I thank you for your invitation to come and speak to you today on behalf of Philantrophic Foundations Canada of which I am the president.
The Philanthropic Foundation of Canada speaks for Canada's independent and family foundations. Our members collectively manage almost $5 billion in charitable assets and give almost $200 million a year to many of Canada's 80,000 registered charities. Private foundations are major investors in the lives and activities of Canada's communities and charitable organizations.
Your paper on Canada's place in a competitive world refers to the fundamental importance of being prepared and proactive to meet the challenges facing a small, open economy. We couldn't agree more about proactivity and preparedness. This is what private foundations are all about, and I'm going to tell you a couple of stories about what they do.
You may have seen the news reports this summer about the unbelievable generosity of Warren Buffett, who pledged to give most of his fortune in publicly traded shares to the work of a private foundation, the Bill and Melinda Gates Foundation. As a smart investor, Warren Buffett decided that he could make the most impact on the lives of others by giving to a private foundation run by individuals he respects.
Would Warren Buffett make a similar gift if he lived in Canada? Almost certainly not. Through continuing taxation of gifts of publicly traded shares to private foundations, federal public policy today acts to discourage donors who give to private foundations.
We are here today to argue that the government should proceed urgently to eliminate capital gains taxation of gifts of public shares to private foundations, as it has for public foundations. This will complete the incentive extended in the 2006 budget to donors to public foundations, which has resulted in the unlocking of substantial gifts of assets. Charities could benefit even more if the government didn't discriminate against donors to private foundations. We believe that public policy should encourage giving and not discourage the individual's choice of giving vehicle.
Why do private foundations matter in this country? How do they help Canadian citizens and communities meet the challenge of competitiveness? They are risk-taking, long-term, social investors. Their actions are complementary and essential to the actions of public policy makers.
Let me tell you a few quick stories to illustrate.
We know that timely access to health care is of major importance to keeping people healthy and productive. In Alberta, a private foundation, the Max Bell Foundation, is funding an evaluation of pioneering work to reduce wait times for hip and knee replacements. Without the foundation's intervention, the public health system would take much longer to identify workable approaches to this problem and create a successful model that can be copied everywhere.
We know that charities have to work hard to hire and retain great people. Most charities don't have the money or the time to invest in their own human capital. The Muttart Foundation of Edmonton has funded a breakthrough innovation by funding the work of a human resources consultant with clusters of charities in Edmonton and Calgary. Sharing the services of this consultant has allowed them to manage their people issues more competitively and, even better, reach more clients and deliver more services in local communities.
In Quebec, the Fondation Lucie et André Chagnon has launched an innovative and unique partnership with the Government of Quebec. The objective of the Quebec en forme project is to contribute to preventing poverty by helping economically disadvantaged children from four to 12 years of age succeed in school, primarily through physical activity and sport. Thanks to the exceptional partnership between the foundation and the Ministry of Health and Social Services and the Ministry of Education, Leisure and Sport, we have been able to influence somewhat the practices and policies of several stakeholders who are responsible for improving the wellbeing of children and their families.
In Nunavut, the Walter and Duncan Gordon Foundation of Toronto is creating the conditions for successful integration of Inuit and southern concepts of justice by funding the teaching work of an Inuit elder in Nunavut's very first law school. The foundation's investment is supporting the development of a much-needed new generation of young Inuit lawyers.
These are just some stories of why private foundations matter in this country.
The federal government said in May that it would look seriously at extending the tax incentive it has delivered to donors to public foundations. Why has it waited so long? Government officials say they want to address concerns about those limited situations in which donors of shares in public companies controlled by the donor could create a conflict of interest situation for a private foundation controlled by the same donor. We recognize the government's wish to be prudent. We have taken this concern seriously, and we have a proposal to reduce it by putting a limit on the number of shares that could be gifted in this particular situation in a given year. We believe this is a very workable solution that will be easy to administer and to comply with. The continuing unfair treatment of donors of public shares to private foundations must be addressed quickly. There is no reason not to move on it now, given the government's stated commitment to look at it seriously and in advance of the next budget.
In conclusion, we ask the committee to recommend the final elimination of capital gains taxation of gifts of publicly traded shares to private charities. The country will see immediate benefits in terms of greater charitable contributions and more productive and effective community organizations. This is an important part of our competitiveness as a country. Healthy and well-functioning communities are the building block of a more competitive economy. The actions of proactive private foundations lead directly to more prepared citizens and communities. This is a straightforward, relatively inexpensive way to bring about very beneficial changes to communities right across Canada.
Merci de votre attention.