Thank you very much.
I'm very pleased to be here this afternoon to speak with you on the important topic of tax incentives for charitable giving in Canada.
Volunteer Canada is supportive of the efforts being made to encourage Canadians to contribute and actively engage in their communities, and recognizes that financial contributions are essential to the vitality of the charitable sector. For this reason, I want to state up front that we fully support Imagine Canada's stretch tax credit proposal and appreciate the perspective and expertise of our colleagues appearing before you today.
Volunteer Canada has been providing thought and practice leadership on volunteering and active citizenship for more than 30 years, in collaboration with 223 local and provincial volunteer centres and a broad network of national organizations. We promote volunteering and conduct research and create tools and provide training to help organizations effectively engage volunteers.
Our role is one of stewardship for volunteering as part of citizen engagement, and in that context I wish to speak to the link between volunteering and charitable giving.
Annually, 13.3 million Canadians contribute more than two billion hours through a range of volunteer activities, from mentoring to delivering essential services to leadership roles on boards of directors.
I don't have to tell you that volunteers played a big role in your being here today, in their tireless efforts on your election campaigns.
The social and economic value of these gifts of time have yet to be adequately measured. Even with a limited wage replacement approach, volunteer time contributes significantly to the GDP of Canada. Some 45% of volunteers, or almost seven million Canadians, report that when they volunteer they are engaging in fundraising activities. Volunteers are obviously crucial to an organization's ability to raise funds.
Also interesting is that 50% of the individuals who donate money are also volunteers, but 91% of the volunteers are also donors. This suggests that by enhancing volunteering you may also enhance your donor base.
Given the scope of our work and the diversity of organizations we work with, Volunteer Canada would also like to stress the value and importance of citizen engagement in the broader voluntary sector, half of which is made up of non-profit organizations that do not have charitable status, and thus would not be supported by the tax incentives being considered here.
Broader public policy is needed to promote a wider spectrum of engagement through the non-profit and charitable sector. This could take shape through one or more of the following three recommendations: addressing the financial barriers to volunteering, such as the cost of police checks, or proactively supporting the direct costs associated with leveraging volunteer time and talent when funding programs with voluntary organizations; supporting the skills building and career development benefits of volunteering with employment services; or recognizing the benefits of volunteering in integrating newcomers to Canada.
That said, the parallel question to today's deliberations would be whether volunteers should receive tax credits for their volunteer time. To do so would naturally require that volunteering be valued and quantified. Volunteer Canada feels that the development of an adequately comprehensive policy would be fraught with both philosophical and practical challenges. While in some unique situations, such as with volunteer firefighters, a case can and has been made for such credits, I'm sure you'd also agree that the value of volunteers engaged in literacy work, for instance, is beyond the dollar value given for that time.
While the time volunteers contribute certainly has great value, how would we calculate how much their time is worth? Would there be a standard hourly rate for all volunteering? Would this apply only to charities? Again, this represent only half of the non-profit organizations in Canada. What kind of administrative burden would this place on organizations and would it detract from the time to directly deliver on their missions?
Certainly, not the least, is there evidence that this would increase volunteering? A study by one of our provincial partners, Volunteer Alberta, entitled The Potential Impact of Canadian Federal and/or Provincial Tax Credit Incentives for Volunteer Participation, suggests otherwise and raises some significant areas of potential risk in doing so.
While proponents of tax credits for volunteering certainly have the best intentions in their goal of acknowledging the important contribution of time, these questions and others need to be carefully considered.
At Volunteer Canada we consider volunteering as a vehicle for citizen engagement and social inclusion, and we encourage creative and innovative policy to support both giving and volunteering for the charitable sector and the broader non-profit sector in Canada.
Thank you very much for the opportunity to speak with you today.