House of Commons Hansard #130 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was agency.

Topics

Canada Customs And Revenue Agency ActGovernment Orders

5:15 p.m.

Liberal

Walt Lastewka Liberal St. Catharines, ON

Madam Speaker, I can understand where the member is coming from with respect to the various reports that were compiled during the consultation periods. That is one of the reasons this government has taken excessive consultation time to meet and review with people and to hear what people are saying about the reports. When we have a chance to present legislation we take all of these items into account.

I want to remind the member opposite that a number of people, whether they are chartered accountants or people involved in tax areas, have said over and over that this type of legislative framework will provide more efficiencies and stronger management.

The Canadian Federation of Independent Business said: “If we combine all these functions under one umbrella, the business community would breathe a big sigh of relief”.

When the time comes and this bill is in committee, the stakeholders will again have a chance to understand exactly what is in the legislation, what is intended, and their viewpoints will be heard again.

Canada Customs And Revenue Agency ActGovernment Orders

5:15 p.m.

Reform

Roy H. Bailey Reform Souris—Moose Mountain, SK

Madam Speaker, I would like to make a brief comment and put a question to the hon. member.

Would the hon. member not agree that in the length of time it has taken to consult on this bill that perhaps they have not done a good job of selling the proposals? Today, with the bill in its current form, the majority of the provinces have not definitely said whether they will be on board. We have not heard from the largest provinces as to whether they will be coming on board.

Would the member not agree that perhaps what we have to do is call in some super salesmen to sell it to the provinces now, before the legislation is put in place, to avoid each province having to negotiate changes within the act to suit it?

Canada Customs And Revenue Agency ActGovernment Orders

5:15 p.m.

Liberal

Walt Lastewka Liberal St. Catharines, ON

Madam Speaker, I understand where the member is coming from.

I would remind this House that provincial ministers of finance were a part of the consultation process. Many provinces have provided input. The member opposite will be able to provide input. There is always room to make improvements. That is why we are here debating the bill. We are here to look at the legislation as well as other things. It is not a one way street. One cannot just sit over there and oppose everything. One has to be constructive from time to time. That is what committees are for.

This legislation will come back to the House and hon. members will again have the chance to debate it and make it even better than it is. I hope there is more constructive criticism from members opposite.

Canada Customs And Revenue Agency ActGovernment Orders

5:15 p.m.

Bloc

Antoine Dubé Bloc Lévis, QC

Madam Speaker, I am pleased to speak to Bill C-43 to create the new Canada customs and revenue agency.

Before I start, I know I will probably not have enough time to finish my remarks. I hope to have the opportunity to continue when we next examine this bill.

I would begin by congratulating my colleague, the member for Rivière-des-Mille-Îles, for his good work. I heard his speech this morning, in which he presented a whole series of arguments. I felt the agency served some purpose, but was not relevant because a department of revenue already exists. My colleague's arguments were well founded.

Once again, the member for Rivière-des-Mille-Îles has shown how attuned he is to his constituents and to the groups concerned by these issues.

First, let us talk of the government's objectives in the 1996 throne speech. The first objective was to provide programs and services more effectively and cost efficiently through greater autonomy and flexibility. I want to focus on the words “more effectively and cost efficiently”. I think everyone agrees on “cost efficiently”. The more it brings in, the more it is in the public interest.

However, I have a few questions about the “more effectively”. The understanding is more effectively than at present. At the present time, those responsible for tax collection are employees of Revenue and Customs, in other words public servants. I am told there are about 18,000. There is a message in this. Is it being implied that the 18,000 people assigned to taxation are not efficient and are not doing their job properly so that it will be cost-effective? The government has presented this as its first objective.

This is not surprising, when one realizes that the tendency within this government is a desire to privatize. This is something to be considered per se, but what is involved is a service that is already provided. It is not a new service, but one already being provided. The agency will not be totally privatized, but it will not be covered by the legislation which governs, and will continue to govern, all other public servants at the federal level.

I do not wish to worry people needlessly. I do not even need to do so, anyway, because I have seen a letter to the hon. member for Rivière-des-Milles-Îles by the taxation employees' union. They are all worried about this. They wonder what might happen to them. Behind it all lies the fear of being shunted aside. Perhaps a number of them may be hired again by the new agency, but they do need reassurance.

The second was to improve services—and who could be against that—and to reduce the cost of administering revenue and compliance by working in conjunction with the provinces in order to eliminate duplication and overlap. The key words in this are “working in conjunction with the provinces”. The concept of “co-operation” is understood. Generally, the purpose is harmonization.

“Working in co-operation” is all very fine-sounding and is a good objective as far as it goes. But what is actually happening? When we check with each of the provinces, not just Quebec, they say they are not in agreement and that, before they sign on, they will want to give it some thought because they are not at all sure this is a good thing. How can the government get away with saying in the throne speech that it will be done in co-operation with the provinces, when the provinces are not in fact interested in working together in this context, since they are apparently going to lose their powers, especially Quebec, because Quebec has its own revenue ministry. Moreover, it is the only province that does, having had one for a very long time. In this regard, Quebec wants to keep its powers and its responsibilities.

A third objective was mentioned, which we no longer hear anything about today, but which was in the throne speech: “Strengthen the federation's effectiveness and enhance national unity by making the agency an organization responsible for providing Canadians with federal and provincial services”.

When this was first announced, it obviously resulted in some discussion here in the House and elsewhere. We in the Bloc Quebecois, and Quebeckers in general, reacted back then, and we feel no differently now. Except that we notice that the government members no longer mention this objective. But once bitten, twice shy. Just because the government no longer mentions this third objective from the throne speech does not mean it is no longer guided by it. These were statements of principle, the government's intentions and policies until the next throne speech.

This objective no doubt remains. In my opinion, it is part of the current Liberal government's plan A, because, while it is a gentle approach and not a stick, it remains a tendency of the current federal government, which tries to meddle in provincial matters and increasingly expand its control over them.

But with the creation of this agency, it is not doing so directly, but indirectly, rather as it did with the millennium scholarships. Members remember the famous millennium scholarship fund. The federal government could not do it directly, so it set up a private foundation, an agency of sorts, to do indirectly what it could not do directly.

I am no lawyer, but I know the public is discouraged from indirectly contravening legal provisions. The same is not true for the government. It sets up agencies, it takes an indirect and convoluted approach to achieve its ends. Even though it is no longer raising the issue of so called national unity, the federal government, in the end, wants to collect taxes and take over the mechanisms that bring in new revenues with an independent agency.

I am a sovereignist. I do not hide the fact. Neither do the member for Rivière-des-Mille-Îles or the members of the Bloc. However, we are still in the federal system. The people in the other parties, whom I respect, have another opinion. They are federalists and want to stay within the federal system. They often consult the Constitution. I too have read it. We know about the Constitution.

I also know its history and the facts surrounding it. In 1867, when Canada's Constitution was drafted and passed, those who have studied it will recall that the federal government did not collect taxes from either individuals or companies. The provincial governments did. It was during the two world wars—the 1914-18 one and the 1939-45 one—that the federal government asked the provincial governments, in the light of the exceptional circumstances, to allow it to collect income tax.

Subsequently, having tasted the pleasure of collecting taxes, the government wanted to continue. Ontario finally agreed, but Mr. Duplessis, who was then Premier of Quebec, created his own department of revenue. That is the history of the two tax returns: one for the federal government and one for Quebec. They go back to that time. However, I will have the opportunity—

Canada Customs And Revenue Agency ActGovernment Orders

5:25 p.m.

The Acting Speaker (Ms. Thibeault)

I must unfortunately interrupt the hon. member and tell him that he will have some nine minutes when we next resume consideration of the bill.

It being 5:30 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

The House resumed from June 1 consideration of the motion.

Charitable ContributionsPrivate Members' Business

October 1st, 1998 / 5:30 p.m.

The Acting Speaker (Ms. Thibeault)

The hon. member for Prince George—Peace River has six minutes remaining.

Charitable ContributionsPrivate Members' Business

5:30 p.m.

Reform

Jay Hill Reform Prince George—Peace River, BC

Madam Speaker, how did I manage that? I have never spoken to this bill.

Charitable ContributionsPrivate Members' Business

5:30 p.m.

The Acting Speaker (Ms. Thibeault)

I would ask the hon. member to start the debate right away. In the meantime the clerk will check the records for the last session.

Charitable ContributionsPrivate Members' Business

5:30 p.m.

Reform

Jay Hill Reform Prince George—Peace River, BC

Madam Speaker, it is a pleasure for me to rise this afternoon and briefly address Motion No. 318 placed before the House by my colleague from Fraser Valley.

Motion No. 318 states:

That, in the opinion of this House, the government should bring in legislation making the tax deduction for contributions to charitable organizations no less than the tax deduction for contributions to political parties.

If we were to flip that motion around and stand it on its head, it would really state that gifts to political parties should not be given more favourable treatment than donations to charities. That is how we need to look at this motion. The intent is clear. It is to level the playing field between donations to political parties and those which accrued to charities.

I compare this motion to the Reform blue book policy that deals with political donations. There has been some concern expressed about that and why my esteemed colleague would bring forward a motion that on the surface would seem to be contrary to Reform's blue book policy.

Reform policy in the blue book under the heading of electoral reform states: “The Reform Party opposes any assistance to political parties and political lobbies from public funds including—” and it lists a number of things. In that list is tax credits for contributions to federal political parties. That is the policy of the Reform Party. Certainly it is a policy that my Reform colleague adheres to, as do I. If we were ever to become government, or when we become government, we will enact that as well as a number of other policies.

In the meantime, it has become painfully clear to charities that this government does not intend to address the inequity between the donations to political parties and those to charities by removing the tax incentive to donate to political parties, as the Reform Party would do.

Therefore my colleague took it on himself to bring forward Motion No. 318 which would level the playing field between the two and treat them the same. Unfortunately we see that in some cases people who are looking at making a donation might be encouraged to make a donation to political party rather than to the charity of their choice. It is very unfortunate that they might tempted to do that because the tax incentive is so much greater.

How unfair is the present system? It was noted in the debate last spring that for a $100 dollar contribution to a political party a donor will receive a $75 federal tax credit. For a $100 donation we have a 75% tax credit. For a $100 gift to a charity the donor will receive a $17 federal charitable donation tax credit. That is $17 versus $75.

To receive a tax credit of $500 for a donation to a federal political party an individual would have to give $1,150, and to receive that same $500 tax credit a donation to a registered charity would have to be in the amount of $1,807.90. Clearly a gross inequity exists. My colleague is attempting to address that by putting forward Motion No. 318.

I think it would interest the viewing public at this point in the debate to ask what are we talking about here. How many charities are we talking about? There are roughly 80,000 registered charities in Canada and in 1996, 5,451,860 donors gave approximately $4 billion. We are talking about a substantial industry, as it were, in the sense of charitable organizations. They employ a lot of people and they certainly do lots of good work.

I see the Chair is telling me I have one minute left. I must have spoken on this issue previously. I thank the Chair for the correction.

On such an important motion I could go on at great length but I will sum up by stating the obvious. This motion is votable. It is not too often that members of this place have a great opportunity to right an injustice.

When we come to vote on Motion No. 318 we can seize the opportunity and vote to level the playing field and treat both these things the same. I urge all members of the House to do exactly that.

Charitable ContributionsPrivate Members' Business

5:35 p.m.

NDP

Nelson Riis NDP Kamloops, BC

Madam Speaker, I am pleased to support this motion put forward by my hon. colleague.

The motion provides us with an opportunity to make a number of appropriate comments around the whole issue of charities. As the previous speaker indicated, we are talking about 80,000 organizations which have been identified as legitimate charities in this country.

The definition of a charity needs some work. I think the definition we use goes back many decades and I suspect that the nature of charity and charity work in Canada has changed significantly from the 1920s and 1930s.

One thing we can say is the recent years of government deficit fighting efforts have really hit charities hard. Charities in Canada now unfortunately have to designate an inappropriate amount work by volunteers simply pursuing fundraising activities.

I think we all appreciate that those who volunteer and those who work for charities are really those people who weave the social fabric of which we are so proud in our country. These are the people who donate their time, effort, energy, talents and in many cases money to enable these charities to provide the services that hitherto governments often provided. Because of the reduction in government services, because of the downsizing of government, because of the trimming of government budgets, we now are looking toward charity organizations to pick up that void and to provide more services than ever before.

It is a bit disappointing to read the information that has been provided in terms of charitable donations. They are at a virtual standstill. The growth simply is not there. The Canadian Centre for Philanthropy says that we have to find ways and means to encourage more Canadians to participate in the development of the social and supportive caring fabric of our country through charity giving.

Recently the Standing Committee on Finance made the following recommendation: “Government should consider enhancing the charitable tax credit for donations to charities currently funded by government to make it as generous as the current political tax credit for small donations to political parties”.

Let us acknowledge the fact that in our effort as a country, which I support enthusiastically and which I endorse, we encourage people to participate in the democratic process. There is no question that for a democracy to work effectively, people have to participate as directly as possible. Therefore, as we all know, for a $100 contribution to a political party in Canada the donor will receive a $75 tax credit. That is a real incentive for average men and women across the country to make donations to the political party of their choice. We endorse that.

As a result, I think it is fair to say that when we look at the political contributions to at least some of the political parties, a massive number of Canadians participate in supporting the political party of their choice as a result of this rather encouraging tax write-off.

The motion states:

That, in the opinion of this House, the government should bring in legislation making the tax deduction for contributions to charitable organizations no less than the tax deduction for contributions to political parties.

I support that principle. As other speakers have indicated, Motion No. 318 does not specifically recommend that the government increase the tax credit for donations to charities from 17% as it is now to 75%, although this is an option. Rather, it allows the government to use its discretion to choose the optimal tax credit rates, making sure the charity tax credit is no less than the political tax credit.

I want to flag a concern at this point. I know this is votable. I want to indicate an area that I think deserves consideration. Representing the voices of the New Democratic Party, we are not suggesting that the level of political contribution should be reduced, but we are saying that the deduction for giving to charities should be increased to that same level.

We are talking about those that are the weavers of our social fabric and now we look more and more to those in the charity sector and the volunteer sector to provide that level of service. We think it is appropriate to re-examine this whole issue. I think all of us would say that 17% is simply inadequate, that it does not reflect the reality of our country.

Is it appropriate that people who donate their energies to the charity of their choice spend such an inappropriate amount of time raising funds? I do not think an evening goes past now when in our places of residence here in the nation's capital or back in our own constituencies there is not a knock at the door from someone raising money. Sometimes three or four times in the evening there is a knock on the door and somebody is asking for a donation to a particularly worthy cause or a worthy initiative or a worthy endeavour.

You make the contributions because you realize that if you do not, that person will not be able to carry out the charitable work they wish to do. But it troubles me that that person has to spend that evening going door to door raising funds and not out providing the service or doing the charitable work that person is actually interested in. They do not join these organizations to go on fundraising activities.

I think this is a step forward. I think it is a step in the right direction. That is why I say on behalf of those of us in the New Democratic Party that we are pleased to support this initiative by my colleague for Fraser Valley.

We are not suggesting that we reduce the tax deductions available for political contributions but that we enhance those associated with charitable giving.

I want to talk a bit about the simplicity of the matter. We have to acknowledge that there are two sets of rules: one for charities and one for political parties. Therefore, if the tax system treated political parties and charities equally the system would be simpler to explain, certainly a lot simpler to write and a lot simpler to understand.

There is one thing we should strive for as parliamentarians during these complex and changing times. We look at tax forms and shudder and dread the day we have to sit down at a table to try to figure them out, fill them out, or dread the day we have to hire an accountant to do that on our behalf. We have to struggle to make such forms simpler.

The motion would move us in the direction of simplifying the tax return and making it equivalent in terms of whether one is making a political contribution or a contribution to one of Canada's worthy charities.

It is a big business. It is a $4 billion business annually. We are talking about a considerable amount of money relatively speaking. We have to acknowledge that this unfortunately is a growing trend, that more and more the realities of our fiscal programs suggest that charities will be providing those necessary and crucial services in the future.

We have always relied on charities, but changing times make them even more important today. It is with enthusiasm that we support the motion. We are looking forward to the vote and we are looking forward to seeing legislation move through this House and subsequently on to the other place, and the sooner the better.

Charitable ContributionsPrivate Members' Business

5:45 p.m.

Liberal

Lynn Myers Liberal Waterloo—Wellington, ON

Madam Speaker, I welcome the opportunity to participate in the debate on Motion No. 318. I will begin by taking a few minutes to respond on behalf of the government to the motion put forward by the member for Fraser Valley.

Let us be clear. The government recognizes the motivation for the hon. member's motion and fully supports the principle of offering generous tax assistance to charitable giving. The purpose of the present tax regime with respect to charitable giving is to encourage larger donations. The current tax regime was put into place in consultation with the charity industry.

Through the work and assistance of the Standing Committee on Finance stemming over a period of four years of prebudget hearings, the tax treatment of charitable donations has evolved to the point where we are now beginning to see a stronger and more vibrant charity industry. That is a good thing.

In fact the government has provided additional incentives to charitable giving in four of the last five federal budgets. Measures have been included and adopted. The first is lowering the threshold for eligibility for the 29% level of the tax credit to $200 from $150. The second is raising the annual income limit for the use of charitable donations to most charities from 20% when the government took office to 75%. The third is reducing the income inclusion rate for capital gains arising from the donation of appreciated publicly traded securities to 37.5%.

These measures are very important. The hon. member should recognize that the differences in the treatment of political contributions and charitable donations reflect the different policy intentions of the two measures. The design of the federal political contributions tax credit reflects the desire to encourage greater grassroots involvement by all Canadians in the political process.

For this reason generous tax assistance is given to small political contributions. This tax assistance is reduced by incremental amounts to the point that federal tax assistance is eliminated for amounts contributed to federal political parties in excess of $1,150 per contributor per year.

In contrast, tax assistance for charitable donations is greater for amounts in excess of $200 in order to encourage larger donations to charities. This type of larger scale giving allows for a greater measure of stability and predictability for those charities.

Indeed in the case of very large donations tax credits may be claimed for donations up to 75% of the taxpayer's income in any given year. Tax credits then may be carried forward to future years should the 75% limit be exceeded.

Recently we have witnessed the important role the present tax regime has played in charitable giving. The charitable industry has reported seeing more large scale donations from individuals than ever before. In particular, it has witnessed this trend following the implementation of the 1997 budget which contained provisions allowing for reduced taxation of capital gains on publicly traded shares given to registered charities.

I was interested recently in reading in the Globe and Mail that they called this tax change, which effectively cut in half the capital gains tax that donors pay on such gifts, a bonanza for the charity industry. The University of Toronto, for example, has received more than 70 individual contributions of $1 million or greater during its current fundraising drive.

Gorden Floyd, director of public affairs at the Canadian Centre for Philanthropy, recently stated that the charities have “all seen a real surge in major gifts or stock since the legislation change. It is important to see that take place.

Meg Beckel, executive director of the Royal Ontario Museum Foundation, has also noted an increase in tax driven gifts to charities, particularly from new beneficiaries. He states:

Since 1997 we have received gifts from individuals in the form of shares that we would not have otherwise received. It has made a real difference.

The incentives for large scale giving also have borne fruit in terms of a new community foundation movement which is a collection of endowment funds committed to local projects. A coalition of leaders heading up this movement recently announced in Calgary that its collective assets are now worth more than $1 billion. This announcement is clearly good news for communities. I think that is something with which all of us in the House can agree.

These foundations tend to fill a unique need in that they are funded locally in their base projects in the community and in the country in almost every province. Gifts to such foundations can be allocated in many ways including a general community fund or a specific cause.

A little more than a week ago members of a youth advisory committee from the Calgary Foundation announced a series of grants that they were being awarded including $1,000 to a high school program that helps with the integration of immigrants and $500 to a Hispanic youth centre.

This type of community action by these foundations is very encouraging, helping to reinforce in our collective notion the relevance and importance of community in an increased and ever globalized world.

We can see from these examples the tax regime that has been put into place has been working to maximize the benefits of charitable giving both for individuals and for charities in the important work that they carry out. Charities have mushroomed into an $88 billion affair spreading through 76,000 organizations ranging from hospitals to houses of worship, to social services. There are another 100,000 not for profit agencies as well.

By any measurement that we might choose this industry has been growing more important and stronger every year under the present tax structure. While we have seen that large scale giving has been greatly affected by tax incentives, we have also found that the donation of small amounts to charities has not been strongly motivated by the availability of tax assistance.

Consequently the greatest effect of this proposal before the House would be to increase the fiscal cost of tax assistance according to donations that would in all likelihood have been made in any case.

There is one further and important note: the level of tax assistance accorded most charitable donations results in a roughly 50:50 partnership between government and the private sector in support of charities. That is important to note.

This is consistent with the principle that although charities promote the public good they have direct control over their activities in these areas and their priorities will not generally be identical to those of government. Increasingly tax assistance for small donations would not have been in accordance with this principle.

The government cannot support the motion for the following central reason. The current design of the current charitable donations tax credit acts to encourage larger donations while recognizing the value of smaller donations. The greatest impact of the motion would be to increase tax assistance accorded to donations that would have been made in any case.

In conclusion, I want to simply say that tax assistance accorded charitable donations as we have seen by the growth of the industry is already very generous.

I thank the hon. member opposite for bringing forward the motion for debate. We are all reminded of the importance of charitable giving and the worthy causes that are pursued through such work. In that we all benefit.

Charitable ContributionsPrivate Members' Business

5:55 p.m.

Progressive Conservative

Greg Thompson Progressive Conservative Charlotte, NB

Madam, Speaker, it gives me pleasure to rise on behalf of my party to speak to Motion No. 318.

Under the current Liberal government in power personal income taxes are among the highest in the industrialized world. Quite frankly Canadian people are being taxed to death. Even on such things as individual charitable donations the Canadian public is not given a break. In the meantime the government has been cutting and slashing social investment grants and funding to charitable institutions to the extent that many have difficulty keeping their heads above water.

The wording of the motion before us is worth looking at. The motion calls for the government to bring in legislation making the tax deduction for contributions to charitable organization no less than the tax deduction for contributions to political parties. Presently, as has been stated by others this evening, if a donor contributes $100 to a political party he or she would receive a $75 federal tax credit. The same individual who contributes $100 to the cancer society would only receive a $17 federal tax credit. That is the problem that the motion is attempting to address.

The motion is cleverly worded, for the lack of a better expression. Motion No. 318 does not specifically recommend that the government should increase the tax credit for donations to charities from 17% to 75% although this would be an option. Rather, it allows the government to use its discretion to choose optimal tax credit rates.

This is a bit of a cop-out in terms of the motion before us. The motion is laudable and worth consideration, but it is obviously putting the onus back on the government. Any motion should clearly define exactly what it is going to do, for obvious reasons.

It is fashionable and almost honourable given the political atmosphere out there to attack politicians and political parties. We have a pretty good system of tax relief and tax credits for individuals who want to contribute to political parties. The $100 donation winds up giving a $75 tax credit. There is a lot of good in that.

Another side of the argument says that could be and possibly should be reduced. We do not want to fall into the same kind of political financing as has happened in the United States of America where $1 million campaigns are the order of the day and there is basically no limit on political financing. In this country it is possible for ordinary Canadians to get elected and to contribute to political parties. There is complete transparency in the process. I do not want to see that diminished in any way and that is part of the consideration this evening.

A speaker from my party debated this issue a few months back. However, one component we do not want to overlook in this equation is the clambering for special tax status if this change ever came about.

I think my Quebec colleague would agree with me. How many of us in this House of Commons regardless of political party have been approached by groups that want special tax status as a charitable donation. They want to be recognized as a charitable organization. The line up would be endless if we changed the system significantly. There would be so much clambering it would be unmanageable for the government.

There is a danger in a wholesale change of the system. That leads into the argument, and of course this was on debate today as well, about the Canadian tax system and the complexity of the Canadian tax code. If the Canadian tax code were laid here next to me, it would dwarf me. It is much taller than my six foot two inches.

Our Canadian tax code is overly complex. I do not think there is any one of us in this House that does not use the services of a professional accountant to do our income taxes at the end of the year. I certainly have been using one for years. Most of us do because of the complexity of it. It is one of those things we no longer want to do ourselves for obvious reasons. It goes right back to the word complexity.

This is interesting and quite humourous. It is an interesting reflection on the complexity of our tax code and why we are forced into hiring professionals to compile our taxes. I lent this line to the member for Kings—Hants who used it today in the House but I am taking credit for it as if I invented it. The complexity of the tax code forces us to use professionals to compile our taxes for us. They say that compiling our own tax returns is the only do it yourself project that could land us in jail if it is not done to perfection.

I do not think we want any more complexity in the tax code. I think we would like to see a levelling of the playing field in the sense of charitable donations versus political donations, but it has to be thought through.

The efforts of the member have to be commended. This goes beyond partisan politics. I do not think there is a member on either side of this House who thinks government can be the be all and end all, the sort of blanket approach to curing all the ills of society. We have to leave part of it up to charitable organizations in our hometowns, our churches, all the various organizations that do good across Canada each and every day. We do not want to see that end. We want to see that enhanced.

The value in this member's motion is that if charitable associations were given better tax treatment, the resources and the money these organizations would have to help our friends, neighbours and often ourselves through those charitable donations would most likely increase. That would be a good thing. It would take some of the onus off the government to do the very things that governments today are doing.

Some of the programs governments are engaged in from time to time in that blanket approach, and this government is no different, sometimes do not work. What is good for Newfoundland sometimes is not good for British Columbia. That is on any given day of the week. That happens. Quebec, Ontario or the rest of the country.

The organizations that deliver services best are usually the ones in our backyards. We have to do everything possible to enhance that type of giving and that type of ownership of our hometowns.

We commend the member. He is on the right track. I would like to see this idea carried forward and the government come up with legislation that would address this inequity in our tax system.

We are prepared to support the motion. The onus then goes back on the government to take this motion seriously and introduce tax law that would change the status quo.

Charitable ContributionsPrivate Members' Business

6:05 p.m.

Reform

Philip Mayfield Reform Cariboo—Chilcotin, BC

Madam Speaker, I am pleased to participate in this debate in the second hour of our consideration of Motion No. M-318 introduced by the hon. member for Fraser Valley. I remind the House of the motion we are debating, that in the opinion of this House the government should bring in legislation for making the tax deduction for contributions to charitable organizations no less than the tax deduction for contributions to political parties.

I have been a part of the charitable sector of our country for a lot longer than I have been a part of the political sector, so I speak to this motion with a degree of personal conviction and I support it.

I am reminded of the history of our country and the large part charitable organizations have played in that history, for example, in the growth of hospitals and schools. The community charity sector and the churches provided relief and assistance to those who were beyond their own means to look after themselves.

We are all well aware of the enormous benefits all of our country derives from the generous contributions and the generous efforts of various charities and the people who support them. To say these are not important is nonsense. We cannot diminish it.

For example, St. Paul's hospital in Vancouver is a hospital that belongs to the Roman Catholic Church. I am sure the church does not wish to do this but if it did it could remove those services. Here is an organization that has provided hospital care and educational facilities like schools for the full duration of our country's history.

To give a snapshot of charities in Canada, in 1996 nearly five and a half million people gave about $4 billion to the nearly 80,000 registered charities in this country. That is a lot of money. Charitable organizations are major employers in Canada as well as major contributors. They employ approximately a million people. We are not talking about an insignificant sector of our country.

I cannot fail to mention what it meant to charities when the government decided to cut back on the value of contributions by limiting the tax deductions available. Speakers have mentioned a number of times that you get $75 out of $100 on your tax receipt for political purposes and a $17 receipt for a $100 contribution to a charity.

I am not speaking against political parties and the need for people to participate in the political life of our country. This is important. I do believe the Canadian people put a lot more emphasis upon the need for people to participate voluntarily in the lives of our communities. Tonight we are discussing an issue of participation, the avenues of participating and the willingness of the government to facilitate that participation through gifts and activities.

I am reminded that charities may be around knocking on doors for the money they need. Often the money they use is simply to operate the machinery that provides an avenue for other people to contribute their time in large numbers of hours in a whole variety of ways.

Charities support a wide range of activities and provide a wide range of services, everything from health and welfare to athletics. Their contribution to the quality of life of individuals and the community is greatly appreciated and proven.

What would it be without those services that are given freely and generously by Canadians? This is even more the case in today's world as most of us have had to tighten our belts. We have seen this not only in our individual lives but governments in particular have had to change the way they spend public funds.

When I was a minister looking after a church and the needs of people in Vancouver, I was well aware of the consequences of the government's decision to take people out of the mental health institutions and move them supposedly to community based care. However, there was no community based care. We found large numbers of people walking on the sidewalks unable to care for themselves. And who but people like the volunteers, the Canadian Mental Health Association, the hospitals and the churches were able to look after these people.

I am aware that more people can give more money to charities. It has been mentioned that 75% of a person's income can be contributed to a charitable organization for a tax credit. However, how many people have it in their ability to contribute 75% of their income?

There are some who can, but these are not the people who get up in the morning and go to work every day. These are not the people who need to have all that they have to care for their children and families, to pay the mortgage and to look after their own immediate needs and if they are lucky, have a little bit left over to contribute to their favourite charity. Many people because they cannot contribute money, contribute time, but the time and the money go together.

I think it is a red herring to suggest that the government has provided opportunities for people to contribute more and more generously, when in fact the government has limited these opportunities and provided opportunities for people who are wealthy and can do this. In fact, the wealthier one is, the more one can contribute and the more benefits one can get for contributing. However, this does not speak to the needs of the average man and woman, their families and their desire to participate freely and voluntarily in contributing their time and money.

Charities have to work harder to ensure that people do not fall through the cracks. With the lack of adequate funds, it is becoming increasingly difficult for them to do this. This is why we see charities resorting to bingos and lotteries. As well they send vehicles from door to door to pick recyclable items and use this as a means of income.

It is estimated that for every 1% the government cuts from social service programs it takes an increase in donations to charities of nearly 6% to maintain the level of services. This increase is not happening. The charities are not getting this kind of increase. As a result, those who most require these services are not getting the assistance they need.

Individuals who donate to specific charities also want to have a say in where their money is going. This is not the same as when we hand over our money to the income tax department. It takes it with very long teeth and with the threat that if we do not do it, we may go to jail or it may raid our bank accounts. However, by giving to a specific charity we are supporting a self-approved activity and supporting a cause personally.

On the other hand, governments must identify needs to allocate the necessary resources to meet those needs. We know that needs to happen. We also know that political parties need to have money for their members to participate in the political process.

The reason we are asking this House to approve this motion is that this type of participation is just as important in the charitable sector as it is in the political sector.

I would encourage hon. members in the House to vote for this motion, particularly those members of the government party who are thinking that they should vote against it because it is going to cut back on government resources for their programs.

We have enough government. Our government is massive and big. We need to provide opportunities for individual Canadians to participate more and more on a personal basis with their time and with their means.

Charitable ContributionsPrivate Members' Business

6:15 p.m.

Liberal

Stan Keyes Liberal Hamilton West, ON

Madam Speaker, at first blush my constituents are probably sitting in their living rooms right now saying “This is a heck of a good idea”. I was sitting in the lobby and thinking, at first blush, “This is a really good idea. Let us give those charitable donations more of a tax break than they currently get”.

Then I looked at the proposal. The proposal is being put forward by the member for Fraser Valley, a member of the Reform Party. The bells started going off. I began to think “What is it they want to do?” At first blush my constituents would say to me “What they want to do is make the tax credit for charitable donations at least as generous as the credit accorded political contributions. That is exactly what they want to do”.

Why do we not look at the mirror image of what they are proposing? The Reform Party's selective use of the facts in any particular issue is what any opposition party relies on. They rely on only telling so much. If they tell more it makes things very difficult and they do not get the support they need on a particular bill.

Let us look at the whole story, the whole situation when it comes to a tax credit, whether it is political or charitable. I will tell this to my constituents because it is important. Let us say that Stan Keyes received a $100,000 donation to his political campaign. That is very generous. I would appreciate it. But the only tax relief they would receive on that $100,000, to a maximum, would be $1,150. That is it.

That same constituent could say that it was not enough to give money to Stan, that they would also like to give $100,000 to the St. Joseph's Hospital Foundation in my riding. The Reform Party will not tell us that the tax credit they would receive on that donation would be far greater than they would receive giving the $100,000 to me. That is right. Even the members of the Reform Party are puzzled by this. It is true. A political donation of $100,000 gets a maximum tax credit of $1,150. A $100,000 donation to a charitable organization gets a far greater tax credit.

Why is that? It is because we encourage grassroots Canadians to donate money to their political parties on a much broader spectrum. Let us get more people donating to political parties and friends in smaller amounts. Let us ensure that people who are generous toward charitable organizations, like the St. Joseph's Hospital Foundation in my riding, are encouraged to give larger amounts so they also get a larger tax credit for doing that. Does that not make sense?

Now the alarm bells go off in my head. Why do we suppose that a party like Reform, which claims to be grassroots—and the Bloc can be lumped into this as well—said from the beginning that they wanted a lot of small donations? They want those $10, $20 and $30 donations from their grassroots supporters.

Now we have a motion from the Reform Party that proposes to make the tax credits for charitable donations as least as generous as political tax credits.

Let us look at that mirror image I spoke of. Now we see that the Reform Party is really after some equality with charitable donations in those bigger amounts of cash coming into its political coffers. Now we get the picture.

This is not talking about “Let us help out those people”. We are only talking about donations of up to $200. That is all they are talking about. That is suspicious.

What is the mirror effect of this? The mirror effect is, if they are looking to have equality and simplify the tax system, they are looking for, dare I say on behalf of the Reform, larger political donations. No, I would not want to say that, but let us have a look at exactly what this is all about.

The Minister of Finance has always been supportive of enhancing tax assistance to the charitable sector. He has always been there for them. Consequently, the assistance given to the charitable sector has been enhanced. I tell that to the hon. member from the Reform Party who has nothing better to do than stand in the House and yell at me. During his speech I was quiet, but he has chosen to be very agitated about this. I understand why.

If I were out there asking the public to increase the amount of money they were going to give to me, and for that they would get a bigger tax break at the end of the day, I would be kind of embarrassed too. I would be yelling at members opposite for pointing that out to my constituents who are watching tonight.

What has the minister done? The Minister of Finance has enhanced and assisted the charitable sector in every budget: in the 1994 budget, in the 1995 budget, right up until this year's budget in 1998. The relationship between government and the private sector in support of charities can be described as a 50:50 partnership, although the level for tax assistance to donations by individuals is generally somewhat larger than 50% for cash donations, again I say above $200.

Quite frankly, I think many taxpaying Canadians out there would say that is very generous support.

My constituents are saying the tax assistance provided through a federal tax credit of 17% on donations up to $200 and 29% on amounts in excess of $200 is generous. They are quite satisfied. The application of the credit reduces basic federal tax, which in turn reduces a donor's provincial tax liabilities.

When we look at the proposal being put forward by the member for Fraser Valley, I say it looks very level headed and it looks as though they really care.

I have heard some terrific speeches in the House tonight during Private Members' Business. Those members are absolutely correct. Those charitable organizations out there doing the good work in our communities are most valued. There is no question of that.

Everything this government can do to help those charitable donors it will do. We are going to give them every assistance that we can possibly give them.

Charitable ContributionsPrivate Members' Business

6:20 p.m.

An hon. member

Make the tax credit the same.

Charitable ContributionsPrivate Members' Business

6:20 p.m.

Liberal

Stan Keyes Liberal Hamilton West, ON

The member opposite from the Reform Party says to make the tax credit the same. He just did not get it, did he?

Unlike the Reform Party, the government on this side of the House is trying to ensure that there is a balance.

Charitable ContributionsPrivate Members' Business

6:20 p.m.

An hon. member

Oh, oh.

Charitable ContributionsPrivate Members' Business

6:20 p.m.

Liberal

Stan Keyes Liberal Hamilton West, ON

He laughs because he does not understand. I can understand that. The Income Tax Act is a very complicated thing and the hon. member opposite is only going to look at this thing on the surface. All he wants to see is a tax credit for everybody, whether it is a political or a charitable donation, et cetera.

I ask members of this House to look a little deeper. Look a little deeper at exactly what this bill proposes and look at the ramifications it would have if it were to be implemented, not at the up to $250, $300 or $500 range that the hon. members opposite are proposing, but at the larger end where the Reform really wants the big money, tax credited, coming into their pockets.

Charitable ContributionsPrivate Members' Business

6:25 p.m.

Reform

Derrek Konrad Reform Prince Albert, SK

Madam Speaker, I would like to make a couple of remarks that will be appropriate for the previous speaker, the member for Hamilton West. He said we will help them. Yet I read in the Globe and Mail of February 6, 1996 that grants and other support from governments have been sharply reduced and sometimes eliminated entirely. We will help them all right. That is some help. That was the Liberal government.

The House of Commons finance committee which tabled its prebudget report last month endorsed the viewpoint that growth in charitable donations is at a virtual standstill and new incentives are needed. The finance committee which is chaired by a Liberal asked that the government consider enhancing the charitable tax credit for donations to charities currently funded by governments to make them as generous as the current political tax credit for small donations to political parties. We see that the Liberals' own committees are against what the previous speaker had to say.

The Liberals are the biggest beneficiaries of the current system, but I can assure members of one thing. In my riding the Liberals will be the big losers under any system as they supported Bill C-68 in the last election.

The question now is who do we want to help in this country, the political system or the charitable system? I have worked with charities. I have worked in government, as now, and I am not entirely convinced that we are doing the good that many of the charities do. One thing is for certain. I hear a lot of complaints about MP paycheques and other perks available to them but I do not hear anyone complaining about what charities get and do. That says a lot to me.

Canadians are voting with their pocketbooks. They are voting to support charities at an extremely high level. Why should charities be subject to discriminatory tax treatment? Should this country not have one law for those who support volunteers?

Three out of fifty-two awards for caring Canadians were made to people from the riding of Prince Albert. That left only 49 for the entire rest of Canada.

The changes requested in the motion would do a lot of good in a constituency like mine which is a rather low income constituency but very generous in giving to support fellow Canadians.

Caring costs money. The government should not be hindering. It should be helping charities to get ahead. I am sure those who make the large donations appreciate the large tax credits on donations. But many Canadians give smaller donations because it is all they have left after the government has finished taxing them out of existence. Many charities, in particular pro-family charities, need help and they are key to Canada's way of life in the 20th century. As we go through redefinitions of family and the family is under attack, those pro-family groups need to have their charitable status.

Charitable ContributionsPrivate Members' Business

6:25 p.m.

The Acting Speaker (Ms. Thibeault)

I am afraid that I must interrupt the hon. member, since it is 6.30 p.m. The hon. member will have approximately six minutes left when this motion is brought back to the House.

The time provided for the consideration of Private Members' Business has now expired and the order is dropped to the bottom of the order of precedence on the order paper.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

Charitable ContributionsAdjournment Proceedings

6:30 p.m.

Reform

Jim Abbott Reform Kootenay—Columbia, BC

Mr. Speaker, the case of Peppergate is becoming more and more complex as we have the solicitor general continuing his cover-up for the Prime Minister by using a body that was never designed for this purpose.

There are many people in Canada who make a very good living at building two or three or four houses a year. They are contractors, very reputable people who build those homes. However, I would never ever use any of those contractors to build a 60 storey skyscraper because they lack experience. They are totally lacking in expertise. They just simply do not have the ability to get the job done.

I make a comparison between the Public Complaints Commission of the RCMP and a small contractor. The purpose of the Public Complaints Commission is clearly set out in section 45.35(1) of the RCMP Act:

Any member of the public having a complaint concerning the conduct, in the performance of any duty or function under this act of any member or other person appointed or employed under the authority of this act, may, whether or not that member of the public is affected by the subject matter of the complaint make a complaint.

This is to get to the bottom of any alleged misdeeds by the RCMP. What we are talking about here very clearly and specifically is alleged misdeeds of the prime minister, of the foreign affairs minister and of this government.

Furthermore, any evidence taken under this act will be taken under section 37(1) of the Canada Evidence Act which reads:

A minister of the crown or other person interested may object to the disclosure of information on the grounds of the specified public interest.

In other words, this board, this commission, is not an inquiry. It is a Public Complaints Commission capable of building houses, not skyscrapers, and truly we have a skyscraper.

To underscore the point that this body does not have the expertise, I am not questioning any of the board members or their integrity. That is not the issue. The issue is their expertise and their ability to get the job done.

I point to the finding of Justice Reed on the matter of whether the board should have called for the funding of the students. In that he came up with two reasons, and I quote:

The board said that the commission's duty of impartiality would be compromised by advocating for a benefit in favour of only one of the parties before it.

That is the complainant. She continues:

Submissions by the commission of the federal government for the funding requested would intrude on the exclusive power of parliament to legislate the entitlement which is sought.

This is not me speaking; this is the judge speaking. She says with respect to the first ground on which the commission based its decision “the conclusion is inaccurate”. Also she says with respect to the assertion that the recommendations would intrude on parliament's executive power to legislate “that is also incorrect”.

This is the key. She says that the commission was operating on misunderstandings of the law. This is the board that is supposed to be looking into whether the foreign affairs minister and the prime minister were indeed involved in this matter.

I suggest—as a matter of fact I charge—that this board is being used as a cover-up for the prime minister and for the misdeeds of he and his foreign minister with respect to APEC.

That is my assertion and I say this on the basis of the fact that the board unfortunately in the judgment of Justice Reed is incompetent.

Charitable ContributionsAdjournment Proceedings

6:30 p.m.

Brossard—La Prairie Québec

Liberal

Jacques Saada LiberalParliamentary Secretary to Solicitor General of Canada

Madam Speaker, I should repeat the mandate of this board, for the benefit of Canadians. It would appear that my colleague across the way has great difficulty grasping it, so I am going to read it word for word from the Royal Canadian Mounted Police Act. I will read from the English text.

The Commission has, in relation to the complaint before it, the powers conferred on a board of inquiry, in relation to the matter before it, by paragraphs 24.1(3)(a), (b) and (c).

What do paragraphs 24.1(3)( a ), ( b ) and ( c ) say? First of all:

—A board of inquiry has, in relation to the matter before it, power

(a) to summon any person before the board and to require that person to give oral or written evidence on oath and to produce such documents and things under that person's control as the board deems requisite to the full investigation and consideration of that matter;

(b) to administer oaths;

(c) to receive and accept on oath or by affidavit such evidence and other information as the board sees fit—

Despite his protestations to the contrary, my colleague across the floor is casting doubt on the very credibility of the organization. The specific purpose of creating this board was for it to hear citizen complaints against the RCMP.

This board was informed of the complaint on the initiative of the students themselves. I find it regrettable that an attempt is being made to use this as a pretext to discredit that body.

Charitable ContributionsAdjournment Proceedings

6:35 p.m.

The Acting Speaker (Ms. Thibeault)

The motion to adjourn the House is now deemed to have been adopted. Accordingly, the House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).

(The House adjourned at 6.36 p.m.)