Finance Committee on Oct. 3rd, 2012

[Prof. Calum Carmichael]

My sense is that people might miss how pressing those needs are and that the government could then signal it by the extra tax credit. My sense is that for some organizations where the services being delivered are primarily to the giver—for example, a church or an opera—the incentives are probably correct. People will give, and they'll give the right amount because it benefits them as the giver.

But there are some areas where the giving is actually benefiting others that would otherwise be lost in the view. Witness the two-thirds of private contributions that are going either to religious organizations or to health organizations. Everything else claims the remaining third.

So my sense is that what is pressing is something that the government could decide.

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

In deciding that, would you recommend it be done on an ad hoc basis or in a predetermined way, such as on an annual basis? Or is there a “from time to time” kind of thing to it?

[Prof. Calum Carmichael]

I would think that it would have to be on a long-standing basis. You couldn't change; the needs are ones that are ongoing.

My sense is that poverty or income inequality is one of those characteristics that people, regardless of their faith perspective or age or economic background, would recognize as being important for society; that those without the material means that others have are deserving some assistance.

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

So are you distinguishing that from...?

For example, the dollar-for-dollar that the government gives when there's a natural disaster; you say that's different from what you're talking about?

[Prof. Calum Carmichael]

I'm saying they're both ways in which a contributor can think of their dollar going further for a given purpose.

Whether it's matching, or it is by a non-refundable tax credit, as in Canada, or by a tax deduction as in the United States, these are ways in which tax incentives are built into contributing.

My sense, though, is that those incentives should not be uniform, given the diversity of the charitable sector.

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

Mr. Broder, in the stretch tax credit, am I to understand that it would be a one-time benefit whereby you gave more than you did previously, or would it be each time that you've given more?

[Peter Broder]

I believe the concept is to use a base year and then to average going forward...to use a base for, say, 2012, and then, once the 2013 and 2014 contributions were in, to do an averaging exercise.

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

Is the idea to make people who are not predisposed to give more, to give more, or primarily because of the incentive rather than the need?

[Peter Broder]

I think it's to spur either increased giving from those who are already giving or to bring new people into the donor pool.

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

I understand the tax credit would be 10% for each dollar...that sort of exceeds the previous giving. Do you know why it's the 10%, or how that's arrived at, or whether it's an optimum figure?

[Peter Broder]

I think the idea was to put in place a modest measure to see if this kind of mechanism would trigger an increase in donations.

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

There's no objective basis to say 15% is optimum, or 20%; it's just start with 10% and see what it does?

[Peter Broder]

Not that I'm aware of.

Other people may be more familiar with it.

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

Mr. Hallward.

[John Hallward]

I think there's one other benefit to mention, which is that there's probably also marketing power. If a government made such a move and it got into the press, it would raise attention to the concept and why they are doing it. It would get people talking.

There are other indirect benefits of just bringing philanthropy out of the closet and letting people talk about it and consider it. I think there's an indirect benefit as well.

[The Chair, Conservative, James Rajotte]

Okay. Thank you.

Thank you, Mr. Komarnicki.

We'll go to Mrs. Glover, please.

[Shelly Glover, Conservative, Saint Boniface, MB]

Thank you, Mr. Chair.

I want to thank all of the witnesses for being here.

We actually have four new ideas, which is very exciting. I'm not going to have time to ask everyone, but I would like to go to Mr. Broder on the wills because we haven't talked much about it.

I do note in your submission that you made a number of recommendations with regard to gifts following deaths. I want you to walk me through how this would work. This is something we haven't really talked a lot about, but I do see some value in it.

I want to understand it, so that if it's a recommendation within the report we can articulate it in a way that makes sense.

So walk me through it with person A. You can name him whatever you want.

[Peter Broder]

Okay. This is actually a cross-reference to a submission to Minister Flaherty from our wills and trusts section. The particular measures are highly specific to—

[Shelly Glover, Conservative, Saint Boniface, MB]

Just in layman's terms; let's say “Peter Smith” passes away.

[Peter Broder]

I'll refer that to my colleagues in the wills and estate section and I'll get back to you on that. I don't practice in that area.

[Shelly Glover, Conservative, Saint Boniface, MB]

Okay. I get you. Perhaps they could they give us an example so that we can clearly see how much it would cost. First of all, the government....obviously there's a benefit to the estate for providing a gift in the way that it's described. But if you could give us an example that shows us the cost, plus how it benefits the charities, it would be very much appreciated.

I will go to you, Mr. Houston, with very interesting ideas as well. I want to know, though, how do the folks who now provide funding to the community...the CFF, I guess you're calling it? What do they get as a benefit?

Then, what do you do if a charity loses status? What happens to the loan? We have revocations for breaches, so I just need to understand, have you thought that far ahead?

You've also said that your plan is no-cost, no fiscal cost to the government.

Please help me understand this so that I can articulate it in the report.

[J. Alexander Houston]

What happens if an investment is made in a charity and the charity loses its charitable status? Is that your question?

[Shelly Glover, Conservative, Saint Boniface, MB]

Yes, that's part of it. What is the incentive for people to donate to the CFF? What benefit do they get? Is it just a good feeling?

[J. Alexander Houston]

I see.

[Shelly Glover, Conservative, Saint Boniface, MB]

As well, what happens if you provide a loan to a charity and their status is revoked, or they go bankrupt or disappear or something happens?