House of Commons Hansard #133 of the 40th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was cost.

Topics

Opposition Motion--Documents Requested by the Standing Committee on Finance
Business of Supply
Government Orders

5:10 p.m.

Some hon. members

Agreed.

No.

Opposition Motion--Documents Requested by the Standing Committee on Finance
Business of Supply
Government Orders

5:10 p.m.

Conservative

The Deputy Speaker Andrew Scheer

All those in favour of the motion will please say yea.

Opposition Motion--Documents Requested by the Standing Committee on Finance
Business of Supply
Government Orders

5:10 p.m.

Some hon. members

Yea.

Opposition Motion--Documents Requested by the Standing Committee on Finance
Business of Supply
Government Orders

5:10 p.m.

Conservative

The Deputy Speaker Andrew Scheer

All those opposed will please say nay.

Opposition Motion--Documents Requested by the Standing Committee on Finance
Business of Supply
Government Orders

5:10 p.m.

Some hon. members

Nay.

Opposition Motion--Documents Requested by the Standing Committee on Finance
Business of Supply
Government Orders

5:10 p.m.

Conservative

The Deputy Speaker Andrew Scheer

In my opinion the nays have it.

And five or more members having risen:

Call in the members.

And the bells having rung:

Accordingly, the vote stands deferred until Monday, February 28 at the end of government orders.

Opposition Motion--Documents Requested by the Standing Committee on Finance
Business of Supply
Government Orders

5:15 p.m.

Conservative

Gordon O'Connor Carleton—Mississippi Mills, ON

Mr. Speaker, I ask that you see the clock at 5:30 p.m.

Opposition Motion--Documents Requested by the Standing Committee on Finance
Business of Supply
Government Orders

5:15 p.m.

Conservative

The Deputy Speaker Andrew Scheer

Shall I see the clock as 5:30 p.m.?

Opposition Motion--Documents Requested by the Standing Committee on Finance
Business of Supply
Government Orders

5:15 p.m.

Some hon. members

Agreed.

Opposition Motion--Documents Requested by the Standing Committee on Finance
Business of Supply
Government Orders

5:15 p.m.

Conservative

The Deputy Speaker Andrew Scheer

It being 5:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

The House resumed from November 19 consideration of the motion.

Charitable Donations
Private Members' Business

5:15 p.m.

Conservative

The Deputy Speaker Andrew Scheer

When this motion was last before the House, the hon. member for Elmwood—Transcona had six minutes left to conclude his remarks.

Charitable Donations
Private Members' Business

5:15 p.m.

NDP

Jim Maloway Elmwood—Transcona, MB

Mr. Speaker, the motion by the member for Kitchener—Waterloo reads:

That the Standing Committee on Finance be instructed to undertake a study of the current tax incentives for charitable donations with a view to encouraging increased giving, including but not limited to (i) reviewing changes to the charitable tax credit amount, (ii) reviewing the possible extension of the capital gains exemption to private company shares and real estate when donated to a charitable organizations, (iii) considering the feasibility of implementing these measures; and that the Committee report its findings to the House.

On the surface of it, I do not think we would have a problem supporting this particular motion but there are some observations that I would like to make about it.

The member indicates that the sector is a very significant part of the economy, that it employs over 1.5 million people, that it generates an estimated $100 million a year and that it represents 7% of our GDP, which is larger than the tourism industry, the automotive manufacturing industry and the agriculture sector. I was certainly not aware of that and I do not think a lot of people would be.

We have a number of issues that need to be dealt with, which is why it is a really good idea to conduct this study. As has been pointed out, there are a number of indicators, bad omens, showing that the number of donations actually dropped during the recession, which has put some pressure on some of the organizations.

There is also a need to cost the item because, with a $56 billion deficit, the government will need to look at dealing with a program to reduce and eliminate that deficit. I think we would want to know, before we approve it, how much revenue the government would be losing as a result of any changes that it would want to make.

I do want to mention an approach that I found quite exciting. It is what is happening in the United States with Warren Buffett and Bill Gates. Over the last three or four years, they have collectively gotten together and committed to giving away, while they are still alive, I believe it is half of their assets. Since they are worth about $50 billion each, we are probably talking about $25 billion each. More important, they have encouraged other billionaires to get involved in their club and quite a number of American billionaires have joined the club. I think they are on to something. They have certainly started something. They are both very interesting people, if members read about them.

Warren Buffett's attitude toward American capitalism is not what one would think. He is actually highly critical of most of the big corporate elites in the United States and the salaries they get. Warren Buffett, himself, is a man whose salary is $100,000 a year. He still lives in Omaha, although he does have some other houses, but he is easy to find when driving through Omaha. He is a hands on type of guy. He has decided that his children do not need all his money. The children will be well taken care of but they will not be given billions when their parents die.

Bill Gates seems to be taking that same approach. They have now enlisted, and I am not certain what their current numbers are in terms of American billionaires, but their goal is to give away half of their assets while they are still alive.

Bill Gates and Warren Buffett's charities are heavily involved in sending prescription drugs to Africa, which is a very commendable direction for them to be involved in.

I would encourage Canadian activity in this area. I do not know if there are any Canadian billionaires being invited into this group but it is certainly something that I hope gets a lot of encouragement.

We have indicated that donations dropped off during the recession. There is also the odd complaint about the salaries and benefits of some of the managers of the charities. There was an example in Toronto where the charity head was making very excessive amounts of money, in the opinion of some of the donors.

Charitable Donations
Private Members' Business

5:20 p.m.

Conservative

Joe Preston Elgin—Middlesex—London, ON

Mr. Speaker, I appreciate the opportunity to lend my strong support for today's motion, introduced by the member for Kitchener—Waterloo, to look at ways we can better support Canada's charities. I had the honour to second the motion.

Let me applaud the member for Kitchener—Waterloo for the great job he has been doing here in Ottawa for his constituents. Since his election in 2008, he has proven to be a strong advocate for members of his riding, ensuring that their interests are at the table, as well as contributing to the debate on national issues with great insight and innovative solutions.

He is building on that record with today's forward-looking motion that would have the Standing Committee on Finance conduct an in-depth study on how we could better support the great work of charities in Canada through our tax system.

The member for Kitchener—Waterloo has put forward a strong method for studying an issue, getting members together from all political parties, bringing together the best minds on the issues, bringing in all the charity groups, both small and large, holding public hearings and then coming up, after all of those consultations, with the best recommendations.

I understand that the members of the finance committee welcomed this idea and are more than willing to set aside time to look at this important issue. Indeed, all parliamentarians understand the importance of charities and their tireless work in communities across Canada. Every day, charities both large and small play an invaluable role in the daily lives of Canadians in need and much more.

As Ray Pennings of the noted social policy think tank Cardus observed in the Telegraph Journal recently:

Of Canada's 161,000 charities and non-profits, two-thirds report annual revenues of less than $100,000. Yet, they all combine to provide services, many of them essential, which enrich the social, physical, and spiritual lives of Canadians.

A strong charitable sector including universities, hospitals and hospices, arts and sports groups, poverty and publishing programs, synagogues and churches, provides ways for Canadians to be their best and show compassion to the least.

Charities are not vehicles for greed, excess or profit. They are the products of our generosity, kindness and creativity--vital components of a healthy society without which financial economies cannot thrive.

The recent global economic downturn also highlighted the vital role charities play in our communities and towns, especially in those communities that were harder hit. In recognition of that vital work, the study the member for Kitchener—Waterloo is proposing is the right thing to do. I know all parliamentarians agree that we need a healthy and strong charitable sector. That is something that benefits all Canadians.

I would also hope they believe we need to ensure charities, and the people who tirelessly give of themselves with those charities, have the right tools to keep doing the great work they perform in helping those in need. Canadians value the work of our charities through their generosity, both in time and in financial support.

Indeed, Statistics Canada shows that Canadians given approximately $8 billion to registered charities each year. What is more, over 80% of the population aged 15 or older will make a financial donation in any given year. Even better, nearly 12.5 million Canadians, roughly half of our population, will volunteer about two billion hours of their time to help charities in their communities. That is great to hear and we applaud all those Canadians who give of their time and some of their hard-earned money to support charities. Our Conservative government has understood the importance of encouraging and supporting those who give to charities.

The tax system provides many incentives for Canadians to give generously. The charitable donations tax credit is the most prominent and long-standing incentive in the tax system. The tax credit encourages charitable giving by providing higher tax assistance as donations increase. Specifically it forgoes 15¢ in tax revenue for every dollar donated up to $200, and 29¢ for every dollar donated above that $200 mark. Our Conservative government has built on that tax credit with further incentives to encourage increased giving to support Canada's charities.

Indeed, since taking office in 2006 we steadily have been increasing the generosity of the charitable donation tax incentives. For instance, in 2006 we completely exempted capital gains on the donation of publicly listed securities to public charities. We also extended the exemption of donations on ecologically sensitive lands to public conservation charities. In 2007 and 2008 we further extended the exemption of donations of publicly listed securities to private foundations and to certain donations of exchangeable shares. When those positive tax incentives were announced they were really very well received by Canadians at the time.

Community Foundations of Canada applauded it and exclaimed, “We all win when the government encourages people to give. This tax relief will be welcome news”. Philanthropic Foundations Canada also applauded it as well, remarking, “This tax change will spur donations and enable private foundations to do even more for Canadian communities”.

I am happy to report that in the years following the introductions of those numerous tax incentives the results have been extremely positive and the action effective. Indeed, listen to what was reported in the Toronto Star, which is no fan of our government, in January which I will quote at length: “In 2006, the federal government changed the tax laws to make donations of securities to registered charities exempt from capital gains taxes”.

“It has become much more accessible for the average donor”, said CanadaHelps' chief executive officer, Owen Charters. “We've been quite surprised by the popularity. It was small steps at the beginning, but it has really grown”.

Last year about $1.2 million in donations of securities went through CanadaHelps. That is up 65% from the year before, and it is an approach that is becoming more and more popular as more Canadians learn about the tax advantages.

Canadian hospitals, universities and charities have gained millions of dollars from donations of securities. “We're definitely seeing an increase in this type of giving”, said Julie Gorman, vice-president of resource development for United Way.

However, we realize there is much more to do. During the worst of the global recession we have seen the number of Canadians making tax supported donations fall. We have also heard concerns about the rising average age of Canadians making donations along with the fears that some Canadians may be falling out of the habit of donating. Indeed, as noted through the recent survey findings from Imagine Canada, a national organization representing Canada's charitable and non-profit sector, half of the charities surveyed felt some degree of financial pressure.

Clearly, we should take this opportunity, as parliamentarians, to determine what more we can do in a fiscally responsible manner through Canada's tax system.

The motion of the member for Kitchener—Waterloo provides an excellent opportunity for parliamentarians to do just that. Once more, it will allow us to do that by hearing directly from those involved in the good work of Canada's charities. I strongly support this motion. I urge all members to support it as well, and I applaud the member for Kitchen—Waterloo.

Charitable Donations
Private Members' Business

5:30 p.m.

Liberal

Scott Simms Bonavista—Gander—Grand Falls—Windsor, NL

Mr. Speaker, today, I rise in the House to speak to Motion No. 559, which directs the finance committee to study the tax treatment of charitable donations.

As vice-chair of the finance committee, I am pleased to have the opportunity to speak to this motion. Now when I say “vice-chair of the finance committee”, it is just an aspiration of mine, and sometimes I like to pretend I am, but I am really not. Nonetheless, I do want to respect the finance committee for bringing this to the House. I also want to thank the previous speakers for their speeches.

The size of Canada's charitable sector has been described as being as large as the economy of British Columbia. The federal government plays an important role in supporting Canada's charities. The federal treasury provides charities with both direct support through grants, and indirect support, in the form of tax credits on charitable donations.

According to the papers published by the C.D. Howe Institute in 2009, tax-receipted charitable giving in Canada has grown by 140%, from $3.6 billion in 1995, to $8.65 billion in 2007. In fact, it estimated that, in 2009, tax credits for cash donations cost the federal treasury approximately $2.2 billion.

Despite this growth in the total amount of charitable donations in Canada, the number of Canadians making tax-receipted charitable donations is actually in decline. This number has been declining for more than a decade. According to the C.D. Howe Institute, in 1990, 30% of Canadian taxpayers claimed a tax credit for a charitable donation, but by 2007, that number had fallen to 24%. So, charities are relying on an ever-diminishing base of donors. Not only is this unsustainable, but it leaves the charities more vulnerable to even small changes in the level of giving, as we have seen recently in the economic downturn.

On top of this, we are seeing a trend where donations are becoming more concentrated. Larger donations are being made to a small number of large charities and foundations ,while revenues for smaller charities are, in some places, actually in decline.

Imagine Canada, a national charitable organization whose mandate is to support Canadian charities and non-profits through both debate and consultation, has surveyed over 1,500 leaders of charitable organizations. According to Imagine Canada's most recent survey, about half of Canada's charities are finding it difficult carrying out their mission because of increased demand for their services, coupled with stagnating or declining revenues. They believe this increased demand is connected to the economic downturn.

In fact, about a quarter of the charities reported that their very existence is at risk because of the increase in demand that they are facing. It appears that many of Canada's charities, particularly of course our smaller charities, simply do not have the resources they need to carry out their mission.

The question we must ask is, what can the federal government do to improve the situation? It is a pertinent question, I would imagine. What are the policies that would encourage more Canadians to donate to a Canadian charity?

The finance committee is well situated to study this issue and hear from expert witnesses who can provide us with examples of best practices that Parliament may wish to consider. And a couple of ideas that are already on the table include: one, expanding the capital gains tax exemption for gifts of listed securities to include gifts of private company shares and real estate; two, introducing a stretch tax credit in order to stimulate new charitable giving by increasing the credit that would apply to donations exceeding a donor's previous highest giving level.

Malcolm Burrows has written about the first proposal in depth. Perhaps he is an expert witness that the finance committee may wish to hear from in the future. In his paper, “Unlocking More Wealth: How to Improve Federal Tax Policy for Canadian Charities”, Mr. Burrows estimates that the proposal would cost federal and provincial governments between $190 million and $440 million per year. While he generally argues in favour of the proposal, he also brings forward some potential challenges with the idea.

For example, he notes, “concerns about determining fair market value for gifts of taxable real estate. As well, real estate presents additional complexity and liability for charities, such as environmental issues, maintenance and property taxes”.

The finance committee may wish to examine this more closely. I would love to be a part of the finance committee and unfortunately I am not, but there are several things the finance committee could to work on this on behalf of all Canadians and certainly for the charities involved, as pointed out in some of the evidence I put forward.

I would be remiss if I did not point out some of the challenges that the committee is currently facing. Today's debate on the supply motion by the member for Wascana has concentrated on the Conservative government's refusal to provide the documents ordered by the finance committee. The committee has been trying to determine the cost of the government's justice bills and corporate tax cuts. It is certainly a challenge for the finance committee.

The government is deliberately frustrating the work of the committee. Despite the government House leader's intervention this afternoon, the Conservatives continue to refuse to provide the detailed costing information we have requested. They are falsely claiming that it is covered by cabinet confidence.

Section 69 of the Access to Information Act is clear. Detailed cost estimates for justice bills are no longer covered by cabinet confidence once cabinet has made a public decision to introduce the legislation. Therefore, the finance committee has requested a very detailed breakdown of the cost of 18 justice bills that have already been introduced in the House.

At 2 o'clock this afternoon, the government provided very little information on the cost of 13 of those justice bills and no cost for the remaining 5 bills. Clearly the information was not near enough to satisfy—