Finance Committee on Feb. 14th, 2012

[The Chair, Conservative, James Rajotte]

I call the 42nd meeting of the Standing Committee on Finance to order. Orders of the day are pursuant to Standing Order 108(2), continuing our study of tax incentives for charitable donations.

We have six organizations with us here today. First of all, we have Big Brothers Big Sisters of Canada, the Canadian Council of Christian Charities, Cardus, the Community Foundations of Canada, the David Suzuki Foundation, and the Evangelical Fellowship of Canada.

I understand some of you are new to a committee format, so in terms of what will happen, each of you will have five minutes for an opening presentation. If you watch me, as the chair, I'll give you a signal to indicate when you have a minute left, and then we'll have questions from members in five-minute rounds.

We'll begin with Mr. MacDonald for your five-minute presentation.

[Bruce MacDonald, President, Chief Executive Officer, Big Brothers Big Sisters of Canada]

Thank you.

First of all, I'm absolutely delighted to be here representing Big Brothers Big Sisters of Canada.

Before discussing the two specific measures we're supporting, I wanted to provide a highlight reel of information so that it kind of contextualizes our thoughts.

Big Brothers Big Sisters is a federated organization of 123 local agencies providing on-the-ground mentoring services to children and families. We're providing these services in all the provinces and one territory. The organization has gone from serving about 9,500 kids in 1995 to a record high of more than 33,400 in 2010. Of particular note is the fact that this year we're in our 99th year of service, so next year we'll be celebrating 100 years of service to Canadians.

From the highlight reel, in Big Brothers Big Sisters' national budget, almost half of our dollars come from the corporate community and individuals. Our 2012 national budget calls for zero dollars to come from the federal government. So we're really quite an independent bunch. Our centennial plans will be funded primarily from the private sector. In fact we've already signed a couple of corporate deals and multi-year agreements to support our 100th anniversary. Locally our two main sources of revenue are special events—our signature Bowl for Kids Sake event, which I know many of you have participated in—and support from local United Ways.

We're an organization that believes strongly in safety and accountability. We have a set of national service delivery standards and organizational management standards that we accredit to ensure that our member agencies are operating at the highest quality.

As we continue to work to be a dynamic, relevant organization, we're always looking to ask how we can be better. Having this opening and questioning mindset allows us to make changes. I just want to highlight a couple of those. We continually ask whether we can provide our services in a long-term sustainable manner. Sometimes the answer is that changes in our model are necessary. In fact, several committee members here come from communities where significant change has resulted in stronger, newer services. Mr. Rajotte will have seen the recent merger of Big Brothers Big Sisters and Boys and Girls Clubs in Edmonton. Mr. Brison would have noted the renewal of our Annapolis Valley agency. Mr. Hoback will have seen the changes in Prince Albert, where we've gone from an independent, stand-alone organization to a satellite operation receiving admin support from Saskatoon.

Our centennial provides a wonderful forum for us to talk about where we aspire to go. In order to continue to grow our services, we know we need to do more to effectively engage individual Canadians as mission-based donors. So today we're supporting two ideas: the creation of a stretch tax credit and an elimination of the capital gains tax on donations of real estate and private company shares to non-profits and charities.

As part of our efforts to develop ongoing sources of revenue, Big Brothers Big Sisters has launched an alumni program. Currently there are more than 17,000 individuals who have registered, and it's our goal to convert many of those into individual financial contributors.

Strategically, the stretch tax credit is in direct alignment with our efforts, as many of these individuals are already giving to other organizations, and we intend to have them add Big Brothers Big Sisters to their roster of supported organizations. Having a real tax incentive to make new financial contributions will encourage these individuals of any income level to expand their charitable giving efforts.

Part of our long-term strategy is to work more effectively with individuals of higher net worth. Being able to offer a wider portfolio of benefits to attract the contributions of real estate and private company shares, complete with the suggestions for prevention of valuation abuse, as suggested by Donald Johnson in his submission to this committee in September 2011, would be of great value.

I just want to conclude with some thoughts around the transformative nature of our mentoring programs. As part of our efforts to clearly demonstrate impact, we've been partners in a five-year longitudinal study following 980 children and almost 500 mentor volunteers in our Big Brothers and Big Sisters programs. I'm pleased to be able to share some findings on the baseline, 6-month, 12-month, 18-month, and 24-month surveys.

When compared with young people who have never been matched, youth who have spent at least one year with a mentor are 43% less likely to have conduct problems, 48% less likely to have behavioural problems in school, 34% less likely to be victimized by their peers. It speaks to the bullying issue. They are two times more likely to have high levels of school bonding and commitment, two and a half times more likely to participate in extracurricular activities in school, and two times more likely to have higher academic achievement.

It's great that this committee is talking about ways in which Canadians can support organizations like ours, who are in communities across this country, spending thousands of hours working with Canadian children. Our mentor volunteers are making a transformative difference in their lives. So I thank you for this opportunity to speak to the committee.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll now hear from the Canadian Council of Christian Charities.

[Barry Bussey, Vice-President, Legal Affairs, Canadian Council of Christian Charities]

Thank you, Mr. Chair.

The Canadian Council of Christian Charities, which I'll refer to hereafter as CCCC, is a member-based association of more than 3,200 faith-based charities across the country.

We maintain two key functions. First, we provide practical, expert resources for the support and leadership functions of these charities. The second key function is our charity certification program. Since 1983, CCCC has conferred a seal of accountability on charities that have met our standards.

CCCC is pleased with the willingness of this committee to review tax incentives for charitable donations. We have canvassed our members to determine what their concerns and hopes are for this initiative. That's what I'm doing here today. We'll present some of those concerns.

Members of CCCC bring not only an altruistic impetus to do good, but a deep spiritual motivation to be, as it were, our brother’s keeper. Our members tell us that the younger generation do not give as their parents once gave. When they do give, it is often with conditions that it be spent on specific programs. We see a movement away from a large donor base giving small amounts to a smaller and aging donor base giving larger amounts.

Churches have expressed a desire to be involved in social enterprise endeavours but are concerned for their charitable status with Canada Revenue Agency, the CRA. Government policy, of course, will need to become more flexible for such creativity to take wing and bring solutions.

When it comes to accountability, our members operate in what I would call a culture of frugality. They know what it is to work within a limited budget. That culture of frugality can provide confidence that incentives to encourage further giving will not be taken for granted. Nevertheless, we recognize the fraudulent soul of man, as it were, and the need for accountability. Audits and other tests of integrity remain a necessity, and the Canadian public has every right to insist on the highest standards.

We bring six recommendations to the standing committee.

First, we recommend that the current tax treatment for donations of publicly listed charities be extended to donations of real estate.

Second, we recommend that the charitable tax credit for individuals increase from 29% to 42% on all charitable donations. We're of the view that this measure would work to increase support from core existing donors. It is a straightforward adjustment that will stimulate and foster a healthy civic core of generosity.

Our third recommendation has to do with publicly listed securities. It is that donations of publicly listed securities eligible for the capital gains exemption should be given a charitable tax credit of 42% on the adjusted cost base and continue with the existing charitable tax credit of 29% on the capital gain.

Our fourth recommendation came up in our request of our membership when informing them that we were going to be here before this committee. Some of them noted that there was a lot of bureaucracy, a lot of red tape, when it came to the churches being involved in overseas work. One of the ideas that has come out of our initial discussions with our membership is to look at the whole issue of the need for agency or joint ministry agreements for any amount that goes overseas. That, they feel, is problematic because it increases bureaucratic red tape and because of the need for greater efficiency. So we're recommending that the committee consider looking at some kind of threshold whereby charities could be involved in overseas work with a limited amount of paperwork. We're suggesting 1% of the annual revenue of the charity.

Our fifth recommendation is to extend the five-year carry-forward rule to seven years or more.

Our final recommendation is that we are supportive of further dialogue between the government and the charitable sector about charity involvement in for-profit social enterprise. We recognize that it is complex, given the sector’s diversity and the multiplicity of options, but we would certainly be supportive of the idea of more careful study about what can and cannot be achieved through reviewing this government policy.

Thank you, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll now hear from Cardus, please.

[Michael Van Pelt, President, Cardus]

The great issue of our day is whether we can order our world with flourishing institutions apart from governments and the markets. This is the very key question behind the very taxing issue facing this committee. The future of charitable giving and the vibrancy of the charitable sector will be influenced more by social and cultural conditions than by the limited tools of government. Tax incentives are only one such tool, but they are a powerful tool, and we must use them in the best way we can.

The charitable tax credit is one of the most successful tax credits ever implemented. It is a $2 billion investment that may be our most effective lever to animate more than 80,000 charities across Canada. It is less than 1% of the whole federal budget, yet it's treated like the oil of Elijah that the ancient texts suggest never runs out.

The numbers speak for themselves. In 2005, government expenditures for the charitable tax credit were $2.26 billion. In 2011, it was less than $2.26 billion. Over that same period of time, Canada's population increased by two million, and the incomes of Canadians increased. Additionally, Canada's demographic bubble would suggest that giving would be at a dramatic high. Indeed, in 2008, the government estimated that charitable tax expenditures for 2010 would be slightly less than $3 billion. Clearly, it expected Canadians to give more. We can all see the arithmetic on the wall. Unless Canadians have greater motivation to give, something in the charitable sector is going to give.

So here's my appeal to you. When you have the oil of Elijah, and it will cost less than $1 billion to keep it flowing, prudence demands that tax expenditure happen. The way to do this is to raise the charitable tax credit, ideally from 29% to 42%. It's simple. It's bold. It's straightforward. The public understands it.

I had the privilege of sitting on Minister Diane Finley's advisory council for social partnerships. We advise the minister on social enterprise initiatives to leverage the work of government and others. If we discovered a $3 billion idea that could act as a powerful fuel cell for every charity across the country, we would be leaping for joy right over to Minister Flaherty's office, with every confidence that it would be right up there in the highlights of the upcoming budget.

What I'm really talking about is a strategy to shore up the great work of Canada's civic core—a small but amazing part of our society. What I'm asking you to do is to tell the participants in the civic core that government is behind them and will help them do even more. In the meantime, the deep social and cultural questions that really motivate our care and love for our neighbour must become the next great debate in our country. If it doesn't happen, tax incentives won't help.

There are many great ideas out there to complement Cardus's strategy. There are also some that, unfortunately, do not measure up. I respectfully suggest that the stretch credit is such. As it stands, it is not a policy that is material to the whole charitable sector. It will generate limited dollars. It's too experimental. It is biased toward the spontaneous giver rather than the planned giver. Getting your young, male Bay Street lawyer to donate more in one year than he spends at the pub with his buddies on Friday night is a cultural task, not a tax strategy.

Attracting new donors through tax incentives is a stab-in-the-dark strategy. Everyone who raises money, and that's all of you around the table, knows that the best way to receive a donation is to ask someone who already donates. And except perhaps for Canada's charitable-giving leaders, who live in Abbotsford, B.C., Canadians already have much more room to give.

In contrast to the stretch credit idea, Don Johnson's plan for the removal of capital gains on the gifting of real property is a great idea. It's easy to do. Extending to privately held shares needs a lot more work. Another drawback—the giving of capital already receives more benefit than the giving of income, a disincentive to those who have no appreciated capital to give. Maybe it's time to send an encouraging message to the middle class that their charitable works are worthy of acceptance.

Cardus has done extensive research on the nature of generosity, on the health of the civic core, and on the importance of institutions mediating between government and the market. It is our considered opinion that increasing the charitable tax credit is the best idea of the ideas on the table.

Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now go to Mr. Bird, please.

[Ian Bird, President, Chief Executive Officer, Community Foundations of Canada]

Thanks, Mr. Chairman. It's good to be back here.

I'm just going to talk briefly about the thought process we've gone through to bring you some ideas.

Each of you will know of your local community foundation, whether you're on Salt Spring Island, in Burlington, Edmonton, or where have you. There are 180 of them.

As we in the community foundations network thought about this, one of the interesting outcomes was the recognition that actually, it's not about us. The conversations you're having, the debate you're having on Mr. Braid's motion, and the background of it is not so much about the institutions, some of whom are here. And you're hearing from others. It's about the public policy goal you're trying to achieve. It's about the Canadians with whom you're trying to connect. And the question has been well framed: how do we stimulate, through tax incentives, activity behaviour by Canadians?

I know some of you from previous work, when I was working in the sports field, when we looked at the children's fitness tax credit, which, similarly, was about stimulating a kind of behaviour. I think that's instructive in your discussions.

It's not about us, per se. It is about the public policy goal and how we might take advice from what we know of our past.

In Mrs. Glover's riding, in Winnipeg, there's a very successful organization that started because a gentleman, about 90 years ago, made a very generous gift of $100,000. That was a lot of money 90 years ago. William Alloway was the founder of the Winnipeg Foundation. If you read the story of the Winnipeg Foundation, you'll learn about Mr. Alloway.

We know about much of this. In fact, this committee, and previous iterations, and Parliament itself, and in turn the government, have put in place incentives to encourage that kind of gift, built from an asset, built on the back of publicly listed securities. But 90 years ago, this was a very generous gift.

The story that's less well known is the second gift. This was a gift of three $5 gold coins by a widow. Three $5 gold coins, $15, the widow's mite, was a significant gift for her. In Michael's point of view, this was a civic gift. This was not a gift of wealth. This was a civic expression by someone of very limited means who understood that everyone has a place to give.

The unfortunate circumstance is that the founding story of Winnipeg has been one of decline, in a sense, ever since. We have a declining circumstance in Canada. There is declining optimism in our communities among charities and non-profits about their ability to deliver. Services are declining. Participation.... After a few days of doing this, you now know the numbers. I don't think I need to repeat them. You know that there is declining capacity to fulfill the obligations citizens have for one another.

That decline is happening at the same time as you're faced with the pressures of balancing budgets, and the importance of it not only for the federal government but for provincial governments and municipal governments. In a time of decline, what kind of response will Canada have? That's the place we've landed.

Then we stood back and we said, “In that circumstance, what does it call upon Canada to bring forward? How shall we collectively respond?”

Given the many fair proposals on the table for the further distribution of assets from private shares or for increasing the charitable credit or the stretch tax credit, and there are others that are all fair and valuable contributions to the debate, we asked what we should do now. Our answer to that, in fact, is the stretch credit. The reason is that there are 24 million tax filers. There are 24 million Canadians, and there are some five million, or thereabouts, who are currently participating in the benefits that come from the charitable credit. We need to close that gap. Any kind of economic action plan that ought to be taken up should invite constituents right across the country, in each community, to participate and make a contribution.

In fact, this has been recognized by the opposition benches in their support for the finance committee submissions.

Given that the committee will take its leave soon to study other matters, I would encourage the government side of the committee, in their conversations with the Minister of Finance, to recommend the adoption of the stretch in this year's budget. It's the right time for this measure to be put forward.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll hear from Mr. Robinson now, please.

[Peter Robinson, Chief Executive Officer, David Suzuki Foundation]

Thank you, Mr. Chair, for inviting me to present to this committee.

If I may, I will start by saying that my wife, who is at home alone in Vancouver, asked me to wish all of the members a Happy Valentine's Day.

[Voices]

Oh, oh!

[Peter Robinson]

My name is Peter Robinson. I have been the CEO of the David Suzuki Foundation for the past four years. DSF is a charitable environmental organization whose purpose is to undertake scientific research and communications.

I'd like to preface my comments today by noting that at the moment there is almost as much discussion about charitable organizations occurring at two other federal panels as there is here, and that would be at the House Standing Committee on Natural Resources and the joint review panel on the proposal to build the Northern Gateway pipeline.

I say this because I believe it shows that there is a role the government can play to do a better job of educating Canadians about what are the eligible activities that charities can engage in and to more clearly recognize that charities play an integral role in democratic discussion in this country through the provision of accurate and timely information.

Our written brief fully supports the encouragement of charitable giving in this country by increasing the federal charitable tax credit and extending capital gains exemptions to private company shares and real estate, so I'm going to focus instead on some comments that I've already read in the transcripts on transparency in reporting international funding and on the issue of advocacy.

I'll begin with the issue of transparency in reporting, because I believe the public should be able to know more about the organizations they are intending to support, and this would include more information on gifts from foundations, both domestic and foreign. Much of this information is already posted on CRA filings, which points out, perhaps, that the problem is not with the information but perhaps with how it is accessed and interpreted. Frankly, there should be even greater concerns about the lack of transparency regarding private sector funding of corporate lobbying, which is completely invisible to the Canadian public now.

Switching to the topic of international funding, there has been considerable discussion lately about U.S. foundations funding Canadian charities. Much of it has been negative. Some of these recent discussions have been about Canadian environmental organizations. But the bulk of giving from U.S. foundations—75%—is for education, health care, and social services, funding that is an important contribution to Canadian democratic society.

DSF itself receives, on average, 93% of our revenue from Canadians, 6% from the U.S., and 1% from other countries. For the last three years, this international funding has been almost exclusively for projects related to scientific research on harvesting seafood and strengthening marine planning systems on the west coast. This work demonstrates how environmental issues really know no boundaries.

So if the committee is concerned about encouraging charitable giving, then enabling contributions from outside of Canada is actually quite critical. Restricting international donations could lead to a reduction in the amounts available to Canadian charities, and this might undo many of the enhancements proposed through tax credits and capital gains exemptions.

That leads to my final point about the role of charities and advocacy. I noted earlier our scientific research on seafood issues. This type of work often leads to actions directed at strengthening government policy to protect the environment.

CRA policies acknowledge that charities “are well placed to study, assess, and comment on...government policies” and that “charities may...advance their...purposes by taking part in political activities”. Such activities must, of course, be non-partisan, and “substantially all”—90% of the resources of an organization—must be devoted to the charitable actions.

When DSF calculates these political activities, which it has to do on an annual basis, we include the number of hours that staff spend on these actions as well as all other direct costs. They have always been less than 10% of our total operating costs.

I'd like to conclude my comments today by asking that the committee keep in mind that governments need information from charitable organizations in order to formulate policies that accurately reflect the diverse needs and opinions of our citizens. I'm very pleased, Mr. Chair, that this committee is seeking ways to strengthen civic engagement through charitable donations.

I look forward to your questions later.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now hear from the Evangelical Fellowship of Canada, please.

[Don Hutchinson, Vice-President and General Legal Counsel, Centre for Faith and Public Life, Evangelical Fellowship of Canada]

Thank you, Mr. Chair and members.

You should have before you a copy of the Evangelical Fellowship of Canada's 10-page submission, entitled “Families, Compassion & Charities: Key Components to Maintaining a Strong Canada”, arising from our pre-budget submission.

The EFC is Canada's national association of evangelicals, with our 39 denominational affiliates representing half of Canada's four million Evangelical Christians. We are convinced, from a review of the giving and volunteering patterns of Canadians, that the number one way to sustain and increase charitable giving is to put more money in the hands of Canadian families.

Families are facing mounting pressures in the midst of a challenging economy. Many have experienced increasing expenses while wages have been frozen or salary increases have failed to keep up with inflation. As a result, several of the steps taken by the Government of Canada to support Canadian families are or will be out of reach for many, particularly single-income families. Current tax laws require single-income families to pay up to 37% more in taxes than dual-income families.

The government has promised to implement the family tax cut when the budget is balanced in four or five years' time. Canadians need the tax relief today.

The families that will most benefit from such relief are also statistically the families that give the greatest percentage of their income to Canadian charities. We encourage the government to implement the family tax cut immediately and to focus on expanding the initiative to a full family household income-splitting initiative.

The compassionate generosity of Canadians, individuals, charities, and government is highly regarded worldwide. The evangelical Christian community is actively engaged with the lives of people struggling with poverty and homelessness, both in Canada and internationally. The relationship-building and service that are undertaken are consistently offered on a non-discriminatory basis to those in need. Many efforts are entirely self-funded. Others take place in cooperation with the compassionate expression of Canadians through government funding and available tax incentives.

The Canadian Christian community has long been a leader in caring for the less fortunate in Canada, from church groups inspired to serve sandwiches on the street corner to those providing refuge in extreme cold, or the operation of multi-million dollar addictions rehab centres, hostels, and food service programs. Love is shared in practical expression that meets human need.

We encourage the Government of Canada to continue to partner with these effective organizations, thus enhancing and encouraging the generosity of Canadians and maximizing the impact of government expenditures.

We also affirm the recommendations made in the 2011 all-party report of the human resources and skills development committee to establish a national poverty reduction strategy and to develop, in partnership with the provinces and territories, a national housing strategy.

Canadians are also recognized as being among world leaders in the international development and emergency aid community. The Government of Canada is encouraged to continue to work cooperatively with organizations that have positive impacts on the ground in foreign nations by continuing to provide incentives for Canadians to give, strategically matching donor dollars where appropriate, and reflecting Canadians' generosity in the financial expression of our federal government.

With all levels of government—school boards and municipal, provincial, and federal governments—talking austerity and restraint, it is increasingly important that the charitable sector be supported as we are called upon to rise to meet the growing needs for our services. Statistics Canada has identified six top reasons Canadians offer for making a donation: compassion toward those in need; personal belief in the cause; contribution to the community; being personally affected by the cause; religious beliefs; and the income tax credit.

Just over half say they would increase their charitable giving if they were given a better tax credit. Those who attend religious services weekly—or more—give three and a half times more to charity. Evangelical weekly attenders give 72% more to charity than weekly attenders of all faith groups. Evangelical groups are also giving 27% more to non-religious causes than non-Christians.

The positive charitable giving patterns associated with high levels of religious participation carry over into volunteering as well. Advancement of religion has long been recognized as a charitable purpose that means more than attendance at weekly church meetings.

Evangelical Christians understand reasonable worship to include both the church service and community service. For us, advancement of religion includes the ability to engage in the public square through the provision of benevolent services to others and the presentation, based on biblical principles, of positions on public policy matters and other issues of concern, advancing the good of neighbourhoods, the nation, and those in need around the world.

The EFC encourages the Government of Canada to give serious consideration to the tax credit proposals made by Cardus, Imagine Canada, and others to enhance Canadians' incentives to continue in their generosity toward others.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll begin members' questions.

Mr. Julian, please.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

I'd like to thank all members of our panel for coming forward today. We are familiar with the work of your organizations. You do wonderful work in the community.

I'd particularly like to underscore Big Brothers Big Sisters, the David Suzuki Foundation, and the Evangelical Fellowship, because I'm most familiar with your work.

Big Brothers Big Sisters makes a big difference in Burnaby—New Westminster. It's active in many schools and is helping a variety of children and youth.

The David Suzuki Foundation, with your environmental and health-related work, makes a big difference in British Columbia.

For the Evangelical Fellowship, I'm familiar with your work in StreetLevel and in highlighting the growing concern around growing poverty and homelessness in this country.

We'd really like to compliment you for coming forward today and for the work you do every day.

I'd like to start by asking about the stretch tax credit, because that's something we've been discussing as a committee. There have been some evaluations of what that might mean, both in terms of government support, but also ultimately in terms of stimulating the charitable sector.

I'd like to hear from each one of you if your organization has done some sort of evaluation or projection of what a stretch tax credit would mean to increasing donations—both the number of donors and the overall resources that are available to your organizations.

[The Chair, Conservative, James Rajotte]

Who would like to start this?

Mr. Robinson.

[Peter Robinson]

Only because no one else has put up their hand....

We did do some evaluation of the three primary proposals that have been put forward. We looked at the stretch tax credit. We felt it had its biggest impact on new donors and donors of modest incomes, but as you heard here earlier, most of the donations tend to come from those who are already giving. So when we looked at that further, we felt that of the three that are on the table, including the capital gains exemption for private shares and for real estate, the one that actually would have the biggest benefit for an organization like ours was actually on the real estate.

[The Chair, Conservative, James Rajotte]

Mr. Bussey.

[Barry Bussey]

As far as the Canadian Council of Christian Charities is concerned, we considered it as well, and we have some concerns. Most of those who give to the church community tend to be those who give on the basis of principle, you know, religious conviction and so forth. We are uncertain as to how exactly the stretch tax would help us in that regard. When we looked at it, we were of the view that it was going to be complicated, so as an organization, we proposed the increase of the tax credit as a whole, rather than the tax credit process.

[The Chair, Conservative, James Rajotte]

Mr. MacDonald.

[Bruce MacDonald]

As an organization that has all these branches across the country, our feeling, as we've looked at this, is that because our core competency in terms of driving revenue really has come from the corporate community over the years, a real new area of growth for us is in mission-based individual givers. On the idea of attracting new donors from existing donors—and we realize that many of these people are already giving to other charities—having an additional incentive to make a larger gift or a new gift was for us one of the reasons why we felt the stretch tax credit was appealing.

[The Chair, Conservative, James Rajotte]

Mr. Van Pelt.

[Michael Van Pelt]

I think there may be two things to assist you in this kind of consideration.

Number one is the investigation of existing research to actually illustrate that a tax strategy is the best tool to attract new donors into the charitable world. At Cardus, we don't know of any solid or substantive research that actually makes that argument, that proves it.

We know by experience that the charitable tax credit itself prompts donations. That's not in question. So I think the first piece would be to look for research, if it's out there. We have not been able to find the research that proves the ability of a tax measure to attract new donors. It's our sense that this is a cultural issue. To attract new donors is more of a cultural issue than it is a tax strategy.

The second is a question about whether it's material to the whole charitable sector. On the stretch credit, the challenge with it—and remember, if you just increase the charitable tax credit itself, you accomplish the interest of the stretch credit as well—my sense is that the dollar amount the stretch credit will raise is not going to be significant to the challenge that the charitable sector is actually dealing with.

In a way, by acknowledging the stretch credit, we're saying “here's the solution”, but it's a solution to a very small part of the problem. We already know that tax measures are only one small piece of the solution. Why would we employ a tax measure like the stretch credit that just simply is not material enough to capture the enormity of the challenge we're dealing with?

[The Chair, Conservative, James Rajotte]

I have two more who have comments, but we are actually well over Mr. Julian's time. We will come back to this. I know that it will be a common theme throughout this study.

I am going to go to Ms. McLeod now.