Mr. Speaker, this proposal would create a refundable tax credit equal to the amount that the individual paid during the year as membership dues to a branch of the Royal Canadian Legion, the Army, Navy and Air Force Veterans in Canada Association, or to a prescribed veterans’ organization.
This proposal would effectively result in the personal income tax system providing full reimbursement for the costs of annual membership dues to veterans’ organizations. This would be unique in the personal income tax system, as all other expenses eligible for tax recognition, such as child care, union and professional dues, medical expenses and tuition fees are provided tax relief through deductions or non-refundable tax credits, none of which provide the level of reimbursement of expenses contemplated under the proposal.
It is difficult to provide an accurate estimate of the cost of the proposal since the tax data do not identify members of veterans’ organizations, which can include veteran and non-veteran members. Based on the current membership of the Royal Canadian Legion and the Army, Navy and the Air Force Veterans in Canada Association and the average annual dues collected by these organizations, the estimated cost of the proposal would be about $15 million per year. However, if all 713,000 veterans in Canada were to fully benefit from claiming $50 in annual membership dues--i.e., the current maximum amount of annual membership dues collected by a branch of the Royal Canadian Legion--the cost of the proposal could be as much as $36 million per year.
Additional factors could significantly increase this cost, and these factors are difficult to estimate. The proposal would apply to any individual who pays membership dues to a veterans’ organization, and as such, significant costs could be incurred if memberships by non-veterans--e.g., family members--were also provided tax recognition. Membership data for 2012 suggest that the majority of memberships to the Royal Canadian Legion are in the “associate” and “affiliate” categories. As well, if veterans’ organizations were to increase their annual membership dues, the cost of the proposal could be higher.