Madam Speaker, I appreciate being able to speak early on the motion tonight. I understand the parliamentary secretary assisted in that and I am very much appreciative.
The motion is a very important motion that seeks to address a fundamental flaw in the Canadian tax code as we see it currently, the discrepancy between the tax treatment of political contributions and charitable contributions.
As a preface to my remarks, it is very important to recognize the importance of the role charitable organizations play in Canadian society. That role has increased in recent years in part due to both federal and provincial government cutbacks where we have been in a period of fiscal restraint.
The non-profit sector, the volunteer sector, has had to play a larger role in providing some of the basic services. For instance, in areas of health care organizations like the VON have been called on to play a larger role than perhaps they have ever had to play in the past.
I argue that not just the intentions of this motion are very important but that the government should be trying to engage the volunteer sector on almost every area of service delivery to ensure that we identify the needs of Canadians more effectively and also, through the volunteer sector, to can work more effectively in meeting those needs.
There are several facts I would like to provide to the House on this issue. The discrepancies are very clear. The maximum contribution amount eligible for credit with a charity is 50%. For political parties the amount eligible for credit is $1,150. On charitable or non-profit organization contributions it is 17% of the first $200 and 29% on gifts over $200. The largest possible tax credit is limited by 50% of the donor's actual taxable income.
On contributions to political parties it is 75% of the total if the total does not exceed $100; $75 plus 50% of the next $450 is eligible and the lesser of $300 plus one-third of the amount exceeding $550 or $500. Clearly at some levels of contributions there are significant advantages of contributing to a political party as opposed to a charity. My party is not opposed to political contributions. I encourage Canadians who are watching tonight to make contributions.
The issue before us tonight is one that specifically addresses the discrepancy between contributions to charities and the non-profit and volunteer sector and political organizations. In the next century it is argued that in most industrialized countries the volunteer sector will play a larger and larger role in society. Governments will be asked to do some things extraordinarily well and will be asked to do less in some other areas. If we are to provide that level of responsibility to the volunteer sector we have to provide with it some type of commensurate improvement in the tax treatment which would enable citizens to contribute to those worthy areas.
This is not the only area that needs to be addressed in terms of our treatment of charitable contributions. We believe the government should remove the remaining capital gains tax on gifts of publicly traded securities to registered charitable organizations. Our party has taken a strong position on this. We have recommended to the minister that he eliminate this capital gains tax on publicly traded shares.
These publicly traded securities have been a very attractive option in allowing a philanthropist to transfer some of their investment holdings to worthy organizations. The capital gains tax effectively reduces the incentive for these philanthropists to contribute to the causes that are very important to them and that are very important to Canadians. The government appeared to recognize the principle I am speaking of a year ago when it reduced the capital gains tax on contributions of publicly traded securities by 50%.
What we are asking the government to do now is carry that policy to its logical conclusion and completely eliminate that capital gains tax on contributions of publicly traded shares. The cost to the federal treasury of the initiative I am speaking of in forgone revenue would be less than $50 million per year. That strikes me as an eminently reasonable tax expenditure to encourage more Canadians to contribute publicly traded shares and to support many of the non-profit and volunteer sector institutions, including hospitals, universities and other worthy institutions that are very important to the quality of life for Canadians.
This motion addresses one area of tax policy that we would like to see corrected. As I discussed, we have been pushing for the government to eliminate as well the capital gains tax on contributions of publicly traded shares to Canadian charities. These are some of the steps whereby the government could provide a recognition of the importance that Canada's volunteer sector provides to Canadians and the important level of services provided to Canadians by Canada's volunteer sector.
It is very important to recognize the trend of the increasing role that our volunteer sector is asked to play in society. The House would do itself proud to support this motion and to make steps in any way we can to encourage more Canadians to contribute to the volunteer sector which improves the quality of life of Canadians every day.