Thank you, Mr. Chair.
My thanks to the committee for inviting me to testify before you today.
As you know, Imagine Canada is the national umbrella organization for the charitable sector in Canada.
As committee members, you are well aware of the contributions made by charitable organizations in areas as diverse as education, arts and culture, amateur sport, youth services, international development, the environment, health care and religion.
You know from experience the contribution made by charitable organizations in your constituencies to the quality of life; they make Canadian communities pleasant places to live, work and invest.
What is less well known is that charities together with public benefit non-profits generate more than 8% of GDP and employ two million people every day in Canada. We're one of the fastest growing sectors, yet we're reaching a point where demand for what we do is outstripping our financial capacity to deliver. As we work to strengthen the financial footing of charities, we welcome the opportunity to partner with the federal government to unleash the tools through taxation and regulatory reform that will allow charities to meet demand.
Our first recommendation is the stretch tax credit for charitable giving, to help Canadians increase their donation over time and make giving a lifelong habit. Unlike some tax credits that reward people for what they are already doing, the stretch only triggers a government investment if and when Canadians change their behaviour by increasing their giving over the previous year.
This committee has heard a great deal of support for the stretch during the incentives for charitable giving hearings, and you recommended it for serious consideration once the books were balanced. The government took note, and in addition to announcing the super credit in budget 2013, also made the following commitment:
...the Government will work with the charitable sector, including Imagine Canada, to encourage more donations by a greater number of Canadians....
The first-time donor’s super credit was an encouraging start. Now it's time to finish the job by helping more Canadians to do more.
What would the stretch mean? It would mean more dollars for the widest array of good causes, more investment in every community, and broad-based tax relief. It would mean that donations that have stagnated would begin to grow again, as more than half of donors say they would increase their giving if there were better tax incentives. What better investment could we make as we approach the 150th anniversary of Canada than to give Canadians from all walks of life and all means the tools to better invest in their own communities and in the causes that make a profound difference in their quality of life.
This fall we asked charities across the country to connect with their members of Parliament, as they are best placed to let you know what the stretch would mean for their organizations and their own communities. In only the first six weeks of the campaign, over 150 MPs have received letters, e-mails, phone calls, and visits from local charities, and we're just getting started. We hope we can count on all committee members to strongly endorse the stretch in your pre-budget report.
Our other two recommendations this year deal with regulatory issues and also get at the heart of charities' financial resources and sustainability.
The first of these is merchant fees on credit card transactions. Last year's budget signalled the federal government's concerns about these fees, which are disproportionately high in Canada. Proposed legislation in the Senate would, among other things, eliminate these fees for registered charities. Merchant fees have a real and significant impact on charities' bottom lines. They divert millions of dollars that could otherwise be invested in responding to the growing demand for charity services.
We understand that regulation is a last resort, and we recognize that a voluntary arrangement may prove preferable. Either way, charities must be invited to the table and benefit significantly from much-needed reforms.
Finally, we hope to see some explanations and possible changes in terms of the regulatory and administrative obstacles that limit the access of charitable organizations to federal services that provide advice to companies when they are seeking new sources of revenue. This is particularly important because governments are looking for new forms of social financing and entrepreneurship in order to fund vital initiatives that involve charitable organizations. The economic contribution of charitable organizations in Canada is huge already; giving them access to those tools would allow even more growth.
Thank you very much.