is the sponsor of it. I do not see any objection, Mr Drainville, on this one either. Congratulations.