Thank you, Mr. Chair. I would like to thank you for your invitation and for giving me the floor today.
As an umbrella organization for the charitable and non-profit sector, Imagine Canada is pleased to share its thoughts with you regarding the provisions in Bill C-59 and the federal budget for our sector.
I do not have to remind the committee about the contribution of charitable and non-profit organizations in Canada and around the world, whether in terms of social services, arts and culture, amateur sport, the protection of the environment, education, health care and health research, international development or religious practices.
We keep saying that the charitable and non-profit sector is a major economic asset for Canada. It accounts for 8% of the GDP and employs over 2 million people from coast to coast.
In 2012, this same committee held extensive hearings on the issue of tax incentives for charitable donations in Canada. You heard the testimony of organizations from across the country, you learned about our challenges and possibilities, and you made recommendations to improve our financial health.
Every federal budget since 2012, including this one, has responded to your recommendations.
With regard to Bill C-59, it clarifies eligibility for qualified donee status for foreign charitable foundations. We see this mainly as a housekeeping measure, ensuring that the letter of the law is brought into line with the intent of a previous budget measure.
While we would have liked to see other measures from the 2015 budget included in this bill rather than waiting for subsequent legislation that may or may not come prior to the upcoming election, we appreciate that the department wants to take the time to get the particulars right.
We are pleased that the budget expanded the Mitacs internship program, in which charities and non-profits are now able to participate. Access to specialized research will help many organizations improve the work they do.
We look forward to two budget measures in particular that arose from this committee's hearings in 2012, and which we strongly support.
The first one of these will see a capital gains exemption when the proceeds of selling real estate or private company shares are donated to charity. Members of the committee will know that in terms of encouraging donations from the broadest array of citizens this was not Imagine Canada's top priority. That being said, those of you with whom we have spoken aIso know that we have strongly supported this measure and we were pleased to see it in this year's budget.
We are particularly pleased that the provision will apply to cash donations made from the proceeds of the sale of such assets. While addressing potential valuation issues, this will make it easier for donors to split their donations among a greater number of charities, if they so wish. lt will also make it easier for recipient charities, particularly small charities, to manage the receipt of such donations as they will be dealing with cash donations and will not have to manage assets that may be transferred to them. We are hopeful this measure will translate into hundreds of millions of dollars' worth of new donations over the next several years.
The budget also announced that charities will be allowed to invest their assets in limited partnerships. This will benefit the sector in two ways. First of all, foundations will be able to make investments, which they previously could not do, to diversify their portfolios. Second, operating charities and non-profits may themselves be involved in limited partnerships. The ability of foundations to invest in these ventures could free up significant amounts of capital. While we are waiting for specific details on how this will work, our initial estimate is that tens or even hundreds of millions of dollars could be available annually for partnerships involving charities and non-profits.
These two issues were among those about which this committee heard testimony and made recommendations. By our count, the only significant outstanding recommendation is the stretch tax credit for charitable giving, which we recognize would come at the highest cost to the treasury, as we believe it would have the greatest impact.
I hope that next year I'll be invited back to testify about the adoption of the stretch tax credit. ln the meantime, I want to recognize the significant progress that has been made in budget 2015.
Thank you.