Thank you for the opportunity to appear before this committee.
I am representing Canadians for Tax Fairness. We're a new organization that is just one year old. We have begun a campaign for fair taxation. We support a tax system, based on the ability to pay, that will fund the comprehensive, high-quality public services and programs that are required to meet our social, economic, and environmental needs in the current century.
We submitted a brief back in January. We have three main recommendations. We have a different point of view from some of the others on this panel. We are concerned about increasing the incentives for charitable donations. We would advise caution, partly because of the tax revenue that would be lost. But our primary concern is that we not skew the tax credit system even more in favour of the rich, because we know that the rich have different priorities from the poor. The way the tax system operates, it treats donations by the rich more generously in terms of incentives than donations by those who give under $200.
The third point we would make is that we need to reverse the erosion of progressivity in the tax system by restoring the federal corporate income tax rate of 21%, which was in place in 2007, and increasing tax rates on top incomes. This would help to ensure that all sectors of society, including corporations and the rich, contribute to the common good according to their ability to pay, and not just leave it up to their whims or whether they have a generous heart or not and whether they choose to give or not.
There are a few additional points of clarification that I would like to make in addition to what was included in the brief. I want to stress that we are not criticizing charities. I have worked for charities in past years. Certainly, I know the value of charities to society. They play a very valuable but complementary role in relation to the government's role of providing public services and programs. They can be a way to develop innovative programs. They can be more responsive to community needs. But they cannot really replace government programs. We would warn the government that you cannot expect charities to fill the gaps that will be created by drastic government budget cuts in the area of the delivery of social programs.
Finally, I would like to comment on one of the most important roles that charities can play, which is to provide policy input based on their experience of providing front-line services, and their ability to speak on behalf of marginalized groups. A CRA policy statement on the political activities of registered charities, which was issued in 2003, and which is still the official policy—it's on the website—recognizes this when it says:
Beyond service delivery, their expertise is also a vital source of information for governments to help guide policy decisions. It is therefore essential that charities continue to offer their direct knowledge of social issues to public policy debates.
Some of the measures in the recent federal budget, namely the $8 million allocation for special audits by the CRA to see if charities are adhering to the 10% limit on advocacy, and additional restrictions in reporting rules, would seem to go against this recognition. Attacking charities that advocate on the environment, global or domestic poverty, or other issues, just because they may be critical of some government policies, is an attack on democracy.
To conclude—