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.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
Thank you, Chair.
I know we're mostly talking about tax credits and things that could help charitable organizations, but there are more than tax credits that governments can use to help or create an environment for helping organizations, especially organizations that do development work in other countries.
What we have seen—and this is the finance committee, so we're well aware of it—is a $380 million cut to the CIDA budget. What's happening with the present government is that they're cutting off quite a few NGOs that are not ideological in their thinking. We have in Quebec alone 30 or 40 NGOs that are not going to be receiving money from the present government.
When that happens, I'm assuming it triggers.... Many times you have donors who donate money to a charitable organization that's doing work internationally. If it doesn't receive that money to do work in Africa, for instance, the project will not continue.
My question is this. When that happens, and if there are 30 or 40 organizations or NGOs in Quebec that are not going to get funded, does that put that organization in jeopardy in terms of people funding it? To what extent should governments be consistent here? There's no doubt they should review what a charitable organization is doing, if they're funding it. But is it a big problem when a government comes in and stops funding all these charitable organizations? And what happens to the donor in that case?
Chair, Association of Fundraising Professionals
There's certainly more pressure on the charities to raise money from other sources to diversify their revenue base. Whether they do that through a combination of earned revenues, social enterprise, or philanthropic or corporate support, the broader your base, the more stability you're going to have. It's similar to relying on any one donor to provide a significant percentage of your annual revenue: It's a very vulnerable position to be in.
So, yes, as governments have cut back, I think that's why we've seen such a growth not only in charities but also in the amount of giving that's been done in Canada over the last number of years.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
So it's putting the pressure on the donors, individual donors, with the government backs up?
Chair, Association of Fundraising Professionals
It's putting the pressure on the organizations to raise more money and to diversity and be more creative and innovative and to employ out-of-the-box thinking on how they're going to raise money, yes.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
Do you think there should be more third-party analysis of who gets the money instead of government having an ideological stamp on what charities get money?
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
You people must be representing these charitable organizations that are facing this. Whether it's the elephant in the room or not, I don't know, but it causes a big problem. I know you can come here for tax credits and that, but if in another door the government is shutting you down, it must be a big problem.
President and Chief Executive Officer, CanadaHelps
I'm going to say that I think each government has its own ideology of what it wants to fund. The challenge that most organizations are facing is to have a source for some kind of sustainability. So the pressure it puts on donors when these changes are made, and if they're made very quickly, is not just a pressure on the donor but also a disincentive.
In many cases, for instance in Haiti, you see donors give because of government matching. When that match is lost, not only do you feel additional pressure but you also feel that disincentive. How it's done I think is the real question. Are there ways to do it and ways where it can be transitioned, where organizations, perhaps through tax credits, can find other ways of searching for sustainable revenues? As Ms. McManus has said, those are the other types of help, not necessarily tax incentive help, that organizations need from the government.
Coordinator, Canadians for Tax Fairness
Can I just say one thing? It is important for governments to look at other ways to support charities than just through tax incentives. Direct funding for key programs is an important one, and often a more cost-effective one because when you're giving tax credits, that is a cost to government revenue as well, and because of the cost of fundraising involved sometimes it's more efficient to actually provide direct funding.
That being said, you raise the other question of when the decisions about who gets that money are politically motivated rather than being more objective assessments of the quality of the service being provided. I think that is a problem, but in principle, we need to look at all ways that government can support charitable organizations.
The Vice-Chair NDP Peggy Nash
Thank you very much. Thank you, Mr. Eyking.
Ms. Glover, and as I understand it, you'll be our last questioner.
Conservative
Shelly Glover Conservative Saint Boniface, MB
Perfect. Thank you.
I'm not a big fan of using witnesses for political reasons, which is why I'm going to avoid discussing all of what just happened, because I really do want to help. On this side anyway, we want to help you to help charitable giving across the country. So I have a couple of specific questions.
I'm interested, Ms. Mackenzie, in the numbers of volunteers that Volunteer Canada has. You're probably going to tell me how many there are, but how many of them are having to do police checks? Because we're going to be looking at these when we make our final analysis, could you supply us with a number of how many of your volunteers are doing the police checks so we can do an evaluation of how much it would cost in the end? Perhaps there's a way of our looking at somehow making the police check tax receiptable or something. But these are things we have to look at and we need some information from you to be able to do that work.
So if you could do that, it would be very helpful, and with the others as well, if you have any input on that, we'd certainly be interested in it. But I think Volunteer Canada is probably in the best position to do that.
The other thing I'd like your opinion on is that when organizations provide receipts to donors so they can get tax credits and whatnot, is there any way that you see our perhaps expanding the number of organizations that maybe eligible to give receipts? That's the key to really trying to get more donations and get more giving.
So, for example, I know we do for it amateur sport in limited ways, but have you thought about it maybe? Is that potentially something we could tap into?
Anybody? Have you thought about it?
Chair, Association of Fundraising Professionals
Of course, the definition of charity is embedded in the income tax law and there are four heads to that: relief of poverty, and—
Chair, Association of Fundraising Professionals
So I'm not sure that any of us could bring....
Conservative
Shelly Glover Conservative Saint Boniface, MB
Well, if you thought that we should expand the criteria, for example.... We know what the pillars are because we've been doing the study for a while. But that's where I'm wondering if.... Even after you leave here, if you think, well, maybe if we looked at perhaps expanding the criteria so that the tax benefit could be given to other charities....
Again, I'm just looking for more ideas that we could evaluate. As I said before, we are evaluating the stretch tax credit. We are evaluating the capital gains. Unfortunately, Mr. Mai didn't hear that part when I said it, but nevertheless, we appreciate your support of it.
We're evaluating them, but I'm looking for more ideas because I don't want to end this study without picking the brains of all of the experts and coming up with as many suggestions as possible so that we can actually see this progress.
Please keep that in mind. We'd be happy to take whatever suggestions you have following this—and I'm sorry about the partisanship in committee.
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
The last quick question that we haven't actually explored is payroll or at source deductions. It seems very ad hoc. Is there some sort of mechanism? Does it get reported on the T4, let's say, if you donate to the United Way? I just can't recall.
President and Chief Executive Officer, CanadaHelps
Yes, absolutely. We've facilitated payroll giving with third-party suppliers. United Way does it. It's reported on a T4. It's a fairly big program across the country in terms of payroll giving and payroll deductions, especially with larger employers. Absolutely....
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
But have we missed any potential pieces there in terms of our facilitating that as a government?
President and Chief Executive Officer, CanadaHelps
Well, I think there's always the capacity to encourage payroll giving at source, especially with the government being one of the largest employers in the country. It's one of the most painless ways to give.
I don't know if you want to create a differential tax benefit for doing such a thing. For all of these things, one of the things that's most important is the encouragement of charitable giving in all forms. It doesn't necessarily need to be about tax incentives; it's about raising the idea of this value as something that Canadians feel is very important.