Evidence of meeting #39 for Finance in the 41st Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was charities.
A recording is available from Parliament.
Prof. A. Abigail Payne
From an economic standpoint, it's a two-point question: would they have sold and would they have donated? Those are two big assumptions. We don't know what would have happened without the tax credit.
Liberal
Scott Brison Liberal Kings—Hants, NS
Okay.
Thank you very much. I think it's important, because when Finance tells us that these kinds of measures are a tax expenditure, we need to consider the degree to which they represent an expenditure like any other expenditure or in fact are something that is attributed to that which may in fact may not be the case in terms of cost to treasury.
I have a question on the proposal to eliminate capital gains tax on gifts of private companies. I'd like to seek your input. I represent a rural and small-town riding. In my riding, and I think in rural and small-town communities across Canada, there's a fair bit of wealth in small businesses and small-town millionaires who have done very well over the years. In many cases they have succession issues. They've run these businesses successfully, they may be approaching their seventies, and their children are off in cities doing something. There could be a real unleashing of capital.
Liberal
Scott Brison Liberal Kings—Hants, NS
I just would appreciate your view on the potential of unleashing a lot of potential philanthropic capital and charitable giving in rural and small-town Canada if we were to make changes on the tax treatment of small businesses.
Conservative
The Chair Conservative James Rajotte
Could we have one person respond to that, please? Is there someone who would like to tackle that?
Ms. Payne.
Prof. A. Abigail Payne
My sense is that private shares can be valued. We do have forensic accountants. So the concern of not having the tax treatment for them because there will be some sort of abuse should...or that's not the reason for doing it. I don't know what the reason is for treating them differently if we have good forensic accountants.
Liberal
Scott Brison Liberal Kings—Hants, NS
It might be more of this phantom tax expenditure stuff they're afraid of, right?
Conservative
Prof. Adam Parachin
Just quickly, there are some concerns about charities holding illiquid assets as well. So the preferred model would be that you can dispose of the private company shares and then donate the cash, because what does a charity do with the share of a private company?
Conservative
The Chair Conservative James Rajotte
Thank you.
I want to thank you all for being with us today.
Ms. Lamb, I want to thank you for being with us from Kamloops, British Columbia.
If you have anything further in response to any of the questions you've been asked today, anything further you wish the committee to consider during our deliberations on this issue, please do forward it to the clerk, who will ensure that all members get it. I want to thank you so much for being here.
Colleagues, I have just a very brief administrative note. We did have a subcommittee meeting this morning. You have the first report before you just identifying what the subcommittee agreed to. Please take a look at that and be aware of those issues.
The only other item we should address on here is the visit to Cisco to see the TelePresence issue. We will add that for the next one.
Thank you, all. The meeting is adjourned.