Evidence of meeting #56 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was organizations.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Andrea McManus  Chair, Association of Fundraising Professionals
Owen Charters  President and Chief Executive Officer, CanadaHelps
Dennis Howlett  Coordinator, Canadians for Tax Fairness
Jim Patrick  Senior Vice-President, Canadian Wireless Telecommunications Association, Mobile Giving Foundation Canada
Ruth MacKenzie  President and Chief Executive Officer, Volunteer Canada

4:15 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

—that they won't need to...?

4:15 p.m.

Chair, Association of Fundraising Professionals

Andrea McManus

Actually, no, I don't think they are.

I think that incentivizing any kind of giving is a positive thing, because increased philanthropy encourages more philanthropy. In fact in Canada in the text-giving scenario, we're way behind Europe and Southeast Asia and any of those countries. They've been doing that for years very successfully.

As the mother of three daughters in their early twenties, I think it's only going to grow. Because my three daughters never open a piece of mail, I open their mail. I know I'm not supposed to, but I do because if it's important, then I make them look at it. They never will, but they will do this. They will give.

4:15 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

I'm going to go to Mr. Howlett in just a second, but I think you're right: Statistics show that when children are taught at an early age to give, then it becomes habit-forming. You're right: This is an easier way to do it.

I want to talk about the giving

Mr. Howlett, I don't think there's anybody in this room who doesn't agree that we need tax fairness. I've seen the charts, and I've seen the surveys, and I know you have too. Isn't it true that it isn't necessarily just the rich who would benefit? Isn't there a large group of people who would? I think you said that just a minute ago.

I don't know if this is your intent or if you believe this to be the case, but do you think that the government should control more of the money, take more of the money, and then help social programs that way? Is that your intent?

4:15 p.m.

Coordinator, Canadians for Tax Fairness

Dennis Howlett

This is something that needs more debate, even amongst people on my board. But it is a real problem for government to be backing out of areas that they have traditionally assumed responsibility for.

4:15 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

But isn't this a vote? This is the beauty of charitable giving, that people can decide, and not only decide. I think we've all had personal experiences.

I wouldn't want to say a whole lot, but I have a family member who had some difficulties in his business and I offered to help him out by giving some money. He turned that down, because, he said, “You know, it's going to get too easy. That's not the problem here. We have to buckle down. We have to get to work”. That's a rare attitude. And that's the danger of charitable giving. If we go into an area that has more than just social problems, charitable organizations seem to do a better job at that than governments do. What's your response to that?

4:15 p.m.

Coordinator, Canadians for Tax Fairness

Dennis Howlett

It's true that they can often see needs that exist in a community, especially if they're locally based. Their role as being complementary to government is valuable and important. But it's problematic when you expect charities to take the place of...or to pick up the gaps, because many charities just don't have the capacity. They don't have the comprehensive coverage, and accessibility becomes a problem. It becomes more of a hit-and-miss thing.

That said, they certainly can often pioneer programs and develop things that can be very valuable and helpful to government as well.

4:20 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

So you haven't taken that stand; it's something you're looking at. You would agree that an organization like CIDA.... I serve on the foreign affairs committee and I see where organizations—and I don't want to start to mention the Mennonites or whatever—do a great job across the seas. We've tagged on with them and we've become much more effective in our aid distribution as a result. Do you agree with that?

4:20 p.m.

Coordinator, Canadians for Tax Fairness

Dennis Howlett

Yes. I used to work in the international development field, so I would agree with that.

4:20 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

Thank you.

4:20 p.m.

NDP

The Vice-Chair NDP Peggy Nash

Thank you, Mr. Howlett.

Thank you, Mr. Van Kesteren.

Mr. Caron, you have five minutes.

4:20 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Thank you very much, Mr. Chair.

Mr. Patrick, I have to say that I have been curious about online giving for some time. I find it an interesting idea. I have two questions.

Clearly, you are dealing with telecommunication companies. Do you have an idea of the administration fees that the companies charge, or do they give you the entire amount of the donations?

4:20 p.m.

Senior Vice-President, Canadian Wireless Telecommunications Association, Mobile Giving Foundation Canada

4:20 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

I assume that the arrangement still costs the companies something to process the data.

4:20 p.m.

Senior Vice-President, Canadian Wireless Telecommunications Association, Mobile Giving Foundation Canada

Jim Patrick

No.

The way it works is that a charity will sign a contract with the Mobile Giving Foundation to have access to the platform, and that charity will get an invoice from the Mobile Giving Foundation in exchange for that access. The amount of the donation is passed through from the mobile provider to the foundation at 100% and then subsequently passed on through the charity at 100%. It's also, I should note, tax exempt. It goes onto their bill, but not until after the tax is calculated.

4:20 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Because it is not a source of revenue for the company.

4:20 p.m.

Senior Vice-President, Canadian Wireless Telecommunications Association, Mobile Giving Foundation Canada

Jim Patrick

Exactly.

4:20 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Okay.

4:20 p.m.

Senior Vice-President, Canadian Wireless Telecommunications Association, Mobile Giving Foundation Canada

Jim Patrick

It's not a source of revenue for the wireless companies in any way.

4:20 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

You mentioned that there is no danger of fraud from accounts being hacked or things like that. But is it possible that a person who loses his cell phone might find something on the bill because someone found it or stole it?

Is there a set limit that would mitigate the losses people could incur?

4:20 p.m.

Senior Vice-President, Canadian Wireless Telecommunications Association, Mobile Giving Foundation Canada

Jim Patrick

The question of lost or stolen cellphones is one we're looking at. It's broader than just this particular application. In this case—and here I think I speak for the carriers—if there were evidence of fraud or misuse, the charge would be reversed.

4:20 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

My next question is for all our witnesses, but particularly for Mr. Howlett and Ms. McManus, and perhaps Ms. MacKenzie too.

I have not actually been a member of the Standing Committee on Finance for very long. I joined it a few weeks ago and, if I am not mistaken, this study has been going on for several months.

In a way, charities compete for donations because each dollar in donations goes somewhere. The organizations are all in competition with each other.

How much is generally spent? I know that there are variations because of the advertising and marketing needed to promote the various causes.

Is it your impression that increasing tax deductions, such as, for example, the stretch tax credit on new donations that is being proposed, would have the undesirable effect of increasing advertising and marketing budgets, given the greater amounts of money at stake?

The question goes to Mr. Howlett, Ms. McManus, Ms. MacKenzie, and to the others, if we have any time left.

4:20 p.m.

Chair, Association of Fundraising Professionals

Andrea McManus

The question about how much charities spend to raise money, is that what you're really getting at?

4:20 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Basically, yes.

4:20 p.m.

Chair, Association of Fundraising Professionals

Andrea McManus

I'd like to be able to say it's x%, but it's much more complicated than that. The CRA has come out with fundraising guidelines. They may look at anything over 35%. There are all kinds of qualifications that even they recognize around that. It's just simply the maturity, the size, and the appeal of the cause of an organization. Two organizations could do exactly the same fundraising event. One would be a children's hospital, and one might be for the Elizabeth Fry Society or the John Howard Society. You are going to have a much lower cost of fundraising because your revenues are going to be higher for the children's hospital than they will be for the other ones.

I believe the fundraising activities of charitable organizations are really their R and D, their research and development. It does cost money to raise money.

4:20 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Do you feel that the costs would increase with—