Finance Committee on May 8th, 2012

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

I understand, but—

[Mark Blumberg]

—we live in a democracy and people are entitled to have their views. Some people don't have much money and aren't able to really express those views very much. I think it might even be helpful to have a level playing field that anyone who wants to—

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

With respect, that was not my question, and it is my time to ask the questions.

I understand how you feel and I understand that some people don't have much money, but they are not Canadians. I have no problem with Canadians interfering with Canadian policy. I'm talking about foreign foundations, foreign groups, and up to this time.... You're nodding your head, so is it fair to say that you would agree with that statement that there are foreign groups that come into Canada and try to put their policy on Canadians with foreign money? I think it's fairly obvious to most people.

You have not seen anybody.... You have not heard Vivian Krause give evidence that based on her research there are foreign foundations, American foundations and others, that are funding environmental groups, for instance, in Canada? You have not heard that?

[Kate Bahen]

In the work I've done over six years, I have never seen a foreign foundation influencing Canadian policy.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Are you talking with lobbyists? I have that every day.

[Kate Bahen]

That's just my work experience.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Would anybody disagree with that comment?

[A voice]

Which one?

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

The one in relation to foreign foundations being involved in Canadian politics.

[Mark Blumberg]

There's no question that foreign foundations...I've seen a few of the 990s, the form in the U.S., and they disclose that they are involved in funding certain public policy and political discussions, not only in Canada but in other countries around the world.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

That's all I was asking. I think it's a fairly simple thing.

Now would you agree they should be transparent in relation to where they're getting their funding and where they're putting it?

[Mark Blumberg]

I have no problem with that.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Does anybody else have a problem with that? I can't imagine somebody having a problem with that. Canadians pay billions of dollars to direct their policy in Canada, through electing their politicians, and certainly we get “de-elected” if they don't like our policy.

They're working directly against taxpayers' money and receiving a tax incentive to do so. It seems like a tax advantage to do so, and certainly it seems fairly straightforward, from my perspective, that they should be at least transparent in relation to where they're getting their funding and where they're putting their funding. That's all I'm suggesting.

[Mark Blumberg]

I would just suggest that right now every Canadian charity that receives foreign money has, for the last three years, had to disclose that it receives foreign money. You can always ask more questions. But I would point out that non-profits have to disclose nothing.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Agreed. I was lumping non-profits in there. I think it's clear that they should at least disclose and be accountable to Canadians and be transparent. I see you're nodding and agreeing with me, that's fair to say. Unfortunately, the mike doesn't pick up your nod, but you would agree.

The next question I have is in relation to the 10% of the people who give 90% of the funds. I have heard on a continuous basis that there are a lot of Canadians who give a lot of money, but very few people give a lot of the money. That's correct, right?

How would you encourage that 10%, ignoring the 90% who give small amounts, to give more money and to be encouraged to give more money?

Ms. Dodd, please.

[Mary Dodd]

The stretch tax credit certainly will help, without question, at the grassroots level. In order to generate significant donations, you need to tap into some of the wealth that everyday citizens have, the grandmothers and parents who have cottages that nobody wants. That's an opportunity for wealth transfer, an opportunity for them to invest in the future of health care, for example, or in another charity, rather than waiting until their death and it gets dealt with as part of the estate. Ordinary citizens have a great deal of capital, if you will; through tax incentives, you can liberate that capital.

We saw that with the capital gains exemption. We virtually received no gifts of stock prior to the implementation of the capital gains exemption because there was no advantage to giving cash versus giving stock. With the implementation, everyday citizens started giving donations.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Are there any other ways any other witnesses would see to encourage that? For instance, there was a limit of $500, and you received more. I would suggest if you moved that number up to $10,000 and had more of an incentive, wouldn't that work with the larger donors?

[The Chair, Conservative, James Rajotte]

We're out of time.

Would one person want to answer that, please?

Mr. Cloutier.

[Michael Cloutier]

One of the recommendations we've put forth, we believe, will do exactly what you're looking to achieve.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go to Ms. Nash, please.

[Peggy Nash, NDP, Parkdale—High Park, ON]

I'll be splitting my time with Monsieur Caron.

I have one quick question to Mr. Blumberg. Just picking up on Mr. Jean's comments about foreign organizations, under the budget implementation act the government has tabled, the minister has the power to decide if an organization is carrying on activities in the national interest of Canada.

My question has two parts. Is there a similar requirement, that you know of, in other countries, the U.S., the U.K.? How would the government make that determination, in your view?

[Mark Blumberg]

I think the Globe and Mail had an article on this yesterday, and it got the whole thing wrong. Basically, this has nothing to do with foreign funding of Canadian charities. This has to do with the issue that there is a category of foreign groups that will be considered qualified donees. If a Canadian donates to them, it results in their getting a tax incentive, as if they had donated to a Canadian charity.

I welcome the cleanup of that thing to make it more clear, what it applies to. Before, it wasn't clear how Bill Clinton got his foundation in, how some other groups got in. There were nine groups on that list, with no clarity. Now there's clarity.

I'm hoping that Finance and CRA will come up with a list of some very good, reputable foreign organizations, put them on the list, either because they deal with emergencies or because they deal with other things in the national interest, and then Canadians can donate to those foreign entities. That's really all it is.

It's not related to the political issue. It has to do with the fact that right now there are only nine foreign groups on that list. Hopefully, there will be more so that Canadians can donate directly.

[Peggy Nash, NDP, Parkdale—High Park, ON]

I understand that. The determination, though, is up to the minister, as opposed to an independent committee or an outside organization. Do you think that's appropriate? How would they determine that?

The other part of the question earlier was, is there the same requirement in the U.K. and the U.S.?

[Mark Blumberg]

They have different systems in the U.S. and the U.K., so you can't really make a direct comparison. But what I would say is this. I am hoping that there will be more international philanthropy, and that category can become more fulsome. Instead of nine charities, I hope there are a few hundred that will be on the list. How they will determine it...they'll probably come up with policies. It requires both the CRA and Finance to work together to add groups to the list, and hopefully we'll have a little bit more of an idea of how groups get on it in a year or two, as opposed to the secrecy surrounding how they've gotten on in the past.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you.