Evidence of meeting #38 for Finance in the 41st Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was charity.
A recording is available from Parliament.
Director, Personal Income Tax Division, Tax Policy Branch, Department of Finance
The tax expenditure report provides an estimate of the tax relief provided by the charitable donations tax credit in respect of donations of publicly listed securities. As well, it tries to break it down between the charitable donations tax credit and the reduced inclusion rate for capital gains.
We don't have the data, per se, to say--
Liberal
Scott Brison Liberal Kings—Hants, NS
But the term “tax expenditures” does imply, in some ways, a cost to the government. It implies, like any other line item in the budget, a tax expenditure as a result of that. If somebody had given their Research In Motion shares a couple of years ago to a charitable foundation, you may argue that there had been a tax expenditure, but if they had waited until more recently, looking at that historically, you could say that the charitable foundations benefited significantly and the taxpayer didn't lose anything.
I'm just saying that it's very important for this committee to consider not just this.... There's a theology, if you will, within the Department of Finance around tax expenditures and around tax leakage. I'm saying that it's very important for us to consider not just the tax expenditure figure, which in many cases does not--
Liberal
Scott Brison Liberal Kings—Hants, NS
--reflect the real cost to the government and the benefit in terms of society. If we believe that the charitable sector sometimes is better able to identify need and address it more cost-effectively, it's important for this committee to consider that impact as well, and the leveraging on that. I'm just saying that when you use a $34 million figure for the tax expenditure, in some ways that doesn't reflect the real cost to the government or to society.
Conservative
Director, Personal Income Tax Division, Tax Policy Branch, Department of Finance
“Tax expenditure” is a term used across countries, and there's generally an understanding that essentially it's just an estimate of the revenues foregone as a result of having this measure in the income tax system.
Conservative
The Chair Conservative James Rajotte
Okay, we'll have to continue this discussion in a further round.
We'll go to Mr. Van Kesteren, please.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Thank you, Chair.
I'm going to go a little bit along the lines Mr. Brison was going with Ms. Hawara.
You mentioned the reasoning behind it. The common law that establishes relieving poverty, advancing education, advancing religion, or being beneficial to the community is very interesting. I guess I want to track that for a minute.
Before I do that, I just want some clarification from Mr. Keenan. You said that 10% of charitable organizations can be political. Did I catch something along those lines? Then you mentioned that they have to be non-partisan, as well. This is from your opening remarks.
Director, Personal Income Tax Division, Tax Policy Branch, Department of Finance
What I said in my opening remarks was that charities are able to engage in advocacy and political activities, and these must be limited. The “limited” definition is that they represent no more than 10% of the charity's resources. They must be limited and they must be ancillary and incidental to the charitable purposes and be non-partisan in nature.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Okay, good.
Ms. Michaud, you said that among people earning more than $80,000, 25% were donors, and 50% of donations came from those individuals. That came from your chart, I think. Was it the CRA?
Director General, Education, Labour and Income Statistics Branch, Statistics Canada
Yes, it was in our presentation, in slide number 8.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
I wrote it down, and I'm quite sure that's what it was.
January 31st, 2012 / 4:05 p.m.
Director General, Education, Labour and Income Statistics Branch, Statistics Canada
Yes, it was 25% of donors and 53% of total donations.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
How much have incomes risen since 1990? You have charts from 1990. Has that percentage changed? Is that something that has changed, or is it a constant? Can you answer that?
Director General, Education, Labour and Income Statistics Branch, Statistics Canada
We could calculate that for you and provide it to you.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
I think that's important, because we are often critical of those making higher wages, yet we see there's a net benefit there.
Your other total says that $8 billion is collected or is paid out in donations. That's correct, as well, too, at a high point. I think the high-water mark was $8 billion. That's $8 billion the government doesn't have to spend on social programs. I think that stands to reason. That is very interesting, because I see the wisdom of the government when they have applied the rules, the common law, which says that religious giving and those attending churches and those with higher education....
What about statistics in that respect? Do you have statistics for those who attend churches and those with higher education? Do you have statistics that prove that those groups are more charitable?
Director General, Education, Labour and Income Statistics Branch, Statistics Canada
This is the kind of information that would come from the Canada Survey of Giving, Volunteering and Participating that will be released in the spring. We wouldn't have that directly from the tax files.
Conservative
Director General, Education, Labour and Income Statistics Branch, Statistics Canada
You will be able to in the spring, when it will be released, absolutely.
We can provide information from the previous years, which would be 2007 and 2004, so that you have a bit of a historical trend. We'd be happy to provide that information.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Okay. I'd like to have that, Chair, if we could get that information. I think it's very relevant; we need to have it.
I think there's another tie-in with organizations, as was mentioned before. There are organizations like CARE, the Mennonite relief agency, and CRWRC. They do a good job at identifying needs, especially in third world countries, but we also often match dollar for dollar with organizations like CIDA as well. Is that something you're seeing grow? In the past we've seen the catastrophe in Haiti, an earthquake in Pakistan, and I believe there was another. Has that grown as well?
Maybe I'm talking to the wrong people at this point--
Conservative
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Maybe CRA could tell us if donations are coming in from those requests from governments.
Conservative
Director General, Charities Directorate, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency
I don't believe the CRA tracks that particular information, although when there are disaster situations, we do work closely with CIDA and other partners to see where we can help. However, I don't think we track those particular donations separately.
Conservative
The Chair Conservative James Rajotte
We can return to that inquuiry in a future round.
Ms. Michaud, I just want to clarify. The Canada Survey of Giving, Volunteering and Participating is coming out in the spring. When was the last one done?