Evidence of meeting #40 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.
4:45 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Okay. I understand.
In relation to your argument that pre-existing tax liability should be taken into account, do you think that's fair? Obviously it's going to throw off the estimates of Revenue Canada and everybody else relating to the tax liabilities because it would extinguish those.
4:45 p.m.
Member of Advisory Board, BMO Capital Markets, As an Individual
Well, the estimate that we give of the costs to the federal government being $50 million to $65 million per year includes the charitable donation tax credit for gifts from individuals. It includes the tax savings for corporations, but it also includes an estimate of the foregone capital gains tax, so it includes both the tax revenue cost and the foregone capital gains tax.
On Scott Brison's point, that estimate should really be lower because the government would not necessarily be getting the capital gains tax revenues if the individual didn't have the opportunity to donate the asset.
4:50 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Exactly.
I only have one minute left, and I'd like to put a plug in for my constituency.
I'm from Fort McMurray, and I understand the United Way...I see a thumbs up, but they don't see that on the camera, I don't think.
I've been in Fort McMurray for 47 years. I was the chairman of the Children's Health Foundation up there. I keep hearing all across the country about how kind and generous the people in northern Alberta are, in Fort McMurray, especially the oil sands companies and the employees who work for them. I'd really like you to plug that today and talk about how good they are.
4:50 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
So they can't be any better, is what you're telling me.
4:50 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Is it true that they donate more per capita in Fort McMurray than anywhere else in the country?
4:50 p.m.
President, Chief Executive Officer, United Way of Canada
Yes, actually. Right now, in the last couple of campaigns—
4:50 p.m.
Chief Executive Officer, United Way of Burlington and Greater Hamilton
We're very jealous of Fort McMurray.
4:50 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Well, you should be, and you should move up there. It's a great place to live, a great place to raise your families.
Do I have more time to plug Fort McMurray?
4:50 p.m.
Conservative
The Chair Conservative James Rajotte
No, you're out of time.
Does that include the shadow population as well?
Okay, we're going to go to Ms. Glover now, please.
4:50 p.m.
Conservative
Shelly Glover Conservative Saint Boniface, MB
Thank you again, everyone. Our witnesses today are really exceptional. I would like to begin with Mr. Lauzière.
You began your presentation by saying that the government has taken measures that have helped you as a charitable organization. We made changes in 2006, 2007, 2008 and 2010. I would like to know which measures you thought were good so that we know what to keep, in addition to what we are going to do. What did you find helpful?
4:50 p.m.
President and Chief Executive Officer, Imagine Canada
What helped us was the changes pertaining to capital gains. There is the work done by Don Johnson and others with the support of Imagine Canada and several other groups. The Liberals had started and the Conservative government continued, and this was very important. We are talking about $1 billion given to charitable organizations. It is essential and very important.
A second measure was put forward by the current government two years ago, namely eliminating the disbursement quota for charitable organizations. That was the 80:20 rule, which, to some extent, often put organizations in situations where they had little flexibility. This was especially true for small organizations, rural organizations and those surviving solely on philanthropy without any funding from government or large corporations. This 80:20 rule was really quite a major obstacle. We certainly applauded the government's measure in the budget two years ago removing this provision. That was very important.
4:50 p.m.
Conservative
Shelly Glover Conservative Saint Boniface, MB
I'd like to open it up to other witnesses.
If there are helpful measures that you believe ought to be retained, speak now or forever hold your peace.
4:50 p.m.
Director, Canadian Land Trust Alliance
Certainly with regard to the ecological gifts program, it should go without saying that if you extend the capital gains exemption to all gifts of real property, you've pretty much cut the legs out from under that program.
It serves as an important incentive. It has a tax policy based on the government's overall protection of the environment policy. It is somewhat related to the policy with respect to charitable giving, but it has a very independent policy basis.
If you extend the capital gains exemption to all gifts of real property, you put donors in a situation where they get the same tax benefit if they give sensitive land to a hospital, a university, their church, as they have if they gave it to an environmental charity.
There is no protection that goes along with the tax benefit. The Canadian Land Trust Alliance certainly takes that view with respect to that measure.
4:50 p.m.
President, Chief Executive Officer, United Way of Canada
I think a really important one is the disability tax credit that Mr. Flaherty brought in about two years ago to allow families to make a long-term investment in their children. Disabled people are living longer and those mechanisms didn't exist.
I think that has been a tremendous boost for organizations across the country. It's actually a model for other charities to look at whether they can do something else in areas where people are going to be dependent long term on other systems that can't actually sustain them.
4:55 p.m.
President and Chief Executive Officer, Imagine Canada
To add very briefly to that, that registered savings plan, which has really been applauded, was actually an idea that was put forward by the charitable sector.
February 7th, 2012 / 4:55 p.m.
President and Chief Executive Officer, Imagine Canada
It worked with government. It was an example of great policy ideas and options coming forward from the charitable sector. We often give that as an example.
4:55 p.m.
Conservative
4:55 p.m.
Executive Director, Jewish Community Foundation of Montreal, Canadian Association of Gift Planners
Just when you're asking about a potpourri of ideas, I saw in one of the papers that someone put in a proposal that you allow 1% of total revenue for foreign donations.
Foreign donations are very difficult today. There used to be a time, going back historically in Canada, that you could do up to 10% of your dollars.... It would be part of the 20% of administration, not the 80% before...and charities could make donations to foreign charities. Now we're down to zero.
The Income Tax Act was changed and we're down to zero on that basis. Those who are in the business have to do an agency relationship, and if that's their basic business they should do that. But in terms of smaller amounts, it makes it very difficult for charities that are involved in some international research, other things, to make that $25,000 gift to a hospital doing research when it has to set up an agency relationship. It's too costly.
4:55 p.m.
Conservative
Shelly Glover Conservative Saint Boniface, MB
While I have your ear, Mr. Kleinman—I probably have only a few seconds—I want you to prioritize. I know you support the stretch credit and you support the exemption for private company shares. If you had to pick only one to happen, which one would you pick?
4:55 p.m.
Executive Director, Jewish Community Foundation of Montreal, Canadian Association of Gift Planners
Look, for Canada's future, I think it has to be the credit system. I like it. We're going backwards in terms of donors, so we have to do something.
But they are two different gifts. We talked before about replacing things. There are income gifts and there are capital gifts. When I speak to someone at a fundraiser, if I'm talking about your income it's what you earn and what you're going to give. Capital is something different.