Finance Committee on Oct. 3rd, 2012

[Prof. Calum Carmichael]

Areas that otherwise would be lost or overlooked; if 46% of Canadians' givings are going to religious organizations, and 21% to health organizations, but only 9% to social service organizations, my sense is that is disproportionate. A stretch tax credit would really intensify that type of concentration among a limited sector.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Van Kesteren.

Mr. Marston, please.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Thank you, Mr. Chair.

I have to apologize. I had to leave the meeting for a few minutes. My wife is having a bit of a procedure today and I wanted to check on her, so I may be repeating some questions.

Before I start, let me say that I had a close to 30-year affiliation with the United Way. I was on their board from the labour side in helping raise money for them. I recall very distinctly that in the eighties when government started to withdraw from providing certain levels of service—we can debate the merits of the services that were there—in the volunteer sector, the charities started filling the gap.

From our perspective—or at least my own at the time—we felt it was an abdication of the responsibilities of government. The government would raise the taxes and then the charities could do what they do best, which is to provide the services they're mandated to do as opposed to—no offence—employing tax lawyers and employing other people to build almost a substructure that to my mind takes away from a lot.... The charities do a lot of reporting. They spend a lot of their energy doing that. That's my little editorial comment, because I still believe that government has a role.

As my friend said, the picking of winners and losers will be the problem for the government. We'd have to rely on the expertise of people in the sector.

Mr. Broder, I want to go back to what Mr. Brison raised before: the elimination of the capital gains on donations of publicly listed securities. The reaction I saw from the four of you when that was raised was that it obviously was seen as a positive move. Do you think that changed the application of actual cash donations when it happened or was it something in addition to the cash donations?

[Peter Broder]

I believe the finance department did a study when it was first introduced as a temporary measure and they were considering making it permanent. There was a sense that it augmented the existing donation pool.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

So that's the good news, then, that it's something of a benefit.

I'll stay with you for a moment. There's the other aspect of potential donations of private shares. If an arm's-length purchase was made and there was an arm's-length assessment of its value, do you think Revenue Canada would accept the said value of those shares when they're donated?

[Peter Broder]

As Mr. Houston mentioned, the valuation issue has always been a challenging one on that particular measure. It would depend on how the provision was drafted, I would think.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Okay.

I think I caught that your name was pronounced differently than I read it. Is it Mr. Houston?

[J. Alexander Houston]

“Houston” is actually a counterintuitively pronounced name.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

So I caught on. You see, I pay attention—

[Voices]

Oh, oh!

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Sir, I'd like to ask you this question about individuals who make donations to charities related to some significant tax event and who withdraw some of their RRSP money or something of that nature to do so. With the withdrawal of those funds, if they receive a tax benefit in addition to the existence of the charitable one, you actually have two tax breaks going on there.

Would that be reasonable? Would there be advantages or maybe some disadvantages to such a proposal?

[J. Alexander Houston]

That's a difficult question. It's not a proposal I'm familiar with, so I wouldn't be able to speak to that on behalf of PFC because that's something we have not reviewed. Certainly, it sounds like there would be a whole secondary set of tax considerations if there were two levels of benefits for the donation at that time.

Maybe Mr. Broder wants to...?

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

I'm looking at him as well, as he can tell.

[Peter Broder]

I think this arose with the flow-through shares in terms of the double dip. Then they changed the law.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

I don't care for the term “double dip”.

[Peter Broder]

Yes, sorry.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

That implies somebody is getting something they shouldn't.

[Peter Broder]

Yes, I was going to.... Yes, using the two credits.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

If it's crafted appropriately legislatively, it might be something worth looking at, I suppose.

[Peter Broder]

Certainly.

[The Chair, Conservative, James Rajotte]

You have 30 seconds.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

No, that's fine. Thank you, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Marston.

We'll go to Mr. Komarnicki, please.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Thank you, Mr. Chair.

I'm new to the committee, Mr. Chair, but I have a few questions I'd like to ask. Perhaps first I will direct my questions to Mr. Carmichael.

You mentioned that you'd like to see a higher credit directed to giving with respect to “pressing needs”. I take it that's because in those circumstances people would be more predisposed to give than not, and you're trying to capitalize on that factor.