Mr. Speaker, it is my privilege to be able to contribute to the debate. I want to commend my Manitoban colleague, the member for Charleswood—St. James—Assiniboia—Headingley, for taking the initiative to present this private member's bill, Bill C-240.
Also, I would try to convince other Manitoban colleagues who have spoken on this tonight to make it a bit more of a priority than was just indicated by my NDP colleague, because this really does affect every family in Canada and Manitoba. I agree with him about the charitable status of Manitoba being as great as it is.
My colleague was a Winnipeg city councillor and now is a member of Parliament and has always been driven by results. I am extremely proud to call him a friend, not only for that purpose but for others. When he sees a problem, he looks for a solution. As an elected official, that is exactly the right mindset to have. I also want to thank him for his efforts to keep the spotlight on these very important changes to the Income Tax Act and how they will positively impact countless charities.
Charities, both big and small, are woven into our communities. From medical research to the arts to recreation to food banks to museums and heritage to housing to education, these charities are integral to every aspect of society.
We both come from a province that is known for the philanthropic efforts of its residents and businesses. When I look around my constituency, multiple buildings at the university, the Assiniboine Community College, the recreation centres and many others were built with the help of private donors. Entrepreneurs, businesses and individuals rose to the occasion to support their communities. Of their own free will they decided to donate to the causes nearest to their hearts. They decided to give back to the community that helped them prosper.
The essence of this bill is very simple, but its impacts are enormous. It will result in more money ending up in the hands of charities. By eliminating the capital gains tax on charitable donations of private company shares and real estate, it will result in millions more dollars going directly to charities, rather than as taxes to the government. From the donor’s perspective nothing will change. The same shares are being sold. The only difference is the level of tax the government would collect. From the charity’s perspective, it will now receive the total sum of the private shares being sold.
We are cognizant that the pandemic has been hard on charities. We know donations are down and demand for charities has gone up. According to the latest available data, donations declined by 10% due to the pandemic, and close to half of all charities are struggling. These are troubling statistics.
As members of Parliament, the onus is on us to propose solutions from all sides of the House. I believe Bill C-240 is a responsible and appropriate response to the challenge that charities are currently facing. It is projected to result in roughly $200 million being directly given to charities from across the country on an annual basis. As a Conservative, I am always keen on advancing ideas that are market-driven and sustainable over the long term.
This legislation does not expand the size of government, nor does it burden charities or individuals with more red tape. It does not reward one charity over another. It does not pick winners or losers. It simply unlocks and leverages the private sector’s philanthropic spirit. This legislation will help our charities prepare for the future. As we have seen in the last two years, a little help can go a long way. Of course, we are presently seeing that with the situation in Ukraine.
That is a win-win and that is exactly why I am supporting this legislation. As parliamentarians, we must advocate for policies that harness ingenuity. We can give people the tools and incentives to help bind communities together. We can make our communities and charities stronger and more resilient. We can empower individuals by letting them take the reins of their generosity and philanthropic efforts. It is about celebrating the value of local communities and charities, and it is a recognition that those at the grassroots level have the capacity to respond almost immediately to the needs and causes they feel passionate about.
It is in that spirit that Bill C-240 delivers in spades, and it respects the decisions made by donors themselves to support the charity of their choice. Not only am I confident of the aims of the bill, but we also have ample evidence to suggest it will accomplish its intended goal. It builds on the success of the removal of the capital gains tax on gifts on limited securities, which was introduced in 2006, as my colleague mentioned earlier. Since that common-sense change, charities have received donations of listed securities of over $1 million every year, and that is for 16 years. It is a tremendous amount of money that is helping do the good work that charities do. It is time to make the Income Tax Act equitable and apply those previous changes to the sale of private shares.
There is no logical argument to oppose the bill, although we have certainly heard from those in government who fear the loss of tax revenue and people using tax loopholes, and have heard that again today from some of my colleagues across the way. These were the same arguments made by the finance officials for my private member's bill last summer, and when presented the evidence at committee, I was pleased to see numerous Liberal MPs vote for the legislation at third reading. I hope they will consider that in this particular bill as well.
I believe if my Liberal colleagues carefully scrutinize the legislation for themselves, they will quickly determine that it was drafted with those concerns in mind. There are safeguards built into this legislation as well, such as the requirement of having to sell the shares to someone at arm's length. Also, the sale of those shares must be at fair market value. These are sensible clauses built into the bill to ensure that the actual disposition of the shares occurs. Moreover, this ensures that shares are not sold at an inflated price to exaggerate the charitable donation tax credit.
My colleague from Charleswood—St. James—Assiniboia—Headingley deserves credit for how well thought out this legislation was designed. As he stated in his speech, though, we all owe Donald Johnson a tremendous round of applause for his passionate advocacy over the years. He has spearheaded these legislative changes for as long as I can remember. Like clockwork, every year members of Parliament would get his budget submission on the proposed changes contained in this bill. Mr. Johnson has been tireless in his efforts to get these important changes to the Income Tax Act, and I am thrilled we are speaking about them here today. I want to quote Mr. Johnson, who wrote a column published in the Toronto Star. He said:
Charities across Canada have been recommending that the government unlock more private wealth for public good. The best way to do that is by removing the capital gains tax on gifts of private company shares and real estate which, it has been estimated, will increase charitable donations by $200 million each year.
That would do a lot of good in Canada, particularly at this moment.
In closing, I want to urge my colleagues and other parties to support this legislation. Let us pass the bill, send it to committee and bring in the charities and tax experts. I also recommend that my colleagues reach out to the charities in their constituencies and ask if they support Bill C-240. Call the volunteers and organizers and ask them if they believe the aims of this legislation will result in further dollars being donated to charities. I know that if my colleagues do, they will find universal support for the bill.
I want to congratulate my colleague from Charleswood—St. James—Assiniboia—Headingley once again for bringing this important bill forward. I am honoured to call him a friend, and he is an integral member of our Manitoba caucus. I am proud to second the bill and speak in favour of it. I pledge to do all that I can to see it pass.