Thank you, Mr. Chairman and honourable members.
We also are pleased to be here, and we welcome the opportunity to make this submission.
The CBA represents over 34,000 jurists, including lawyers, students, notaries, law teachers, etc. I'm here speaking for the charities and not-for-profit section, which has approximately 1,300 members, all lawyers or law students. We've had a long-term interest in tax legislation and tax policy, particularly as it relates to charities and not-for-profit organizations, and we have seven recommendations in our written brief. I'll touch on them briefly.
First and foremost, we echo what you've heard already from the Canadian Association of Gift Planners and Imagine Canada. We strongly recommend the extension of the relief for capital gains, the non-recognition of capital gains, on donations of marketable securities to private foundations. We also believe that should be extended to gifts of real estate.
From an administrative perspective, as we indicated last year, we also strongly recommend the setting aside of resources and a direction to the Department of Finance to simplify the rules in the Income Tax Act dealing with the disbursement quota and the monitoring of the expenditure of funds by registered charities that have been raised, with tax relief for donors. We see that as a serious drain on the sector because of the complexity and uncertainty.
There are some technical issues touched on in our brief that relate to current proposals in the July 18, 2005, draft legislation, including the concept of control for charities where significant donors give a lot of money. If they're deemed to control the foundation, it will be private, which is usually an adverse result.
We're concerned about holding periods. When you track the cost of an asset that's given, if it was acquired within three or ten years its cost becomes its value at the time of a donation. That's problematic where a property stays within a related group.
We also echo the recommendation about pursuing legislation to implement charitable remainder trust. They're a very useful vehicle for donors. We need legislation. The CAGP has taken the lead on that, and we would strongly recommend that this be pursued.
My final recommendation is a technical point, that non-resident charities be entitled to be treated as exempt organizations in Canada, even if they're charities. At present that's not possible because of a glitch in the law. We recommend that the rule be changed so that a non-resident charity, such as a foreign university that wants to come here, is able to seek exemption as an unregistered not-for-profit organization. Right now it can't do that because the Minister of National Revenue must express the view that it's not a charity, and of course that can't be done unless there are some extreme circumstances.
Those are my comments, Mr. Chairman.