Finance Committee on May 3rd, 2012

[Mark Adler, Conservative, York Centre, ON]

I see. Okay, thanks.

[The Vice-Chair, NDP, Peggy Nash]

Thank you very much.

I have put myself on the list of questioners, and I'll continue with you, Mr. Patrick.

You said that the genesis of this program comes from the U.S. I did see a similar program when I was down there a couple of years ago. Are they the model? Would you say, if there were a place that's more advanced than Canada on this, it would be the U.S.?

[Jim Patrick]

I'm not the expert to make comparisons beyond North America. I do know that the text-to-donate channel works essentially the same in Canada and the U.S., based on a keyword and a five-digit short code. We have a few direct comparables, like the Haiti experience, but beyond that we haven't done any extensive international comparisons.

[The Vice-Chair, NDP, Peggy Nash]

Okay.

I have quick question while you're here. Are you folks looking at the cellphone registry for lost phones?

[Jim Patrick]

It's something we're considering and looking at, yes.

[The Vice-Chair, NDP, Peggy Nash]

Okay, great.

On the proposals for both the stretch tax credit and the capital gains, do you think that there are some kinds of charities that would benefit more and some that might not see any advantage to these proposed changes?

I'm someone who was on the fundraising board, the campaign committee, of the United Way in Toronto for a long time. Is the United Way an organization that might benefit? Are there some organizations that might not see any benefit from these changes you're proposing?

Whoever wants to answer that can.

[Andrea McManus]

My response to that would be that the stretch tax credit, which I'd like to go back on record as saying would be our first choice, would benefit small to medium charities more than it would benefit the larger, well-known charities, such as hospitals and universities. The removal of capital gains on private securities and land and real estate would probably benefit the larger charities more, just because they already receive larger gifts generally.

Part of my previous answer comes from the fact that I've been doing a lot of work with agencies that serve the homeless. They are not large agencies. Whether they're focusing on addictions or affordable housing or whatever the contributing factors to homelessness are, they would greatly benefit from being able to receive gifts of land and real estate.

I think the charitable tax credit is a clear benefit to smaller- to medium-sized charities that generally find it harder to raise money, and perhaps have a higher cost of fundraising attached to that.

The other one is kind of both.

[The Vice-Chair, NDP, Peggy Nash]

Does anyone else want to add something?

[Owen Charters]

I just want to say that we do see the stretch tax credit as benefiting all. I think it's one of those “rising tide floats all boats” measures.

I think it also helps organizations, even the large ones.... Speaking to an earlier question on the support in the U.S., I would point out that some of that support, for instance, is from alumni of universities in the U.S., where there's very strong support. I think Canadians are still trying to build that from a broader base and not just from their wealthy alumni. So I think there's capacity in all institutions.

I've worked in fundraising for hospital foundations and health charities, as well, and there's no doubt that the other proposals, especially for eliminating the capital gains tax, would be helpful, but they are complex, and legally, they often take a lot of work. For instance, at CanadaHelps, we facilitated online gifts of securities for small organizations, simply because those organizations don't have brokers. It would be very hard for us to do that with something similar under these other proposals. We know that with some of the other proposals, there is a lot of complexity to deal with for small organizations and a lot of legal advice required, which they just don't have access to.

[The Vice-Chair, NDP, Peggy Nash]

Thank you.

Mr. Howlett, you talked earlier about low-income people giving a greater percentage of their income. You didn't get a chance to really finish your thought. I have about 45 seconds left, if you'd like to talk further about that.

[Dennis Howlett]

The figures I have show that people with incomes lower than $20,000 gave about 1.6% of their income in charitable giving, whereas people with incomes over $100,000, gave 0.5%. If you look at giving in terms of the percentage of income, low-income people actually give a lot more. They don't generally get tax receipts for that, and their gifts are often less than $200, so they're given the lowest rate. That's what we feel is unfair.

[The Vice-Chair, NDP, Peggy Nash]

Thank you.

Mr. Goguen, you have five minutes.

[Robert Goguen, Conservative, Moncton—Riverview—Dieppe, NB]

Thank you, Madam Chair. Thank you to all the witnesses for appearing.

In holding to the theme, I'll try to ask charitable questions—

[Voices]

Oh, oh!

[Robert Goguen, Conservative, Moncton—Riverview—Dieppe, NB]

Mr. Robert Goguen —but their non-deductible, however.

I'm curious to get Ms. MacKenzie's take on the volunteers and their contributions not being tax-deductible. We've sort of abandoned the fort on that. We have the fireman's tax deduction.

Is even having a set fee to encourage people to volunteer unworkable in your mind?

[Ruth MacKenzie]

I think there are some unique issues around tax incentives for volunteer firefighters or emergency services volunteers in terms of how volunteering plays out and the cost implications of volunteering. I think that's a bit of a unique niche.

But just generally there is no basis that a tax incentive is an incentive to volunteer. Our research and research from Volunteer Alberta conveys that's really not the case.

I also think there are way too many questions that are still around about that whole issue. The concern about quantifying volunteering and the picture that presents about altruism and the role of volunteers in our community is also really concerning. When you look at quantifying volunteering in terms of the hours contributed and an hourly wage rate, you really miss the human capital and social capital that is built through volunteering.

Our concern is about simply looking at volunteering in a quantifiable sense.

[Robert Goguen, Conservative, Moncton—Riverview—Dieppe, NB]

Even based on a minimum wage, given the province, there is no way you could establish some sort of a gauge, even a topped-off amount? Has it been done in any other country, do we know?

[Ruth MacKenzie]

Some countries have a tax incentive. The U.S. has a tax incentive for volunteering.

Our point as well is that talk about volunteering strictly in those terms is problematic to many volunteers, who find it off-putting when they think of the altruistic nature of why they came to volunteering.

So again if we're talking about recognizing volunteers with the assumption that it's not an incentive for people to volunteer or volunteer more, there are other mechanisms to recognize a volunteer contribution.

[Robert Goguen, Conservative, Moncton—Riverview—Dieppe, NB]

Well, you noted a while ago that the cost of volunteering seems to be a disincentive, like the police checks and the other costs. Should associated costs like that be tax deductible?

[Ruth MacKenzie]

That's certainly something to be looked at. Having a tax credit for the real costs that individuals incur when volunteering is quite a different matter than a tax incentive for time given.

[Robert Goguen, Conservative, Moncton—Riverview—Dieppe, NB]

Okay. Thank you.

Those are all my questions.

[The Vice-Chair, NDP, Peggy Nash]

Thank you.

Ms. Glover.

[Shelly Glover, Conservative, Saint Boniface, MB]

Thank you.

Thank you very much for coming.

I love this study because it gives us a real opportunity to have a discussion about out-of-the-box ideas to increase charitable giving. But as we're progressing with this study, the trend that I'm seeing, unfortunately, is that there appears to be some kind of an effort to support two main ideas: the stretch tax and the capital gains.

We've heard those ideas repeatedly. I'm looking to encourage anyone who might be watching or listening and who might be appearing here in the future to come with some new ideas, because we are going to consider those two ideas and you could also quickly say when you are here that, yes, we support these ideas. But I think we're missing an opportunity when each of these organizations just come here and reiterate what a stretch tax credit is and what a capital gains tax is, because there are other ideas.

So, unfortunately, I'm going to focus my time on the two new ideas because we have spent an awful lot of time on the other situations and I'm disappointed that we aren't coming up with more out-of-the-box ideas.

Jim Patrick, you came here today with a new proposal, which is why we're quite engaged by it. But I want to know what's in it for your organization? How much do the charities pay on average? Is there a formula that you use?

[Jim Patrick]

The charities pay the Mobile Giving Foundation; they don't pay us. The Mobile Giving Foundation is a separately incorporated body.

I don't have particular statistics on whether there is an average fee or whether it's a transactional fee. It's something I can look into.

What's in it for us is that we think that people should be using wireless technology to do everything. Because it was possible we thought it should be implemented. It's similar to the reason we had for taking on the wireless amber. We run a free cellphone recycling program. There is very little in it for us on a financial level, but it's—

[Shelly Glover, Conservative, Saint Boniface, MB]

Right, but it does advertise the.... So I get that.

Now my question of the others is, why are you not using this mobile giving? What is the disadvantage to this? Are your organizations using this, Ms. McManus, Mr. Charters, Ms. MacKenzie?