Mr. Speaker, I am very pleased to rise in the House today, not only because I want to congratulate my colleague from Provencher on his bill, but also because he spoke about the benefits and positives of his bill, as well as the more negative aspects of the bill. This is worthy of being discussed in the House. It is good that we have already had a conversation about this bill and that we can debate it, because everyone here agrees that charities do important and extraordinary work across Canada. Every day, in each one of our ridings, we can see the good work that these charities accomplish for their communities.
I thank my colleague for his initiative, since Bill C-239 is an important measure. It is important to examine this bill carefully before voting, since it can affect many things, including costs, for example. This bill could result in some costs to the public treasury, a topic that has come up today. We are talking about a major change to charitable donations and the associated tax credits.
My colleague compared these donations to donations to political parties. I have a hard time using that comparison, since there is a maximum annual amount one can donate to a political party and claim a tax credit. We need to take a close look at this cost. The tax credit for donations to political parties is 75% for the first $400, 50% for donations between $400 and $750, and 33.33% for donations above $750. This comparison can be made, but it is important to note that charitable donations are capped at 75% of net income.
Donations of $750 or more will represent a tax credit of 33.33%, up from the current 29%. It is therefore important to take into account that higher-value donations made in Canada, that is, those worth more than $750, will result in a tax credit worth 4.3% more. This tax credit will go into the pockets of the wealthiest people. I think we can all agree that those who donate more than $750 a year tend to be wealthy, since they have the means to do so. As parliamentarians, it is important for us to examine this situation, specifically the fact that part of these tax credits will go into the pockets of the wealthiest Canadians. It is fair to say that donations of $400 or less represent the vast majority of donations made in this country, and they generate a tax credit of 75%. I think it is also fair to say that most donations made by Canadians are under $400.
It is therefore important to look at the cost of this measure. That shows the importance of the decision we have to make when voting on this bill. Whenever bills are introduced, it is important to always consider the costs involved. A Library of Parliament study estimated that this kind of change to the tax credits would cost between $1.3 billion and $3 billion.
In this debate, it is also important to try to determine whether there really is a link between enhanced tax credits and an increase in donations. To date, no direct causal link has been established or quantified in terms of the value of tax credits and the quantity or value of donations that might be made if tax credits are enhanced. It remains to be seen whether this measure will have the desired effect. The outcome my colleague from Provencher is hoping for is clearly an increase in charitable donations. Of course, we encourage our fellow Canadians to give more and to support the charities in our ridings.
However, it is not yet clear to me that enhancing the tax credit would produce the desired effect. That is probably for the parliamentary committee to figure out with the help of subject matter experts. They will be able to examine situations in other jurisdictions where changes to tax credits may have had a significant impact.
In this study and in our debate, we must also look at other ways to help charities in Canada. Sure, tax credits count for something, but there are many other ways to help Canadian charities.
Part of the bill's preamble gives us pause, unfortunately. It reflects the sponsor's attitude, in a way. I would like to read from the preamble:
Whereas Canadian charities, both secular and faith-based, deliver critical social support for our communities and are well-equipped to remove some of the burden [I would emphasize “remove some of the burden”] placed on government social services;
I found that part of the preamble interesting. It reveals the sponsor's mindset, which I believe is wrong. It is not okay to say that the government should off-load government services and expect charities to pick up the slack. The government's main mandate is to provide high-quality, accessible, affordable services to all Canadians. In today's debate, we need to focus our attention on this notion of transferring the burden of government services to charities. We do not necessarily want a government that off-loads its responsibilities, strives to provide fewer and fewer services, and tries to wash its hands of certain things in our society.
Again, I wanted to talk about the fact that there is currently a limit to charitable donations of 75% of net income and that limit represents non-refundable tax credits. However, people who have the means could use this as a form of tax avoidance. We have seen that happen. In this debate, it is important to point out that people can use tax credits for charitable donations. There is no denying that the money goes to a charitable organization, but nor can we deny that some Canadian taxpayers might be tempted to use this enhanced tax credit for donations greater than $750 to their advantage. The tax credit for donations greater than $750 increases by 4.3%, and some people might try to use this credit to avoid paying their fair share of taxes.
I must say that the NDP has always defended tax fairness in Canada, where everyone pays his or her fair share and we can have a tax environment with a semblance of fairness. That is important. Given the revelations that we are seeing a growing number of taxpayers try to dodge their tax obligations, it is important for us to also have a debate on tax fairness in Canada. In fact, the government announced that it wanted to review tax expenditures. It is also important to have this debate on all tax credits available in Canada, which are a burden on the treasury. It is important to have a thorough review of our fiscal framework to ensure that it is fair and that people with the most means pay their share so that important government services can be delivered to the entire population.
This does not have to stop charitable organizations from doing good in their community. Let us not confuse the two.
I want to commend my colleague on his initiative. I look forward to discussing it at length.