Mr. Speaker, as I rise today to speak to Bill C-458, the national charities week act, I want to refer to what my colleague from Bonavista—Gander—Grand Falls—Windsor noted during the first hour of the debate. As he stated in his remarks in this House, the Liberal Party of Canada will be supporting the bill.
We are all proud of the outstanding work done by Canada's charities.
However, I would like to reiterate the two main concerns my colleague previously raised. As the House heard, Bill C-458 would amend the Income Tax Act by allowing taxpayers to deduct donations made within 60 days of the end of the taxation year from that year's taxable income.
During the study by the Standing Committee on Finance of tax incentives for charitable donations, Adam Aptowitzer noted that there is no economic modelling on the issue of tax deadlines, which means that while there is no modelling to support keeping the current deadline, there is also none to encourage moving it to the end of February.
Before making this change, Parliament needs to know all of the facts.
First, we need to hear from stakeholders about the impact these changes would have on fundraising strategies. The current tax deadline coincides with December holidays, which are the basis of major fundraising campaigns for many Canadian charities.
It costs money to raise money. We should be asking if it makes sense to encourage another series of campaigns at the end of February, a time more associated with paying down debt and making RRSP contributions than charitable giving. We need to hear the broader not-for-profit sector's views on whether this would be a useful or productive change.
Second, my colleague from Bonavista—Gander—Grand Falls—Windsor, that extraordinary, exceptional member of Parliament, rightly pointed out that we have no estimate of the impact Bill C-458 might have on federal revenues. Donation tax credits for individuals cost the treasury about $2.4 billion per year. If more Canadians claim donor tax credits, these costs will grow. Of course, we would hope that the increase would be offset by an attendant increase in charitable donations, but again, we have not seen the data on this point.
That is why Bill C-458 needs to be studied in more detail in committee.
To give a reasonable and responsible verdict on this legislation, parliamentarians need to know the costs involved, and they need to know the potential positive impact on increased charitable giving.
It is a timely moment to talk about the state of charitable giving in Canada. As the finance committee's recent report showed, government funding to the charitable sector has declined, and charities rely increasingly on private donations. While Canadians give time and money generously, the number of Canadians claiming the charitable donation tax credit has been stable since 1990, while the number of individual taxpayers has grown by over seven million.
We need to ask ourselves what we can do to help charities expand and strengthen their donor base.
The Liberal Party is encouraging the government to take meaningful action to promote the charitable sector. We believe that two measures in particular would have a definite impact.
First, we urge the government to establish a stretch tax credit for charitable donations. Second, we recommend extending the capital gains tax exemption to include gifts of private company shares and real estate.
A stretch tax credit rewards donors who increase the amount they give to charity by stretching the tax credit on the difference.
In their brief to the finance committee on this subject, Imagine Canada outlined the benefits. They said that a stretch tax credit would “challenge more Canadians to give and to give more”.
Another goal is to “strengthen and revitalize the donor base for many years to come”.
They said it would “benefit the broadest number of taxpayers; support the broadest number of charities and communities”.
Finally, the measures should “entail minimal impact on the federal Treasury in proportion to the benefits gained”.
This is an innovative reform with support from Canadians as well as many Canadian charities.
On the subject of reform, many in this House would know Donald Johnson as one of Canada's leading philanthropists and a tireless advocate of tax reform in the charitable sector. D.K. Johnson has worked for well over a decade advancing the cause of the charitable sector in Canada. In 2011, he told the finance committee that there was a strong case to be made for eliminating the capital gains tax on gifts of private company shares and real estate.
The economy remains weak. Charities need more resources, because more people need help, and since those resources would need to come from private donations, the government ought to do everything it can to encourage giving. According to D.K. Johnson's testimony, this tax change would cost the treasury between $50 million and $65 million but would result in $200 million in new donations. That is the sort of dramatic result Canadian charities need and could benefit from.
The finance committee's report recommended that the government “explore the feasibility and cost of adopting a stretch tax credit” and of cutting the capital gains tax on donations of certain assets. These measures ought to be prioritized by the government.
Canada's charities deserve real support, because they make a real difference in people's lives. I would like to highlight a couple of examples from my riding. The Mermaid Theatre in Windsor, Nova Scotia does incredible work with young people and for young people. Their youth theatre project, which has been running for more than 20 years, gives teenagers a chance to explore tough questions and create innovative theatre, building confidence and performance skills.
Another great example is Camp Brigadoon on Aylesford Lake in my riding, which is a place for children with chronic illnesses, conditions and special needs. These kids face tremendous challenges, but with the help of staff and volunteers, they make friends and explore beautiful Lake Aylesford and the Annapolis Valley. They have fun. They get to enjoy the fun and the opportunity to go to a summer camp that children who are not burdened by chronic health issues often take for granted. For many of these children and their families, summer camp was something that was simply inaccessible for a child with a chronic illness. Camp Brigadoon is an example of the kind of non-profit organization that makes a real difference in people's lives.
Another example is the Alzheimer Society. The work the Alzheimer Society does is really important to families like mine. My mother has Alzheimer's. I know the work the Alzheimer Society does.
There is the Dalhousie Medical Research Foundation and the incredible work they are doing on brain health and on issues of dementia and Alzheimer's. Tax changes for charitable giving would help attract more money to the Dalhousie Medical Research Foundation and help potentially find a cure in the future for some of these brain health issues. In the interim, it could help people and their families living with these brain health issues deal with the issues and have a higher quality of life.
These are examples of the invaluable work that exemplifies the dedication and generosity of Canadian charities, the important work they are doing and the difference they are making in communities and for Canadian families. We are all proud of Canada's charities. We want to see them grow and prosper.
My Liberal colleagues will be supporting this bill.
That said, there are far more concrete steps this House can and ought to take to foster the long-term sustainability of Canada's donor base. I encourage the government to give them serious attention.
