Thank you, Mr. Chair and members of the committee.
On behalf of our 70,000 supporters from coast to coast, the Canadian Taxpayers Federation would like to thank you for inviting us to today's discussion on tax incentives for charitable donations. We're the largest and oldest taxpayers advocacy group in the nation. Over our 22-year history we have worked for lower taxes, less waste, and more accountability from government.
We support a longstanding policy that seeks to prevent government from taxing income that is donated to charity in the year in which it is taxed. We believe this policy will continue to achieve the most benefit for Canadians and receive the highest level of public support when its design is the most simple and the most fair. We advocate for a lower, simpler, and flatter tax system overall, with almost none of the exemptions, deductions, and credits that currently exist. We believe Canadians allocate charitable funds more efficiently and effectively than does government. We believe that none of the income donated to charity in a given year should be subject to income tax.
We note that the current system of charitable tax credits extends lesser protection against taxation for annual donations of less than $200 for individual filers. The perverse result of that is that those who have little to give and who give little receive less encouragement proportionately than those who give more. There is less incentive to give and fewer Canadians are less encouraged to support charity. According to the parliamentary budget officer, fewer than 5.6 million tax filers claimed a charitable tax credit in 2009. With only 23% of tax filers, the average amount donated was $389 and the average tax relief granted was $58, resulting in a total tax reduction of $323 million.
Clearly, high-income earners get the lion's share of protection from having income donated to charity taxed. We believe a single flat-tax credit rate at the highest level would achieve the best results for Canadians by treating all charitable donations equally with a simple formula that's easy to understand and easy to explain to potential donors. You might study the benefits of simply making charitable donations deductible, as opposed to employing a current tax credit approach. We congratulate government on its decision to phase out the vote tax, the per-vote financial subsidy to political parties. We encourage you to take the next step and reduce the tax credit for political donations to the same level as you extend to charities. It is absolutely disgraceful that someone can receive a $75 tax credit for funding $100 of attack ads and robo-calls when they only receive a $15 tax credit for funding $100 of cancer research.
We would like to comment briefly on tax treatment of deductions of real estate and shares of private corporations. We believe all types of charity should be encouraged and we believe that freely granted charities will create more social benefits than taxing the same funds and passing them through the apparatus of government on their way to the people who need them. That being said, we urge the committee to insist on cash money, arm's-length transactions to document the true value of these charitable donations. CRA has a long, unhappy, and costly history of chasing down fraudulent charity scams involving appraisals and assessments of non-cash donations.
Simply said, we believe a receipt should only be issued after a charity sells a charitable donation of real estate, private company shares, artwork, or what have you, to an arm's-length buyer in a properly documented transaction. Any other method leaves too much wiggle room and too much temptation for shenanigans and brings the entire practice of extending tax protection to charitable donations into disrepute.
In closing, I want to tell the members that the Canadian Tax Federation is not a charity. We do not issue charitable tax receipts. We collect and remit GST and HST. We've never taken a penny of government money, we never will, and we're fine with that.