Fairness in Charitable Gifts Act

An Act to amend the Income Tax Act (charitable gifts)

Sponsor

Ted Falk  Conservative

Introduced as a private member’s bill. (These don’t often become law.)

Status

Defeated, as of June 8, 2016

Subscribe to a feed (what's a feed?) of speeches and votes in the House related to Bill C-239.

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

This enactment amends the Income Tax Act to increase the tax deduction an individual is entitled to in a taxation year with regards to charitable gifts to registered charities.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Votes

June 8, 2016 Failed That the Bill be now read a second time and referred to the Standing Committee on Finance.

September 29th, 2016 / 4:40 p.m.
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Conservative

John Nater Conservative Perth—Wellington, ON

I want to begin by addressing the first two questions to Mr. Emmett and Mr. Cadieux.

I'm a big proponent of private members' bills. I think private members' bills have some of the most innovative policy ideas. I know that the current government thinks they are a backdoor way of legislating, but I think there is some great legislation brought forward through private members' bills.

I want to get Mr. Emmett's comments on Bill C-239, which was an act to amend the Income Tax Act and increase the value of donations to charitable organizations to be more in line with political donations, those 75% donations, in terms of tax receipts for charitable donations. How would that have affected the charitable sector and your organization?

Mr. Cadieux, we did have a private member's motion earlier in the spring. It would have “freed the beer”, in reference to the Gerard Comeau decision. I want to get your comments on how the loosening of interprovincial trade barriers would have benefited the restaurant industry.

Unfortunately, both those initiatives were voted down.

June 9th, 2016 / 11:05 a.m.
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Jean-Denis Fréchette Parliamentary Budget Officer, Library of Parliament

Thank you, Mr. Chair, and vice-chairs.

I would like to introduce my colleagues. With me today are Dr. Mostafa Askari, assistant parliamentary budget officer; Chris Matier, senior director, economic and fiscal analysis and forecasting; Tim Scholz, economic analyst; Elizabeth Cahill, financial adviser-analyst; and Jason Jacques, director of fiscal analysis.

Thank you, committee members, for this invitation to appear and for the opportunity to discuss our recent reports. Since our last appearance before your committee on April 19, we released eight reports, including two analyses last week on the cost estimate of private members' business, Bill C-239 and Bill C-241. These two studies were done in the context of your committee's routine motion requiring the PBO to conduct a detailed and comprehensive costing analysis of selected private members' business appearing on the order of precedence.

Since yesterday, Bill C-239 is, of course, no longer on your agenda.

Since the committee’s notice of meeting also refers to our recent reports and since those cover a wide range of topics, I will stop there, Mr. Chair.

Fairness in Charitable Gifts ActPrivate Members' Business

June 8th, 2016 / 3:20 p.m.
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Liberal

The Speaker Liberal Geoff Regan

Pursuant to order made Tuesday, June 7, 2016, the House will now proceed to the taking of the deferred recorded division on the motion at second reading stage of Bill C-239 under private members' business.

The question is on the motion.

The House resumed from June 7 consideration of the motion that Bill C-239, An Act to amend the Income Tax Act (charitable gifts), be read the second time and referred to a committee.

Fairness in Charitable Gifts ActPrivate Members' Business

June 7th, 2016 / 6:35 p.m.
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Conservative

Ted Falk Conservative Provencher, MB

Madam Speaker, I want to thank all the members for their consideration of my private member's bill, Bill C-239, the fairness in charitable gifts act. I know I have support in all the parties. I do not know how much support, but I know that all the parties have members who have indicated that they will support the bill, and for that I thank them.

It is an honour for me to rise in the House today to talk about my bill. I wish I could spend a bit more time talking about some of the information that was given here this evening to clarify some of the statistics and numbers. However, I do not have that much time, so I will stick to the speech I have prepared, and hopefully we can move this bill on to committee for further study to evaluate its merits.

This is a fair bill, it is a bill that would benefit all Canadians, and it is a bill that would foster a culture of generosity from coast to coast. The aim of the bill is to strengthen charities and encourage Canadians to engage with and promote charities. This is a non-partisan bill. This is not a bill for rich people. It would hardly benefit rich people or those who are making big donations. It is a bill that, for the most part, would help the middle class. That is something the government has said it is all about, helping the middle class, and that is what this bill is about.

The impact charities make across Canada, in all of our communities, is evident. It was most recently demonstrated during the recent forest fires in Fort McMurray. The lives of tens of thousands of Canadians were turned upside down. Yet through all that devastation, the Canadian Red Cross, the Salvation Army, and many other charitable groups rose to the challenge and were there to help.

The help from charities will continue. Long after the government, long after the cameras, long after the media are gone, the charities will be there to continue that good work to help the residents of Fort McMurray recover from the trauma. They will help them rebuild their homes and re-establish their shattered lives. Where would the residents of Fort McMurray be without these charities?

Bill C-239 is a bill that would inspire Canadians and foster a culture of generosity, a characteristic that I believe is central to our country and its people, a characteristic that has been evident in the support for Fort McMurray.

The bill would make it more affordable for Canadians to donate to charitable causes. Causes that do not get national media attention and do not catch the eye of the camera are often just as individually devastating to the people experiencing them as the fires in Fort McMurray. They just do not happen to capture the attention of the national media.

Every day, every night, right across Canada, tragedies happen. Folks lose their jobs, illness attacks, families are broken, and people's lives are shattered.

However, there is good news. The good news is that charities are there to provide food for the hungry, beds for the homeless, help for the hurting, support for the aging, and hope for the sick.

Where would we all be without charities?

Canadian charities do more than just that, though. They do more than just crisis intervention, more than just assistance to those folks who are needy. They conduct and advance scientific research. They promote medical research. They promote education. They promote care of our environment. The list could go on and on. Charities have also been instrumental in the resettling of refugee families. We heard from our immigration minister today the way charities right across Canada have ponied up, have come to the table, and are waiting for the refugees. They have made commitments to help settle these folks. That is what charities here in Canada do.

Yet despite all this good work they do and the incredible impact charities have on our lives, the fact remains that charities all cite a lack of funding as the number one reason for their inability to do more.

Canadian charities are faced with an aging and ever-declining donor base. In fact, the number of Canadians donating to charities and filing charitable donations on their tax returns has dropped from a high of 29.5% to 21.4% over the past 25 years. The donor base is declining, and that is something this bill would address.

The bill would incur a cost for our government. There would be a dip in revenue. However, what would cost even more and what we cannot afford is a capability gap in our charities due to a lack of donations.

When surveyed by Statistics Canada, 71% of Canadians stated that the number one reason they do not give is the lack of money. They simply cannot afford to give more.

How are we going to address that challenge?

Currently, the federal tax credits for political donations far exceed the federal tax credits for donations to charities.

As I am out of time, I would like to conclude by encouraging members in this House to support the bill and get it to committee where we can continue to study further its merits and make this happen.

Fairness in Charitable Gifts ActPrivate Members' Business

June 7th, 2016 / 6:25 p.m.
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Conservative

Jim Eglinski Conservative Yellowhead, AB

Madam Speaker, I am pleased to be here today to speak to Bill C-239, the fairness in charitable gifts act.

I would like to congratulate the member for Provencher on being chosen to be the first to introduce a private member's bill to the House.

I am very proud to be here today to represent my riding of Yellowhead, home of so many generous Canadians.

We have numerous charitable organizations: food banks, animal rescue centres, historical foundations, and art centres, just to name a few. These are located in every community in Canada. The bill before us is a great bill for all members of the House and their ridings. It would help every riding in this country.

The depth and scope of the non-profit and voluntary sector in Alberta has provided a wide variety of services to the communities. Non-profit and volunteer organizations touch virtually all aspects of our communities.

As was just mentioned, 8.5% of our gross domestic product is made by charitable organizations. There are more than 86,000 registered charities, 81,000 non-profit groups or corporations, and more than 750 community agencies. These all play very vital roles in our communities.

One of the most important things they do is to leverage volunteers from across Canada, millions of volunteers who put in countless hours helping our communities. There is no doubt of the generosity of the people in Alberta and the generosity of Canadians. It is so broad and wide.

I do not think anything could be clearer than what has transpired in Fort McMurray, Alberta, in the last month. Donations flooded into charities from across Canada. Hotels opened their doors, and people donated personal money, food, rations, and gas.

I would like to share a story.

Two days after the fire started, I was en route back to my riding of Yellowhead. I was stopped at the Toronto airport and having a meal. There was a lady sitting beside me and we started a conversation. I asked if she was coming or going, and she said that she was going. I asked her where she was coming from, and she said Fort McMurray. She was right in the heat of the fire, and was going home to Nova Scotia. She said that they ran from the camp, grabbed their vehicle with the fuel it had in it, and headed south. They ran out of fuel and were stranded, but lo and behold, a person came driving up in a pickup truck with jerry cans of fuel and gave them the fuel free. She said she taken aback by that.

I mention this story because of the generosity of Canadians. Canadians give. Maybe we can give back a little bit, and this is what the bill would do.

So far, as of yesterday when I checked on the computer, $125 million has been raised by Canadians to give to non-profit groups and charities for the Fort McMurray fires. It is $125 million that our government has to match, and it could be up to $126 million today.

It is very interesting to note how Canadians pulled together in all parts of this country to support services in their communities. It is the generosity of donors that makes these agencies work, such as the Red Cross, animal shelters, senior centres, and community groups.

However, over the last 25 years we have seen donations drop, and not by a small amount. We have seen donations drop by approximately 33% in the last 25 years, and that is a lot of money. Charities are suffering, and they need that money to operate.

The fairness and charitable gifts act would help. What is alarming to me, and it was mentioned earlier, is that there was more money given in campaign donations than there was to charitable organizations. I find it alarming that people will not give more to charitable organizations that look after people, animals, and communities in need. That needs to change. We need to give more money to these organizations.

Bill C-239 is a great initiative to level the playing field. The primary motivation for donating is the compassion and personal belief of most people. I think people want to give. Some people find it harder than others. Those who are affluent can give more, but if people get a tax benefit from doing so, even those who are less able will probably contribute some money. Bill C-239 ensures that people who want to give larger amounts will be able to. It would be much fairer.

It has been mentioned that it is the current government's desire to strengthen the middle class, giving more help to those who need it and less to those who do not. This is exactly what Bill C-239 would do: give more money to those who need it and less to those who do not and allow those who have more money to give more than those who do not. If we had a fair tax exemption program, as this bill is asking for, people would give more generously.

I have heard it mentioned across the floor that this tax benefit would cost $1.7 billion a year and would come from our national coffers. I am going to read a quote, which says, “increase the costs associated with tax credits for charitable donations by about [$1.7] billion a year, which would diminish the government's ability to pay for important public programs that Canadians rely on”.

Yes, it is a lot of money, and it may increase as time goes on, but we need to look at what the charitable groups and non-profit organizations in this great country of ours do for the communities they serve. If they did not exist and were not helping the needy, the hungry, and the homeless and offering different programs within their communities, the cost to government, whether it be municipal, federal, or provincial government, the $1.7 billion, would be a bit like that.

The government says that it will have a serious economic impact. Madam Speaker, I say to you that it would be a lot more serious if people were to stop giving to the non-profit and charitable groups, so we should encourage Canadians, who are so generous. We know that. Canadians are probably the most generous people in the world. Let us give them the opportunity to give more freely and more comfortably and give them a bit of a tax benefit for doing so.

Fairness in Charitable Gifts ActPrivate Members' Business

June 7th, 2016 / 6:15 p.m.
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Saint-Maurice—Champlain Québec

Liberal

François-Philippe Champagne LiberalParliamentary Secretary to the Minister of Finance

Madam Speaker, first of all, let me thank my hon. colleague for his great work on this private member's bill. We have enormous respect for the work that has been done by every member when they present private member's bills, and the member knows because we did talk to each other about how much l respect his work and how much I value his contribution to public debate in Canada.

However, life is about choice, and l will outline why, as government, we will not be supporting the bill, and I will try to explain to the member in the most respectful way what the reasons are for that choice.

We recognize the spirit and good intentions of Bill C-239, which amends the Income Tax Act regarding charitable gifts. Of course our government applauds the important work done by Canadian charitable organizations, as well as the generosity that leads Canadians all across the country to donate to charities every year.

That said, the government cannot support this bill for a number of reasons. The parliamentary budget officer estimates that if Bill C-239 were to pass, it would cost the government about $1.7 billion more in 2016, and $1.9 billion more in 2020. He estimates that the total annual cost of the tax credit for charitable gifts would be as high as $4.2 billion in 2016, which is an increase of nearly 68%.

In this debate, I think it is important to take into account the considerable cost of this proposal and the fact that tax incentives for charitable donations are already very generous in Canada. Canada boasts countless assets, and one of those assets is the generosity of its people. They are compassionate, tolerant and kind. They give countless hours of their time to just causes, such as welcoming refugees, serving meals to the poor, taking care of patients in hospitals who are far from their family, and taking care of the environment by cleaning up the shorelines of our lakes and rivers, for example.

Canadians' generosity is so huge that it accounts for 8.5% of GDP. That is more than Canada's auto sector or retail sector. These organizations have a role to play in Canadian society. They contribute to the quality of life in all our neighbourhoods, and they support communities. Basically, they are crucial to social cohesion. That is why the Canadian government supports them, in particular, when it comes to taxes.

First, registered charities are already exempt from paying income tax. Also, Canadian taxpayers and businesses that make donations to these charities are eligible for a tax break. Including all provincial tax deductions, every Canadian can get back, on average, 46% of every dollar donated above $200. Moreover, charitable donations can represent up to 75% of an individual's net income and be deferred for five years.

Federal support for charities is really important. At about $3 billion a year, it is among the highest in the world. Canadians are also very generous. In 2013, donations to charities and not-for-profit organizations totalled $12.8 billion Canadian.

I want to point out that even without a tax credit, Canadians are very generous, as we all know. Statistics Canada proved it in its 2015 general social survey. Ninety-one per cent of the time, Canadiens give out of compassion, and 88% of the time, they give because of personal belief. Only one-quarter of survey respondents said that they were motivated by the tax credit.

We can proudly say that Canadians are agents of change for their country. They are engaged in their communities, and they are politically engaged as well.

In 2003, changes were made to the political financing act to encourage Canadians to get involved in politics. It was decided that an annual limit should be set on personal contributions to a political party. Furthermore, the related tax credit must be claimed in the year in which the contribution is made. Unlike a charitable donation, the credit cannot be carried forward, and the maximum amount that may be claimed is much lower.

The charitable donation tax credit, with the limit of net income and the five-year carry-forward period, is much more generous for large donations. These are two very different types of donations, and there are two different deduction frameworks. The charitable donation tax credit and the political contribution tax credit have different objectives and are structured differently. The charitable donation tax credit is designed to encourage individuals to make larger donations to registered charities and other qualified donees.

This means that the higher the donation amount, the higher the tax credit. By comparison, the political contribution tax credit's goal is to encourage widespread public participation in the political process by giving generous tax assistance for small contributions to federal political parties and candidates. For that particular credit, as donation amounts rise, tax assistance goes down.

When developing tax measures, it is important not to compare apples and oranges. Studies have shown that if Canadians have to choose between making a charitable or a political donation, they prefer doing both. Canadians are politically engaged, and they expect the government to bring greater transparency, as promised. We committed to restore Canadians' confidence in the political system by proving to them that their vote counts and they play a part in shaping public policy.

The first step will be to engage in a nationwide discussion with Canadians on reforms to the electoral system. We will then establish a special all-party committee, which will make proposals for electoral reform. A good government is an open and transparent government. That is why budget 2016 includes $10.7 million over the next four years to organize activities that will encourage Canadians to participate in the reform process. Changes to the electoral system will result from an open and transparent process, which is what we promised and Canadians are calling for.

To serve Canadians, who are so generous, it is important that the government carefully scrutinize its expenditures and eliminate ineffective programs that do not or no longer meet our objectives. In closing, I would like to remind the House about our government's efforts to directly support this country's middle class. We have cut taxes for nine million Canadians, and we have introduced the Canada child benefit, which will be fairer, more generous, and simpler than what the former government put in place. We have invested in innovation, infrastructure, indigenous peoples, and youth.

In closing, this bill would increase the costs associated with tax credits for charitable donations by about $1 billion a year. This would diminish the government's ability to pay for important public programs that Canadians rely on. It would actually diminish our ability to invest in the country's future.

Fairness in Charitable Gifts ActPrivate Members' Business

June 7th, 2016 / 6:10 p.m.
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Conservative

John Nater Conservative Perth—Wellington, ON

Madam Speaker, it is an honour to rise today and speak to Bill C-239, the fairness in charitable gifts act.

I want to give a special thanks to the member for Provencher for bringing forward this important piece of legislation. It is a good bill and it is an important bill for Canadian charities. I personally am exceptionally proud to be the seconder of this piece of legislation and will be voting in favour of this private member's bill.

To begin it is important to review what the bill would do. Donations that are made to a charitable cause would receive similar tax treatment as donations made to political parties.

I firmly believe that Canadians are generous people. They give freely and willingly of their hard-earned dollars to support charitable causes in which they believe. With these donations, charities and charitable causes do exceptionally good work locally in our communities, across the country, and globally.

From time to time here in the House during statements by members, we have the opportunity to highlight some of the great charitable work done by charities in our ridings. I was proud to highlight the work of Big Brothers Big Sisters of North Wellington a couple of months ago and the hard work that they do to serve young people in our communities.

As a member of Parliament for a great riding, I often receive invitations to a number of charitable events supporting a number of different research funding opportunities, whether it is for research into deadly diseases or opportunities to help combat and raise awareness of violence against women.

Just last month I was driving through the small town of Monkton, Ontario, in the north part of Perth County, and I came across a group of three young kids hosting a lemonade stand. They were raising funds for the Canadian Red Cross to help those who had been displaced by the wildfires in Fort McMurray. That is the type of charitable giving and charitable opportunity that I want to see expanded across our country.

In the same vein, I was pleased to learn that the grade 2 class of Ms. Inglis-Eickmeier at Central Perth Elementary School in my riding were raising funds for the Canadian Red Cross and for those who had been displaced by the wildfires. They hosted a bake sale, but just raising that money alone was not enough for them. They wanted to do more, so they took to social media. Using the hashtag #KidsHelpYMM, they issued a challenge to neighbouring schools across the region to do their part as well to help raise funds for this important cause.

In Stratford, the House of Blessing, which was founded by Florence and Norman Kehl more than 33 years ago, helps to provide food, shelter, and clothing to those in need. They founded it on the simple motto and simple purpose “to serve those who are hurting and in need”.

We have so many great organizations and charitable causes in all of our ridings and it is incumbent upon us as parliamentarians to support them in any way we can. They struggle to raise funds, yet they persevere.

I have heard from a number of constituents across my riding in support of the bill. One constituent from Arthur in the Township of Wellington North wrote, "I kindly ask you to consider supporting this bill as it will be beneficial for many charities in Canada”. Another constituent in St. Marys wrote, “I want to let you know that I am in favour of this bill. Charities rely on donors and I believe that this will encourage more people to donate”. From Mount Forest a constituent wrote, “I urge you, as my member of Parliament, to help all charities with your support of this bill”. The bill has support among the constituents of Perth—Wellington, and members will find that the bill has support across Canada.

Often when we ask people why they do not donate, the challenge is that they cannot afford it. The bill would encourage those people to donate for the first time and encourage those who already donate to donate more. It would increase the size of tax credits available and make it more affordable for those who want to donate more.

Canadians would be surprised when they learn that the tax treatment of charitable donations is so different from that of political donations. It does not reflect our values as Canadians. Canadians do not believe that funding political parties should be more important and more lucrative than funding charitable causes.

Bill C-239 is an important step forward in supporting the many great charitable causes in Canada and making the Income Tax Act more fair. By increasing the value of tax credits given to Canadians for charitable donations, the House would be doing tremendous good for our country.

Raising the value of tax credits for charitable donations would have several benefits. First, it would lower taxes for Canadians who choose to donate their hard-earned money to support charitable causes. I believe that every member of the House would agree that we as the Canadian Parliament should reward those who donate to charitable causes.

Second, it would increase the likelihood that Canadians would donate to charities. We have seen how this has worked in the past. In 2013, our former Conservative government introduced the first-time donors tax credit. In that year we saw an increase of almost 100,000 Canadians donating to registered charities for the first time in six years.

Third, increasing the size of tax credits for charitable donations would make it more affordable for Canadians who already donate. Here is a simple example. Donating $200 to a charitable cause such as the Canadian Cancer Society or the Alzheimer Society would provide an average Canadian with a tax credit of about $30. Under this new bill, that same donation would receive about $150 tax credit. Donors could now donate that difference of $120 to the same charitable cause or to other charitable causes as they might see fit. It would give more benefits to Canadians in their donations.

This leads me to my fourth point. The bill would increase donation revenues for charitable organizations and charitable causes and enable them to further the good work they do in all of our communities.

Charitable organizations are an incredibly effective and efficient way to deliver help to those in need. In my own experience, I have often found that charities are more efficient in delivering services than is government.

Governments ought not always be the default source of services to Canadians. Governments should provide services when the private sector and non-profit sector have challenges in doing so. The recent example of the Fort McMurray wildfires shows the way in which we as a country and the government relied on charitable causes like the Red Cross to help deliver services to those in that region.

The bill would enable charities to provide more services to more Canadians and more people in need. The fairness in charitable gifts act is good for charities, it is good for donors, and it is good for government, and it will fix an unfair double standard in the Income Tax Act. My colleague from Provencher put it best: feeding a politician should not be more important than feeding a family.

I am extremely proud to support the bill.

Fairness in Charitable Gifts ActPrivate Members' Business

June 7th, 2016 / 6 p.m.
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NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Madam Speaker, I am very pleased to be able to rise again in the House to debate this bill. In fact, life sometimes hands us pleasant surprises. Between the time that I finished the first part of my speech on this bill, which as members know is on the taxation of charitable gifts, and the time I rose just now, something interesting happened; I am referring to the publication of the parliamentary budget officer's report on this bill. In fact, it is in line with the expectations I had for this bill.

Initially, the person who introduced the bill talked about the possibility that the tax expenditures associated with the bill could run into the hundreds of millions of dollars. The parliamentary budget officer was much more forceful in studying the scope of this bill. In fact, he said that by 2020, this bill could cost the Canadian government anywhere from $1.7 billion to $2 billion in lost additional revenue. This is not a detail; we are talking about a measure that fundamentally harms the country's finances.

We all know that the bill would modify the tax credit for people who make charitable gifts to make it similar to the tax credit for political donations. Instead of what is in place now, the exemption would be 75% for the first $400, then 50% for amounts between $500 and $750, and 25% for any amount above $750. The problem it that there is no cap mentioned in the bill. We know that political donations currently have a cap of $1,500. That is problematic because the parliamentary budget officer assessed not only the costs of this measure for the public purse, but also who would benefit from it, namely who makes charitable donations and is eligible to this tax deduction. His conclusion is that a large proportion of these donations are made by the 10% of the population with the highest income. In fact, those who earn $91,000 and over give six times more than average.

It is very important to make charitable donations and to support these organizations. During the previous Parliament, the NDP supported a number of these measures, including the first-time donor's super credit. However, at some point, we have to wonder how far we want to go with supporting these types of donations.

Since this is a private member's bill, we will have a free vote, but I think that the proposed tax credit disproportionately benefits people with high incomes who are in a much better position to donate.

The scope of this bill is different from the other measures we debated in the previous Parliament. I mentioned the first-time donor's super credit. The NDP supported other measures regarding tax benefits, for example, for donations of art, land, public assets, or shares. I think that going in this direction would be too much, not only because of the cost, but also because it would not necessarily generate donations, as much as it would support major donors who have the highest incomes.

We also have to wonder about something for which we have yet to get a proper answer. This tax credit is generally combined with a provincial tax credit. When you take the impact this measure will have at the federal level and add it to impact of the existing provincial tax credits, in some tax brackets, the tax credit would be higher than what would be paid in tax for this income. This would mean that someone could donate more and more to a charity in order to avoid paying taxes and to make a net gain.

This measure will support charities, but it will not be about a donor's commitment. The measure will be designed to allow people to pay less and get more.

Donations would no longer be made solely to satisfy charitable impulses, but for tax planning purposes. People would come out on top because the amount of the tax credit would be higher than that of the charitable donation.

That brings up some questions about how the Government of Canada wants to support various causes. If government revenues drop by between $1.7 billion and $2 billion, that is obviously going to affect public services eventually.

The fact that the government, guided by the public good, can make appropriate choices about how that money is allocated to public services makes that money much more important than a charitable donation to a particular organization selected by an individual. I am not saying that the causes themselves are not worthwhile. On the contrary, most of them are.

However, if we are talking about how to allocate up to $2 billion, decisions will have to be made about which services to cut, and the outcome could be bad for the public good.

That is why I will be voting against Bill C-239 at second reading. It would cost the public purse an awful lot of money; there is no cap on donations; we already have measures in place, some of them thanks to the former government, to encourage people to donate to charity; and there will be unintended tax consequences when people no longer make donations to causes they care about with no expectation of personal gain and being doing so for tax planning purposes.

Those are all of the reasons why I will be voting against the bill. I invite the member to address some of these major concerns in his reply.

The House resumed from April 11 consideration of the motion that Bill C-239, An Act to amend the Income Tax Act (charitable gifts), be read the second time and referred to a committee.

Fairness in Charitable Gifts ActGovernment Orders

June 7th, 2016 / 5:45 p.m.
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Conservative

Kevin Sorenson Conservative Battle River—Crowfoot, AB

Mr. Speaker, on a point of order. I think that if you seek it, you will find unanimous consent for the following motion. I move:

That notwithstanding Standing Order 93(1)(b): At the conclusion of the debate on Bill C-239, if a recorded division is requested, the division be deemed deferred to Wednesday, June 8 at the conclusion of the time provided for Oral Questions.

CharitiesStatements By Members

May 18th, 2016 / 2:10 p.m.
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Conservative

Ted Falk Conservative Provencher, MB

Mr. Speaker, many residents will eventually return to Fort McMurray, only to find that they have lost everything to the ravages of the devastating wildfire.

We can only imagine what they must be going through as their lives have been turned completely upside down, but through all the devastation, the Canadian Red Cross, the Salvation Army, the local churches, and many other charitable groups have been there to help. I often wonder where we would be without organizations like these.

In Parliament recently, I introduced the fairness in charitable gifts act, Bill C-239, which seeks to strengthen the charitable sector by increasing incentives for charitable giving. With this bill, donors to registered charities would receive the same generous federal tax credits that donors to political parties receive.

Bill C-239 would make it more affordable for Canadians to donate to charitable causes and, in turn, charities across Canada would benefit greatly as more dollars would be freed up for donations.

Let us continue to support the charities as they continue to support those in need.

Fairness in Charitable Gifts ActPrivate Members' Business

April 11th, 2016 / 11:55 a.m.
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Liberal

David Graham Liberal Laurentides—Labelle, QC

Mr. Speaker, I am pleased to have this opportunity to discuss Bill C-239, which proposes to amend the Income Tax Act to increase the tax deduction for individuals with regard to charitable gifts to registered charities.

First, the government recognizes that charities are vital to the well-being of our society. They touch the lives of all Canadians, inspire us through the arts, enlighten us through education, heal us through institutions and medical research, support us through hard times, and make our nation the caring and inclusive society that has earned Canada a world-wide reputation for compassion and a social conscious.

I am proud to say that Canada has one of the largest charitable and non-profit sectors in the world. Estimates suggest that Canada has more than 170,000 charities and non-profit organizations, making it the second largest in the world.

Approximately two million people are employed by these organizations, representing 11% of the economically-active population. The sector represents $106 billion, or 8.1%, of Canada's GDP, making it larger than our automotive, retail, or manufacturing industries.

Remarkably, more than half of the charities in Canada are run entirely by volunteers. Through their work, these individual volunteers are living proof that the dedication of one's time to improve the quality of life of people who need a helping hand is a cornerstone of a healthy civic life and a vital exercise in leadership. Volunteers are remarkable people who make a real difference in people's lives without seeking monetary reward.

At the same time, the government recognizes and supports the vital role that thousands and thousands of Canadians play in providing their generous financial support to the sector in recognition of its important work. To support Canadians in this charitable giving, the government provides tax incentives for charitable donations, which have been described as being among the most generous in the world.

For example, registered charities are exempt from tax on their income and may issue official receipts for donations received. Donors may use those receipts to reduce their taxes by claiming the charitable donations tax credit for individuals or the charitable donations tax deduction for corporations. Also, for most taxpayers who give more than $200, the charitable donations tax cut eliminates any tax payable on most donations and reduces other taxes payable.

Taken together, federal tax assistance for charitable donations exceeded $3 billion in the last fiscal year. Certainly, these incentives have an important role to play in supporting a strong and effective charitable sector in Canada.

Charities are also highly diverse in their revenue sources. Some depend primarily on donations from the public, some raise considerable income from fees, while others operate relatively from the support of businesses. Still others depend highly on funds from the federal and provincial governments. However, as we have seen, the most remarkable support for charities in Canada is from Canadians themselves.

According to a 2015 Statistics Canada General Social Survey, 82% of Canadians made donations to a charity or non-profit organization. Furthermore, only 26% of donors chose the income tax credit as a primary reason for making a charitable donation, while 91% chose compassion toward people in need, and 88% chose personal belief in a cause.

Canadians know that charities play a vital role in our communities and provide valuable services to Canadians. However, like Canadians—

Fairness in Charitable Gifts ActPrivate Members' Business

April 11th, 2016 / 11:45 a.m.
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Conservative

David Sweet Conservative Flamborough—Glanbrook, ON

Mr. Speaker, I would like to thank my colleague, the hon. member for Provencher, for bringing forward this bill to encourage Canadians to contribute more to our charities by ensuring fairness in how these contributions are treated as tax credits. More than fairness, this initiative would make a strong statement on how these contributions are respected and valued. There is so much good done by charities in every community across Canada that we as a civil society should be doing more, not less, to promote this.

The people of my constituency of Flamborough—Glanbrook and in fact all of the greater Hamilton area are well known for their generosity. They are above-average contributors to a wide range of local, national, and international charities and causes that make life better for their fellow human beings. I would refer to a comment published in a local newspaper editorial in December 2009 from the director of community relations at Mission Services in downtown Hamilton. He said, “Hamilton is the most generous community I've ever lived in. People have really responded despite the difficult economic climate”.

I see this first hand at hundreds of local charity breakfasts, walks, fundraising dinners and auctions that I attend on a regular basis in the greater Hamilton area. If people want to see how community-based organizations stretch a dollar to make a real difference in people's lives, they just need to tag along to one of these events or join me in serving dinners at the downtown Hamilton mission at Christmas and Thanksgiving. I know many hon. members from all sides and parties in the House can attest to similar experiences in their own communities on a regular basis.

This is why the model proposed by the hon. member for Provencher in Bill C-239 makes so much sense. It would lift up the contributions to charities doing outstanding work on a local, national, and international basis to an equal footing with donations to federal political parties. It is a simple notion that the hon. member has articulated well already: Why should feeding politicians be more important than feeding the hungry, or helping youth who are struggling with addiction, or providing the desperately needed funds for research that would find a cure for cancer? Cancer is something that pretty well every member of this House, somewhere among their families and friends, has been touched by. The answer is quite simply, it should not.

Built on the principle that donations to registered charities in Canada should get equal treatment to political contributions, what Bill C-239, the fairness in charitable gifts act, would do effectively would be to incentivize donations under $750 per year. Frankly, that is the majority of Canadians and it has the potential to have the greatest impact. To reiterate in a nutshell, and I know these numbers are familiar to members of the House, donations under $400 would receive a 75% tax credit compared to the current 15% on the first $200 donated, expanding to 29% on the next $200. Contributions between $400 and $750 would see a 50% tax credit versus the present-day 29%. Meanwhile, the portion of total contributions over $750 would see a modest incentive of 33.3% compared to 29%.

Members of this House and all Canadians can readily see why this would encourage greater participation of Canadians donating to registered charities at higher dollar amounts than they currently do. When we consider that the median level of donations to registered charities claimed on tax returns is currently $280, there is lots of room to grow, and lots of new donors to bring into the family of charities as well.

Why is this so important? One of the reasons is demographics. At a time when there is increasing pressure to provide social services of all kinds in our communities, there is a decreasing participation by Canadians as donors to charities. Fewer tax filers are making contributions. The average age of a donor is also rising. Just as our population ages and the need for many services increases, charities are struggling to meet annual fundraising targets. As my colleague has pointed out, we have seen a staggering drop since 1990 in the number of Canadians who contribute. Add it all up and the long-term trend is less than positive. With greater need, fewer resources, and an aging population, we need to stem this tide, and Bill C-239 is a practical solution to do just that.

This is particularly true when we consider the range of services, support, and medical research that the charitable sector does, and that this reduces the burden on government today and tomorrow. If we can reverse the charitable donations trend, we can help pre-empt a funding crisis in the future.

Is this good public policy? We can bet it is. Is it good economics? Absolutely, and here is why. It helps offset social spending by governments at all levels, freeing up resources for other priorities. It is also very effective because often the local organizations are the closest to the problem, understand the circumstances they are in, and therefore are best suited to help. They know best how to marshal the support of all local volunteers and show compassion in our communities.

We should also consider and review in the debate on Bill C-239 that the reinvestment in the economy of the tax refunds of Canadians has a considerable impact. We know this and it is well documented, especially when local charities stretch those dollars for maximum impact in delivering programs and real world solutions as mentioned earlier. That is why instead of asking whether we can afford to do this, we should really be asking ourselves whether we can afford not to do this.

In closing, I would like to come full circle and mention a few examples from my hometown.

I would like to talk about Liberty for Youth and Living Rock that are there day in and day out to take those youth who many people would write off saying they are not any use to society, to rebuild their lives and help them to be contributing citizens.

Threshold School of Building is another one that helps to educate youth who have not made better choices in their life so they can start at ground level on construction jobs and begin to build a career for themselves.

There is The Bridge and St. Leonard's Society that do a great job taking those who have been convicted of crimes and re-assimilating them, teaching them life skills, helping them to rehabilitate, get out and be contributing citizens in our society.

There is the Bob Kemp Hospice and Good Shepherd Emmanuel House where my own younger brother passed away this past summer during the election.

These places are funded by charitable donations, and they are there at a time of life when people are desperate for love and compassion. They are there to help every day of the week. They rely on those people who are generous to give.

The Salvation Army helps people with addictions. I was just in there the other day in downtown Hamilton. They have a trustee program for people who are recovering from addictions and do not know how to handle their finances. They can pay their rent, and make sure they have money at the end of the month, even though they are on social services. It is extraordinary, but the funding has just been cut. It needs more charitable donations in order to cover that. The hostel program helps those who have been struggling with addiction to get back on their feet. There are 12 separate rooms in the Salvation Army that are helping individuals get back out and reconnect with their families, and be contributing citizens in our society.

Flamborough Women's Resource Centre, Drummond House, and Interval House are helping women who have come across a family tragedy and are dealing with violence.

This past December, my wife Almut and I had the pleasure of serving breakfast on behalf of the Farmers’ Dell Co-operative Preschool fundraiser. This registered charity serves families in Binbrook and Upper Stoney Creek.

Binbrook Scouting Group is also very active, holding massive annual spring cleanup days every year. The group picks up mountains of garbage. It benefits from charitable donations as well.

There is one more that I think deserves special mention. Every year for the past 13 years I volunteered for the annual Ancaster Community Food Drive. Some years my wife and I have helped run routes and have collected food donations from doorsteps. Other times we have stayed inside and have worked six or seven hours just sorting food. I am always joined by Hamilton firefighters and members of the Hamilton Police Service.

The food drive is run with precision by an outstanding group of volunteers, not the least of whom is the energetic retired Ancaster High School guidance counsellor and teacher, Jan Lukas, who welcomes everyone with her bright smile.

The Ancaster food drive is a huge local success story. In its 23 years of operations, it is now approaching 1.5 million pounds of food donated and processed. This food goes to a number of organizations throughout the greater city of Hamilton and helps thousands of families.

I was heartened to learn that the food drive has grown so much over the years that they have now committed to a larger facility to be able to sort all the food that is collected during the food drive. It is simply amazing. While much of the food is donated without getting a tax receipt, financial contributions to the organization that underpin the food drive is what makes it possible.

I could go on and on, but I have limited time for debate. These are great examples of what happens when we allow people to have more opportunities to give, and we give them more incentive to do that. Bill C-239 does exactly that. I encourage all my colleagues to support this bill, to make sure we are giving help to charities, to make sure that we reach all those people who are less fortunate, and build our communities to be stronger ones.

Fairness in Charitable Gifts ActPrivate Members' Business

April 11th, 2016 / 11:35 a.m.
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NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

Mr. Speaker, I am very pleased to rise in the House today, not only because I want to congratulate my colleague from Provencher on his bill, but also because he spoke about the benefits and positives of his bill, as well as the more negative aspects of the bill. This is worthy of being discussed in the House. It is good that we have already had a conversation about this bill and that we can debate it, because everyone here agrees that charities do important and extraordinary work across Canada. Every day, in each one of our ridings, we can see the good work that these charities accomplish for their communities.

I thank my colleague for his initiative, since Bill C-239 is an important measure. It is important to examine this bill carefully before voting, since it can affect many things, including costs, for example. This bill could result in some costs to the public treasury, a topic that has come up today. We are talking about a major change to charitable donations and the associated tax credits.

My colleague compared these donations to donations to political parties. I have a hard time using that comparison, since there is a maximum annual amount one can donate to a political party and claim a tax credit. We need to take a close look at this cost. The tax credit for donations to political parties is 75% for the first $400, 50% for donations between $400 and $750, and 33.33% for donations above $750. This comparison can be made, but it is important to note that charitable donations are capped at 75% of net income.

Donations of $750 or more will represent a tax credit of 33.33%, up from the current 29%. It is therefore important to take into account that higher-value donations made in Canada, that is, those worth more than $750, will result in a tax credit worth 4.3% more. This tax credit will go into the pockets of the wealthiest people. I think we can all agree that those who donate more than $750 a year tend to be wealthy, since they have the means to do so. As parliamentarians, it is important for us to examine this situation, specifically the fact that part of these tax credits will go into the pockets of the wealthiest Canadians. It is fair to say that donations of $400 or less represent the vast majority of donations made in this country, and they generate a tax credit of 75%. I think it is also fair to say that most donations made by Canadians are under $400.

It is therefore important to look at the cost of this measure. That shows the importance of the decision we have to make when voting on this bill. Whenever bills are introduced, it is important to always consider the costs involved. A Library of Parliament study estimated that this kind of change to the tax credits would cost between $1.3 billion and $3 billion.

In this debate, it is also important to try to determine whether there really is a link between enhanced tax credits and an increase in donations. To date, no direct causal link has been established or quantified in terms of the value of tax credits and the quantity or value of donations that might be made if tax credits are enhanced. It remains to be seen whether this measure will have the desired effect. The outcome my colleague from Provencher is hoping for is clearly an increase in charitable donations. Of course, we encourage our fellow Canadians to give more and to support the charities in our ridings.

However, it is not yet clear to me that enhancing the tax credit would produce the desired effect. That is probably for the parliamentary committee to figure out with the help of subject matter experts. They will be able to examine situations in other jurisdictions where changes to tax credits may have had a significant impact.

In this study and in our debate, we must also look at other ways to help charities in Canada. Sure, tax credits count for something, but there are many other ways to help Canadian charities.

Part of the bill's preamble gives us pause, unfortunately. It reflects the sponsor's attitude, in a way. I would like to read from the preamble:

Whereas Canadian charities, both secular and faith-based, deliver critical social support for our communities and are well-equipped to remove some of the burden [I would emphasize “remove some of the burden”] placed on government social services;

I found that part of the preamble interesting. It reveals the sponsor's mindset, which I believe is wrong. It is not okay to say that the government should off-load government services and expect charities to pick up the slack. The government's main mandate is to provide high-quality, accessible, affordable services to all Canadians. In today's debate, we need to focus our attention on this notion of transferring the burden of government services to charities. We do not necessarily want a government that off-loads its responsibilities, strives to provide fewer and fewer services, and tries to wash its hands of certain things in our society.

Again, I wanted to talk about the fact that there is currently a limit to charitable donations of 75% of net income and that limit represents non-refundable tax credits. However, people who have the means could use this as a form of tax avoidance. We have seen that happen. In this debate, it is important to point out that people can use tax credits for charitable donations. There is no denying that the money goes to a charitable organization, but nor can we deny that some Canadian taxpayers might be tempted to use this enhanced tax credit for donations greater than $750 to their advantage. The tax credit for donations greater than $750 increases by 4.3%, and some people might try to use this credit to avoid paying their fair share of taxes.

I must say that the NDP has always defended tax fairness in Canada, where everyone pays his or her fair share and we can have a tax environment with a semblance of fairness. That is important. Given the revelations that we are seeing a growing number of taxpayers try to dodge their tax obligations, it is important for us to also have a debate on tax fairness in Canada. In fact, the government announced that it wanted to review tax expenditures. It is also important to have this debate on all tax credits available in Canada, which are a burden on the treasury. It is important to have a thorough review of our fiscal framework to ensure that it is fair and that people with the most means pay their share so that important government services can be delivered to the entire population.

This does not have to stop charitable organizations from doing good in their community. Let us not confuse the two.

I want to commend my colleague on his initiative. I look forward to discussing it at length.