Yes, I got that.
Evidence of meeting #41 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was donations.
A recording is available from Parliament.
Evidence of meeting #41 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was donations.
A recording is available from Parliament.
5:10 p.m.
Senior Vice-President and Chief Economist, TD Bank Financial Group
The bottom line is that I would approve.
5:10 p.m.
NDP
Robert Chisholm NDP Dartmouth—Cole Harbour, NS
Okay.
Mr. Burrows, do you want to respond on my comment with respect to altruism?
I'm getting old, you see, and I can't keep it straight.
5:10 p.m.
Head, Philanthropic Advisory Services, Scotia Private Client Group, Scotiabank
Absolutely I can respond.
I think it's a core Canadian value. I'm also worried about, for example, eliminating the first tier. That's potentially $100 million for existing behaviour. There's nothing new coming into the system for charities, and it's a $100-million expense.
You combine the stretch and the two capital incentives in the cost, and the upside, well, it's about the same cost, only you're getting at least approximately $500 million into the sector in new money.
5:10 p.m.
NDP
Robert Chisholm NDP Dartmouth—Cole Harbour, NS
But the stretch would avoid that because it's new money, right?
5:10 p.m.
Head, Philanthropic Advisory Services, Scotia Private Client Group, Scotiabank
The stretch addresses that. It's only for new behaviour as opposed to inflating the system with existing behaviour.
5:10 p.m.
NDP
Robert Chisholm NDP Dartmouth—Cole Harbour, NS
Right.
You talked about the ecogifts and what you understood the discussion was on Tuesday. What I recall was the concern about the one affecting the other, that potentially a property that would be gifted as a piece of ecological property could be turned over to a developer instead.
5:10 p.m.
Head, Philanthropic Advisory Services, Scotia Private Client Group, Scotiabank
Right. This could conceivably happen.
5:10 p.m.
Head, Philanthropic Advisory Services, Scotia Private Client Group, Scotiabank
It could conceivably happen.
I see it as sort of the 1% situation. The 99% benefit is much broader across the sector, and it's going to be different types of non-conflicting properties.
5:10 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
Thank you very much.
Mr. Alexander, you mentioned the fact that as we go along, we'll be getting into budget austerity. Do you feel that the charitable organizations will have to take more on, in terms of service, in terms of having smaller programs, smaller funds, and having to do the work in the field?
5:10 p.m.
Senior Vice-President and Chief Economist, TD Bank Financial Group
I think what we've been seeing over the last several years, combined with the likely trend going forward, is that charities are going to have to become more efficient. They're going to have to become more productive. They're going to have to become more innovative. They're going to have to become more efficient with the money they have.
Just as governments are going to have to live within very tight budgets, so too are charities. At the end of the day, we need the social services they provide. I do think it's going to be a very tough world, but that's the reality.
5:10 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
Ms. Alepin, do you think that the fact that the government is withdrawing from some services means that it is making room for charitable organizations to do the work in its place?
5:10 p.m.
Chartered Accountant, Tax Policy Specialist, Author, As an Individual
Apart from the issue I already mentioned, I think we need a system that encourages people to give to charitable organizations. In the upcoming years, depending on whether the government withdraws from some services or not, charitable giving is going to become more and more necessary if we want everyone to make it in our society.
That said, among other things, we have to pay close attention to the social funding and social conscience of private foundations. We have to be vigilant because we must make sure that the big public issues remain the purview of our elected representatives.
5:10 p.m.
Conservative
The Chair Conservative James Rajotte
I'm going to take the next round.
I want to follow up on this debate on whether it's better to implement a stretch tax credit or whether it's better to move to one credit.
When I asked Imagine Canada about it, their response was essentially the same as yours, Mr. Burrows, which is that you're not going to incent any more behaviour, and you're going to add a lot of additional fiscal cost to the government.
In your statement, Mr. Waters, you clearly said that BMO's economic department has said that it would encourage giving from more modest donors. Are you sort of disagreeing with one another? Or are you saying that it would have some modest impact in terms of smaller donors but wouldn't have much of an overall impact in terms of changing charitable behaviour?
5:10 p.m.
Vice-President, Head of Technical Expertise, Wealth Group, BMO Nesbitt Burns
Yes. What I'm getting at, focusing on some studies and some other comments that have been made in prior committees, is that tax incentives do provide some incentive to donate more. But I would focus more on the other benefits of eliminating the $200 distinction, most notably the fact that it's a simpler system. People can understand that if you earn some income and you donate it to a charity, you're not paying any tax on it. That's currently not happening for many taxpayers in other systems. It's very simple. It's easy to understand. It's easy to comprehend and it's very palatable to the population.
The other comment I would make is that it makes every dollar of donation count the same, and I think that for modest, hard-working Canadians, every dollar of donation should be worth the same.
5:15 p.m.
Conservative
The Chair Conservative James Rajotte
I think the consensus would be, then, that if we were to do that, it should be based on fairness. It should be based on simplicity of administration and not necessarily on encouraging more donations.
5:15 p.m.
Vice-President, Head of Technical Expertise, Wealth Group, BMO Nesbitt Burns
I think it might be a by-product of that. I respect Mr. Burrows' comment that probably a lot of people who are making $10 donations to a child's Jump Rope For Heart are not thinking about the tax benefit. I think there could be a small by-product, but I would argue that the main benefit of changing the taxation for the under-$200 level is more for simplicity and parity--the fact that it's the same for every taxpayer.
5:15 p.m.
Conservative
5:15 p.m.
Head, Philanthropic Advisory Services, Scotia Private Client Group, Scotiabank
Indeed.
The charitable position is that we want to see more money in the sector, not just the benefit to the taxpayer. So $100 million to $200 million extra expenditure that does not guarantee anything more out there at this time just does not make sense.
5:15 p.m.
Conservative
The Chair Conservative James Rajotte
Okay.
I want to follow up. I appreciate the discussion with respect to the donation of land and property. I take your point with respect to a house in Surrey clearly not being an issue in terms of ecologically sensitive land.
5:15 p.m.
Head, Philanthropic Advisory Services, Scotia Private Client Group, Scotiabank
It wouldn't be a house, a principal residence. It would only be taxable real estate. If it were a rental property and a secondary property, it could apply.
5:15 p.m.
Conservative
The Chair Conservative James Rajotte
That's a good point.
But if there is a situation in terms of the actual donation of land, which could either be one or the other, is that going to be an issue? It may not be an issue.
The alliance raised it as a concern. Are you saying that it's not a valid concern? Or is there a way to address their concern if we did it?