Mr. Speaker, I rise to make a comment on this important piece of legislation, Bill C-93, an act to amend the Cultural Property Export and Import Act, the Income Tax Act and the Tax Court of Canada Act.
I congratulate the member for Erie for laying out the provisions of Bill C-93. I want to explain to Canadians in very straightforward language what those provisions mean. It is extremely important for Canadians to note, as was expressed by the member for Erie and by the previous speaker, the member for Winnipeg St. James, that this is not a bill that is directed, as Reform would paint it, to somehow provide benefit to the rich. To demonstrate that, I did a little calculation of what the implications might be.
If taxpayers were interested in making a contribution of a book, an artefact, et cetera, to a museum, library, et cetera, and the contribution were deemed to have a fair market value of $1,000, assuming their original cost of acquiring it many years ago may have been $100, under the current tax act if they were to sell that artefact to a museum they would realize a capital gain of $900. Half that capital gain is taxable. Reform is saying this is a rich man's scheme, so let us assume the highest marginal rate, in which case they would pay tax of $225 on the taxable capital gain. That means that the net cash to the owner of the artefact would be $725 on the sale to the museum of the $1,000 artefact.
The legislation provides a tax credit to the donor of the artefact. If that artefact is shown to have a fair market value of $1,000, the tax credit would be 17 per cent on the first $200 and 29 per cent on the balance. In total, the tax credit or the reduction of taxes otherwise payable would be some $266.
It really comes down to a matter of cash. A straight sale would generate $775 to the taxpayer who sold the artefact to a museum. If a tax credit system is used, the donor only gets $266. In that regard it is clear that those who are prepared to donate to our cultural and heritage institutions assets of value that have been determined by a rigorous process of review and assessment would be receiving in real cash terms substantially less than if they had sold them directly.
If we are talking about true value, as the hon. member for Winnipeg St. James spoke of so well, since our cultural institutions have very little or no real cash to acquire assets this is really the only way to allow them to acquire those assets. It allows those institutions, the libraries, the archives, the galleries, et cetera, to remain current in terms of the cultural and heritage artefacts and documents that are available. It allows them to be competitive. It allows them, as the hon. member for Winnipeg St. James indicated, to continue to attract Canadians and visitors from around the world to visit our cultural and heritage institutions.
It should be clear to Canadians that in Bill C-93 the mechanism of a tax credit allows our Canadian institutions to acquire these items at substantially less cost than if they had to buy them at their fair market value. Considering also the tourism value that is generated through our cultural and heritage institutions, there is no question that the bill provides a very advantageous arrangement for all Canadians.
The hon. member for Erie might want to amplify or comment on the benefit to Canada that will be generated as a result of the provisions of Bill C-93.