Are they jumping on the bandwagon?
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.
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.
4:30 p.m.
Conservative
4:30 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
Thank you, Mr. Chair.
As you probably know, in the pre-budget minority report we supported the stretch tax credit, so I won't ask too many questions regarding that.
What I would like to know is more in terms of in the field with United Way. You mentioned that now you have a shortfall of $600,000 in revenue, and also that the government is doing less and less provincially and federally.
Can you tell us more in terms of what's happening with the help you get from the government? Tell us about your experience with the lack of revenue or the difficulty you've been going through.
4:30 p.m.
Chief Executive Officer, United Way of Burlington and Greater Hamilton
The biggest challenges that we, as a funder, are facing are not so much our own challenges as they are the challenges of the 73 agencies that we fund. It's because of shifting government funding for a number of programs. I'm not saying federal and I'm not saying provincial and I'm not saying municipal; I'm saying it's a shift in the change of funding. Also, in our area, because of changes in the economic environment, there is a growth in poverty, especially among seniors, that is being impacted.
So when I say there's going to be a $600,000 shortfall, I'm implying that the agencies who have now just completed their funding applications have asked for $600,000 more than we have raised in this particular year. Last year it was $300,000 more, so it depends on the environment. Often, agencies would like to start new initiatives and they look to United Way to continue to fund them. Often, there are programs coming off three-year Trillium funding that then come to United Way to provide the sustainable funding.
One of the challenges that the agencies are trying to deal with—so they turn to us to be the financial resolution—is a growing demand for programs and services in the community that is not being met by other government programs.
4:30 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
Right.
I wanted to ask Mr. Johnson and Mr. Kleinman a question regarding the recommendations they have made.
Your recommendations regarding real estate and private shares did differ a bit, but the issue for me is more in terms of prevention. There were some cases where the value of the gift was an issue and there was fraud. How do you prevent that from happening?
4:30 p.m.
Member of Advisory Board, BMO Capital Markets, As an Individual
You prevent that from happening by saying that the charity cannot issue a tax receipt to the donor until the charity has received the cash for the sale of the asset. That's the real value.
4:30 p.m.
Member of Advisory Board, BMO Capital Markets, As an Individual
I'd just like to add one other thing, since there's a lot of interest in United Way around here. I happen to have been a member of the major individual giving cabinet for Toronto United Way for the past 10 years, so I will give you an example in terms of how removing this tax barrier can trigger donations.
United Way in Toronto was founded in 1956. From 1956 to 1996, before the capital gains tax was removed, the total in gifts of stock over 40 years to the United Way in Toronto was $44,000. Since 1997, when the capital gains tax was cut in half, and then removed in 2006, the total in gifts of stock to United Way in Toronto has been over $75 million. That gives you an example that while the donors are typically quite wealthy people, the beneficiaries are the people who are served by the 200 agencies to which the United Way in Toronto provides crucial support.
4:30 p.m.
Executive Director, Jewish Community Foundation of Montreal, Canadian Association of Gift Planners
When you talk about fraud evaluations, if you saw where they've come from.... In a sense, it's been from tax shelters. It never made sense; the values weren't there. You were valuing air.
Here you're not talking about air; you're talking about cash coming in at the end of the day and about monetization, and it's easy to value cash.
4:30 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
Thank you.
If you're transferring private shares, that's not necessarily cash.
4:30 p.m.
Executive Director, Jewish Community Foundation of Montreal, Canadian Association of Gift Planners
Right. So you get a valuation, which can be difficult, but we're talking about a capital gain exemption based on cash. If you're going to give that capital gain exemption—they don't have to give it, you're not entitled to it automatically—you have five years to cash that asset, and once you cash that asset, then you're going to give that exemption on that asset.
So something has to happen. There's a form that can be developed; the Quebec Taxation Act has the same one for art because there are different rules there. There are ways of doing it so that the charities are involved and the government gets its form to see what's happening, and it can be pretty clean.
4:35 p.m.
Conservative
4:35 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Thank you, Mr. Chair.
Thank you all for appearing before us this afternoon. I just had a couple of quick questions, first of all to the Canadian Land Trust Alliance.
Who owns the land once it's been put in trust?
4:35 p.m.
Director, Canadian Land Trust Alliance
It's the land trust itself, most often. Sometimes it will be transferred after the initial donation to Parks Canada, or a provincial government sometimes, if the land abuts an existing conserved property. But the land trust retains what's called the conservation easement, which entitles the land trust to enforce continued protection of the land.
4:35 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
I have a question for the Canadian Association of Gift Planners.
Do you work for organizations? Who is your parent company? Who is the force behind you?
4:35 p.m.
Executive Director, Jewish Community Foundation of Montreal, Canadian Association of Gift Planners
The Canadian Association of Gift Planners is an association of individuals who either work for charities or are allied professionals. They could work for insurance firms, brokerage houses, trying to look at planned giving as a way of...or stimulating planned giving in Canada.
4:35 p.m.
Conservative
4:35 p.m.
Executive Director, Jewish Community Foundation of Montreal, Canadian Association of Gift Planners
There are over a thousand members.
4:35 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Okay.
When we began the study—and I want to direct this to the gentlemen from United Way—we were figuring out where the donations all came from. When we analyzed that—actually, I think it was Statistics Canada who gave us those numbers—I noted that it is abysmal when we look at some of the giving across the board. We certainly have room for growth.
What was striking, though, was that the majority of the giving came from two separate groups. Those groups were, first of all, educated, and they were religious groups, and predominantly Protestant religious groups, as they said. Have you asked the question why that is? Have you been able to possibly look at some of the methods that they've had success with and apply them in your organizations?
4:35 p.m.
President, Chief Executive Officer, United Way of Canada
Yes. For us also it's individuals, not corporations.
Corporations make contributions and support their employees. But more and more, it's still, by and large, individuals. That's the first thing. For us, it's individuals. We don't follow those patterns so much in local communities. We try to get out into workplaces, and we work with both labour and management to encourage people to make a contribution to the United Way for various groups in the communities.
For us, it's a constant challenge to diversify into more and more workplaces, because that's how you can contact people.
That's one part of it. The second part is that people want to know now what is happening with their donations, about what actually makes a difference. That's why I talked in the beginning about focusing on what begins to solve the problems, not just continuing every year to get a donation.
For a lot of people, they want to see where their money goes. That's what turns on young people. That's what turns on entrepreneurs much more than the old ethic. We're doing all kinds of things now to communicate what difference we're actually making. I think the stretch tax, again, provides people who want to make a difference in the community a new way to do it, and get a benefit from it that wasn't there before.
4:35 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
I'm glad you brought that up. I think you're absolutely correct. I was reading once that in Rome, I think—and this is in 100 AD or 200 AD, somewhere in that period of time—wheat was given at an alarmingly increasing rate and that just seemed to perpetuate.
I'm curious. Do you look at some of your programs and say you're not getting results here, that this is the same thing over?
I think you're right. I think people want to see improvement. Have you possibly changed your focus—not that we can't address the need—to correct the need? Is that part of your program as well?
4:40 p.m.
President, Chief Executive Officer, United Way of Canada
Yes, that's absolutely critical now.
We've been doing that for years and years; now it's even heightened, in two ways. The first is what they are doing that actually solves the broader community problems—not just continuing work as usual. Number two is what new patterns and partnerships we can engage people in to make a difference on both levels.
4:40 p.m.
Conservative
