44th Parl. 1st Sess.
March 22, 2022 10:00AM
- Mar/22/22 5:21:10 p.m.
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Madam Speaker, one of the issues within the motion that I am sure Bloc members are concerned about is that the Conservatives' proposal could be perceived as something that would take away from provincial jurisdiction regarding the tax on gas in the province of Quebec.
Could the member add some further comment? The member made some reference to it, and I would be very much interested in how she perceives the motion from that perspective.
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- Mar/22/22 5:21:52 p.m.
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Madam Speaker, I thank my colleague from Winnipeg North for his question. He is absolutely right.
I did not mention it in my speech, but some of my colleagues did. It is so obvious that the QST belongs to Quebec. No federal legislation will override our QST legislation. It is as clear as that.
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- Mar/22/22 5:22:21 p.m.
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Madam Speaker, I thank my colleague for her speech.
I would like to hear what my colleague has to say about the environmental impact that future lithium mines will have. These mines will be found worldwide with the advent of electric vehicles.
Could she also tell me about the environmental impact that waste from these batteries will unfortunately cause and that will linger for the next 500 years?
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- Mar/22/22 5:22:55 p.m.
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Madam Speaker, I thank my colleague for his question.
My colleague does not have the good fortune to sit on the excellent House Standing Committee on Environment and Sustainable Development. Last year, I put forward a motion to develop a federal zero-emissions law. From the testimony we heard, we learned that there is a company in Montreal that recycles batteries from electric cars for the purpose of putting them back into new electric cars.
The electrification of transportation is moving forward at breakneck speed. Week by week, things are changing and discoveries are being made. At the University of Sherbrooke, they are working on electrolyte batteries that would increase the distance travelled and reduce charging time. There is a lot of research and development going on in this area; it is a beautiful thing. We talk about it sometimes in committee.
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- Mar/22/22 5:24:06 p.m.
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Madam Speaker, I want to thank my hon. colleague from the Bloc for what I believe to be a remarkable speech. We have really hit, in many ways, the crux of the issue facing Canadians today, which is the fact that we are not spending enough on those who need that support. We are not even making sure that those who are profiteering are paying their fair share, and the member highlighted that there is a relationship between these two things. Those who profit and those who exceedingly use that profit to do less justice for our tax system are actually depriving those who need it most, including seniors. I was touched by the fact that the member encouraged support in the House for seniors, for example to increase OAS, which is something that constituents in my community have been calling for for decades.
I would ask the member to expand for a few moments on how valuable expanding OAS is for ensuring that seniors have the dignity and security they need while moving into this crisis.
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- Mar/22/22 5:25:06 p.m.
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Madam Speaker, I thank my colleague for his question.
Yes, we could help seniors directly by increasing the guaranteed income supplement and old age security.
I will make a connection with food, which is a very important issue to talk about. It is often said that seniors living alone do not eat properly and sometimes have to choose between food and medication because inflation is too high. I always put that in the context of the environment. Consider the droughts in western Canada and the wildfires that have caused crop failures and increased the price of food for everyone, including seniors. The consequences of the climate crisis ultimately are that we are paying more and inflation is rising. Fighting climate change involves dealing with everything that is very human, particularly people's health.
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- Mar/22/22 5:26:19 p.m.
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Madam Speaker, all afternoon, we have heard the various points of view on the motion, which basically aims to help the most disadvantaged.
However, I would like my colleague to provide more details about means other than oil that could be used to help the most disadvantaged.
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- Mar/22/22 5:26:37 p.m.
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Madam Speaker, my colleague spoke at length just now about social and community housing.
I would like to share a very personal story. My son, who is 30 years old, does not have a car, so he does not have to pay at the pump, but he does live in an apartment. He has a hard time making ends meet, and sometimes mom and dad have to help him little.
If we had more social housing and community housing, we could help young people like him. Lots of people do not have cars. It does not always have to be about oil, oil—
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- Mar/22/22 5:27:13 p.m.
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Unfortunately, I have to interrupt the member.
It being 5:27 p.m., it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the business of supply.
The question is on the motion.
If a member of a recognized party present in the House wishes to request a recorded division or that the motion be adopted on division, I would invite them to rise and indicate it to the Chair.
An hon. member: Madam Speaker, we request a recorded division.
The Assistant Deputy Speaker (Mrs. Alexandra Mendès): Pursuant to order made on Thursday, November 25, 2021, the recorded division stands deferred until Wednesday, March 23, at the expiry of the time provided for Oral Questions.
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Madam Speaker, I have two points of order that I would like to address.
I am rising on this particular point of order in response to the Speaker's statement on February 28, 2022, respecting the need for a royal recommendation for Bill C-237, an act to amend the Federal-Provincial Fiscal Arrangements Act and the Canada Health Act, sponsored by the member for Bécancour—Nicolet—Saurel.
Without commenting on the merits of Bill C-237, I note that the bill would exempt Quebec from the national criteria and conditions set out for the Canada health transfer. Section 24 of the Federal-Provincial Fiscal Arrangements Act sets out certain conditions and criteria for payments to provinces for health transfers:
a Canada Health Transfer in the amounts referred to in subsection 24.1(1) is to be provided to the provinces for the purposes of
(a) maintaining the national criteria and conditions in the Canada Health Act, including those respecting public administration, comprehensiveness, universality, portability and accessibility, and the provisions relating to extra-billing and user charges.
Bill C-237 also seeks to amend the Canada Health Act to make a corresponding change to exempt Quebec from abiding by the criteria and conditions for a cash contribution from the government to the provinces for the purposes of providing health care services. The purpose of the Canada Health Act is to set out in section 4 of the act:
The purpose of this Act is to establish criteria and conditions in respect of insured health services and extended health care services provided under provincial law that must be met before a full cash contribution may be made.
Section 5 of the Canada Health Act provides for cash contributions for each province in relation to the Canada health transfer.
Section 7 of the Canada Health Act sets out the criteria that a province must satisfy in order to receive a cash contribution. These criteria are more fully articulated in sections 8 to 12 in the act. Section 7 states:
In order that a province may qualify for a full cash contribution referred to in section 5 for a fiscal year, the health care insurance plan of the province must, throughout the fiscal year, satisfy the criteria described in sections 8 to 12 respecting the following matters:
(a) public administration;
(b) comprehensiveness;
(c) universality;
(d) portability; and
(e) accessibility.
As House of Commons Procedure and Practice, third edition, states at page 772:
Since an amendment may not infringe upon the financial initiative of the Crown, it is inadmissible if it imposes a charge on the public treasury, or if it extends the objects or purposes or relaxes the conditions and qualifications specified in the royal recommendation.
The provision of full cash contributions from the federal government to the provinces for health care services is tied to the ability of provinces to satisfy the conditions set out in section 7 of the Canada Health Act and section 24 of the Federal-Provincial Fiscal Arrangements Act. The royal recommendation includes the maximum charge on the consolidated revenue fund and is tied to the purposes, terms, conditions and qualifications for the authorization of expenditures.
Since Bill C-237 seeks to remove the terms, conditions and qualifications of the statutory spending authority, I submit that a new royal recommendation would need to be obtained for the purposes set out for health transfers to provinces envisaged in Bill C-237.
Speakers have consistently ruled that bills seeking to impose a new charge on the consolidated revenue fund, change the qualifications or alter the terms and conditions need to be accompanied by a royal recommendation.
On December 6, 2016, Speaker Regan noted:
On May 8, 2008, Speaker Milliken delivered a ruling on Bill C-490, an act to amend the Old Age Security Act (application for supplement, retroactive payments and other amendments). While the bill clearly provided for increases in supplements, it also made changes in the manner in which people applied for benefits and the extent to which qualified persons could claim benefits retroactively. In Speaker Milliken’s view, this:
...would alter the conditions and qualifications that were originally placed on public spending on old age security payments when those benefits were approved by Parliament.
On December 6, 2016, the Speaker ruled on the need for a royal recommendation for Bill C-243, an act respecting the development of a national maternity assistance program strategy and amending the Employment Insurance Act, maternity benefits. The Speaker stated:
In this case, Bill C-243 does not impose any new charge on the public treasury but creates a new set of conditions, relating to the safety of their workplace for their pregnancy, under which pregnant women could have access to benefits related to their pregnancy from as early as 15 weeks before the birth of their child. Though the sponsor of the bill argues otherwise, the Chair is not convinced that the current act allows spending under the circumstances, in the manner, and for the purposes he proposes. This being a circumstance not yet envisioned in the Employment Insurance Act, it infringes on the terms and conditions of the initial royal recommendation that accompanied that act and therefore requires now a new royal recommendation. This remains the case, even if the total amount of benefits stays the same.
Consequently, the Chair will decline to put the question on third reading of the bill in its present form unless a royal recommendation is received.
A royal recommendation may only be obtained by a minister of the Crown on the advice of the Governor General. In the absence of a royal recommendation, Bill C-237 may proceed through the legislative process in the House up until the end of the debate at third reading. In cases in which the Speaker has ruled that a royal recommendation is required and it has not been provided before the third-reading vote, the Speaker refuses to put the question at third reading and orders the bill discharged from the Order Paper.
I submit that this is the case before you, Mr. Speaker, with respect to Bill C-237.
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Mr. Speaker, I am rising on this particular point of order in response to your February 28, 2022, statement respecting the need for a royal recommendation for Bill C-215, an act to amend the Employment Insurance Act, illness, injury or quarantine, sponsored by the member for Lévis—Lotbinière.
Without commenting on the merits of the bill, I suggest that the provision in the bill to extend sickness benefits to 52 weeks would seek to authorize a new and distinct charge on the consolidated revenue fund not authorized in statute. In instances when there is no existing statutory authority or an appropriation to cover the new and distinct charge, a royal recommendation is in fact required.
The provisions of the bill amending the Employment Insurance Act would increase the maximum number of weeks for employment insurance sickness benefits. This increase in the number of weeks of benefits is authorized, once passed, by royal recommendation attached to the bill. The royal recommendation not only fixes the maximum charge on the consolidated revenue fund, but also the objects, purposes, conditions and qualifications of provisions subject to the royal recommendation.
Speakers have consistently ruled that bills seeking to increase the length of a benefit, change the qualifications or alter the conditions for employment insurance benefits need to be accompanied by a royal recommendation.
Let me draw to the attention of members a few germane rulings on this matter.
On April 22, 2009, the Speaker ruled on Bill C-241, an Act to amend the Employment Insurance Act, removal of waiting period. The Speaker stated:
[T]he chair is of the opinion that the provisions of Bill C-241 would authorize a new and distinct charge on the public treasury. Since such spending is not covered by the terms of any existing appropriation, I will therefore decline to put the question on third reading of this bill in its present form...
On June 3, 2009, the Speaker ruled on Bill C-280, an Act to amend the Employment Insurance Act, qualification for and entitlement to benefits. In the ruling, the Deputy Speaker stated:
On March 23, 2007, in a ruling on Bill C-265... the Chair had concluded that:
“It is abundantly clear to the Chair that such changes to the employment insurance program... would have the effect of authorizing increased expenditures from the Consolidated Revenue Fund in a manner and for purposes not currently authorized.
Therefore, it appears to the Chair that those provisions of the bill which relate to increasing Employment Insurance benefits and easing the qualifications required to obtain them would require a royal recommendation.”
Having heard no new compelling argument to reach a conclusion that is different than the one concerning Bill C-265, I will decline to put the question on third reading of Bill C-280 in its present form unless a royal recommendation is received.
A more recent and directly relevant case is to be found in the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities' consideration of Bill C-24, an Act to amend the Employment Insurance Act, additional regular benefits, the Canada Recovery Benefits Act, restriction on eligibility, and another Act in response to COVID-19 on March 11, 2021. This bill sought, among other things, to increase the number of weeks of EI regular benefits available by up to 24 weeks to a maximum of 50 weeks for claims that were made between September 27, 2020, and September 25, 2021.
During the clause-by-clause consideration of the bill, the member for Elmwood—Transcona proposed an amendment that attempted to increase the number of weeks of payments to an employment insurance claimant in the case of prescribed illness, injury, or quarantine from 15 to 50 weeks, therefore allowing people to have access to these payments for longer than they can currently under the Employment Insurance Act.
In proposing the amendment, the chair of the committee ruled the amendment as inadmissible because it required a royal recommendation. The chair ruled:
Bill C-24 seeks to amend the Employment Insurance Act by increasing the number of weeks paid under part 1 of that act under certain circumstances.
This amendment attempts to increase the number of weeks of payments to a claimant, in the case of prescribed illness, injury or quarantine, from 15 to 50 weeks, therefore allowing people to have access to these payments for longer than they can currently under the Employment Insurance Act.
As House of Commons Procedure and Practice, third edition, states at page 772:
“Since an amendment may not infringe upon the financial initiative of the Crown, it is inadmissible if it imposes a charge on the public treasury, or if it extends the objects or purposes or relaxes the conditions and qualifications specified in the royal recommendation.”
In the opinion of the chair, the amendment as proposed requires a royal recommendation since it imposes a new charge on the public treasury, and I therefore rule the amendment inadmissible.
A royal recommendation may only be obtained by a minister of the Crown on the advice of the Governor General. In the absence of a royal recommendation, Bill C-215 may proceed through the legislative process in the House up until the end of the debate at third reading. In cases in which the Speaker has ruled that the royal recommendation is required, and it has not been provided before the third reading vote, the Speaker refuses to put the question at third reading and orders the bill discharged from the Order Paper.
I submit that this is the case before you with respect to Bill C-215.
Precedents clearly suggest that a bill or motion that seeks to incur new and distinct expenditures from the consolidated revenue fund in a manner and for purposes not currently authorized require a royal recommendation.
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- Mar/22/22 5:43:01 p.m.
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I thank the member for his intervention. I will take that under advisement.
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Mr. Speaker, I rise today in support of my private member's bill, Bill C-240, the supporting Canadian charities act. The pandemic has inflicted tremendous losses on charities and their ability to provide much-needed services to Canadians. The situation is bleak. Canada's 170,000 registered charities have lost $10 billion during the pandemic at a time when the help provided by the charitable sector is needed more than ever. More than four in 10 charities are still facing declines in revenue. The average revenue decline is 44%, and more than half are dealing with revenue declines of more than 40%. Some 42% of charities are facing demands for their programs and services that currently exceed their capacity to deliver.
Arts and cultural organizations have been particularly hard hit, with an average revenue decline of 59%. Many charity workers are suffering from pandemic-related stress and mental health issues. Sadly, many of these amazing organizations may not survive.
Charities employ more than 2.4 million Canadians and account for 8.4% of this country's GDP. Under normal circumstances, each year charities raise $18.5 billion in donations and contribute $169 billion to our GDP. The charitable sector fills the gaps that cannot be fully met by government or by the market and is a key partner in the delivery of services including health care, education and social services. Sadly, nearly 40% of charities have laid off paid staff or reduced staff working hours, seriously impacting the ability of the sector to provide important services.
One study by Imagine Canada forecast a loss of private sector donations of between $4.2 billion and $6.3 billion, with estimates of between 117,000 and 195,000 job losses. When charities are unable to deliver services and programs, it means that individuals do not receive the support they need. That is the bottom line. This could be a person looking for a meal at Agape Table in Winnipeg, a child with a disability in need of special equipment or specialized therapy, someone who is homeless and looking for a place to sleep on a cold winter night, a single mother who cannot pay rent or feed her children, a senior not taking life-saving medications, or a person in so many other situations.
Demand for such services is expected to continue to increase in the coming months beyond the ability of charities to service that demand. Arts, cultural and recreational organizations have also reported revenue decreases of as much as 71%. For health organizations, the decline averages 48%.
Bill C-240 would deliver long-term, sustainable funding to the charitable sector. Although the government has played an important role in direct funding of charities, with a simple change to the Income Tax Act, hundreds of millions of dollars in new donations could be raised for charities every year.
Simply put, Bill C-240 would amend the Income Tax Act to waive the capital gains tax on the proceeds from the arm's-length sale of privately owned shares or real estate when those proceeds are donated directly to a charity. The last time the government made such a bold decision was in 2006, with the removal of the capital gains tax on gifts of publicly traded securities. This has resulted in additional charitable donations of over $1 billion ever since. Tax incentives also already exist to encourage the donation of ecologically sensitive lands. This bill is the next step.
The example I like to use is of a retiring dentist who is selling his or her practice after many years and may now choose to donate all or a portion of the sale proceeds to a charity. That dentist would receive a waiver of the capital gains tax so long as the donation was made within 30 days of the sale. The value of the shares is established by an actual arm's-length sale in the marketplace. By using that practice, we avoid the valuation ambiguity of an independent evaluation or appraisal. For years, charities across Canada have been recommending that the government unlock more private wealth for public good. The bill provides us all with the opportunity to help charities by stimulating increased charitable donations from the private sector.
This bill would highly incentivize charitable giving at a time when it is most needed. It essentially incentivizes the redistribution of wealth to those who need it most. I submit that there is no better time to do this than now. It is estimated that this one change will increase charitable donations by at least $200 million per year. These additional donations would cost the treasury the capital gains tax revenue of roughly 25¢ on the dollar, which is roughly $50 million to $60 million per year.
One-time-funding programs like the community services recovery fund and emergency community support fund are important, but represent only a fraction of the charitable sector's needs at this time. The opportunity is now to deliver immediate relief to help Canadians without significant additional costs to a treasury that is already running historic deficits. Existing jobs would be saved. New, permanent jobs would be created, and urgently needed benefits would be delivered.
This is not a partisan debate. We all want to help charities. Charities from across the country have endorsed this bill. This broad support includes local organizations, such as the Grace Hospital Foundation in my own riding in Winnipeg, and extends to some of the largest national charitable organizations. This includes the Special Olympics, Imagine Canada, the Heart and Stroke Foundation, Diabetes Canada and many others.
All stakeholders in the charitable sector are supportive of this measure, as are the hundreds of thousands of small business owners who would like to give back to their communities. A full list of the supportive groups and why they support this bill is available on my website.
Removing the capital gains tax on gifts of private company shares and real estate is much more tax effective than direct government spending for charities because the cost is not borne by taxpayers alone. Rather, it is shared by the taxpayers and donors. Not one penny of the donated proceeds would benefit the donor, but would provide major benefit to recipient charities and those they serve. This initiative actually removes a barrier to charitable giving while immediately reducing the donor's wealth for the betterment of their communities.
The real beneficiaries are the people who are served by not-for-profit organizations, including hospitals, social service agencies, universities, and arts, culture and religious organizations. This measure was also recommendation 34 in the report of the Special Senate Committee on the Charitable Sector issued in June of 2019, which states, “That the Government of Canada...implement and evaluate a pilot project on the impact on the charitable sector of exempting donations of private shares from capital gains tax.”
I want to put on record that laws, as they relate to the charitable sector, are in serious need of modernization. The Senate report also made recommendations for the creation of a secretariat on the charitable sector. This home-in-government approach would provide a stronger framework for discussions and solutions between government and the sector on a wide range of issues.
In the 1997 budget, then finance minister Paul Martin cut the capital gains tax on gifts of publicly traded securities by 50% when donated to a charity. In 2006, then finance minister Jim Flaherty followed suit when he removed the remaining capital gains tax on such gifts. The Senate report quotes Ruth MacKenzie of the Canadian Association of Gift Planners noting, “that the elimination of capital gains tax on gifts of listed securities has been ‘enormously successful, resulting in billions of dollars in shares being donated to charities every year.’”
It is now time for the government to take the next logical step by exempting private shares and real estate. This idea was, in fact, included in the Conservative budget of 2015 by then finance minister Joe Oliver, but it never made it into law before the change in government.
I would be remiss in not giving a shout-out to a very special person many members are familiar with, Mr. Don Johnson who has advocated for this measure for decades. Mr. Johnson has said implementing this exemption would be the single most important and tax effective measure the government could introduce to significantly increase charitable donations every year going forward. Mr. Johnson was directly involved when Paul Martin reduced the tax and when Jim Flaherty reduced the tax, and now he has been advocating for this change all along as well.
Many members recently received a copy of his book, Lessons Learned on Bay Street. He sent a personalized copy to every single one of us. I am about halfway through it, and I can tell members it is an excellent and very interesting read. He is a fellow Manitoban and a recipient of the Order of Canada.
Mr. Johnson made his career on Bay Street and successfully advocated for the current application of this law on publicly traded securities, which resulted in billions of dollars for charities and non-profits. Today, I stand on his shoulders. He has been a tremendous resource for me, and I cannot thank him enough.
The bottom line is that when charities are hurting, real people are hurting. Let us do something about it. I ask every member to support this bill. Working together, we can get the charitable sector back on its feet and Canadians back on theirs.
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Mr. Speaker, I want to congratulate the member on the introduction of his private member's bill. It is always a great opportunity for members to bring forward policy ideas that they are individually extremely passionate about, and I am glad to see that this member has had that opportunity.
I wanted to address one thing that I heard the member say in his speech. If I heard him correctly, and I may have gotten it wrong and he can correct me if I did, he said that the cost of this would be approximately $50 million. My understanding from the PBO is that it would be over $750 million with the possibility of getting close to $1 billion. That is my understanding of what the PBO had reported on it.
Can the member either tell me that I misheard him or tell me what I and the PBO might be missing?
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Mr. Speaker, I would like to thank my hon. colleague for the question.
I said the $50 million to $60 million was the capital gains tax cost. To the extent that there are incremental donations, let us say it is $200 million a year, there would also be tax receipts associated with that. That analysis was done by the PBO as well, and I think it is in the range of another $50 million or $60 million a year. It is something like that, to the extent that there are incremental donations triggered by the incentivization of giving by the relief of the capital gains tax.
The PBO numbers are over a period of time. The annualized cost is roughly $120 million or $130 million, and if we take that over a five-year horizon, that is how we get to the $700 million to $800 million cost. I would point out that the tax cost in all cases, on an annualized basis or over five years, is less than the actual contributions that charities would receive.
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Mr. Speaker, this bill is about tax rules for charities, specifically certain dispositions of real estate or private corporation shares.
I would like to know if my colleague thinks it would be appropriate at some point to expand the scope of the bill to other types of assets such as those that can be liquidated by estates and that might have appreciated over time.
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Mr. Speaker, I guess I am an incrementalist by nature, and I thought asking for private shares in real estate might be a good first step. However, if this works out, the House could certainly entertain the application of the law to other assets. I would also remind the member that the first tax change related to this was 25 years ago, so these things happen over time. I certainly would be happy to look at the exemption for other assets as well.
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Mr. Speaker, I appreciate that the member brought forward this piece of legislation for the simple fact that I would never want to put a pass on being able to share some thoughts on the issue of charities and the important role they play in our society.
My colleague raised a question in terms of the cost. The parliamentary budget office is an apolitical office and the price it came back with was quite significantly more. I think we have an obligation to look at what our PBO says: over $750 million with the potential of a billion. That could be the actual cost if this legislation were to pass.
In listening to what the member had to say about the legislation and with what research I was able to do on the bill, I am not convinced that this is the best way for us to compliment our charities for the fine work that they have done over the years, continue to do today and, no doubt, will do well into the future.
One of the things that I have recognized as a parliamentarian for many years is the fact that Canada has to have some of the most generous people collectively in the entire world. If there is an immediate need in a community, city, municipality, province or territory, you name it, our constituents respond with open hearts and open wallets and purses. I have seen that on a wide variety of issues. We are very fortunate to have a population base that recognizes the importance of giving.
We see that taking place in many different forms. I would like to give a real tangible example. Let us say the PBO's numbers are accurate, because I believe they would be. When talking about those hundreds of millions of dollars, is that the best way we can invest potential tax dollars in terms of encouraging, promoting and supporting charitable organizations?
Every one of us is very much aware of what is taking place in Ukraine today, so I will use Ukraine as an example. The illegal, inhumane invasion that is taking place in Ukraine by President Putin is horrific. Tune into the news and one can see it first-hand on the TV, let alone imagining what the people are living through every day in Ukraine. I say that because one of the initiatives we took was on the issue of humanitarian aid. Even before Canada, as a government, came up with an approach in support of humanitarian aid, Canadians were already at the table. They were actually donating to charitable organizations that were ensuring there was humanitarian aid going to Ukraine. I remember it quite well when the federal government said that we are going to have, through the Red Cross, matching dollars.
That is why I say that it is a comparison. Take a look at what this legislation is doing and the amount of money that could potentially be redirected to see more benefit. In the Ukraine example, we allocated $10 million in terms of matching funds. It only took a matter of days before Canadians oversubscribed to that particular program, so the federal government increased it from $10 million to $30 million. I have not checked it recently in the last number of days, but I would not be surprised, if it were not there already, if it was very close, in terms of the contributions by Canadians.
That is what I mean when we take a look at charitable organizations, and there are many charitable organizations in every region of our country. Some of them have been hugely successful. Even during a pandemic, some have been successful. However, I concur that they have been hit hard as an industry during the pandemic, as other industries have also been hit hard.
However, there is no doubt in my mind that they will rebound. The real issue we should be discussing and debating today is how to maximize the benefits with what are the limited number of tax dollars that we have to deploy. When I look at this legislation, what I see is legislation that does not necessarily allow for an enhancement of the average person's ability to participate, or even provide that additional encouragement or be as universally accessible to some of the smaller organizations that are out there. Charities vary dramatically.
When we talk about health care needs in provinces, one can talk about the Grace Hospital Foundation that the member referenced. Check out their website. I did as the member was speaking. They have a wonderful donor's page with a list of different ways in which people can contribute.
We can talk about the Children's Hospital Foundations or we can go into the private area, such as the Ronald McDonald House Charities, which is across the country and which does an absolutely outstanding job as a corporation in providing the opportunity for Canadians, in particular, those from rural communities, to have a place when they are visiting cities because of a sick child. This is a wonderful organization.
Whether it is the larger charities that are there or it is the smaller charities, if we check with the Canada Revenue Agency, we can see a fairly lengthy list of non-profits and charities that are constantly looking for support. Going forward, I would like to think, in terms of dealing with charities, that, as parliamentarians, we would do what we can to support our charities, big or small.
As much as I can appreciate the member for Charleswood—St. James—Assiniboia—Headingley, a fellow Manitoban, bringing forward a piece of legislation from his perspective, I am not convinced that he has actually allowed for a wider subscription or if we are maximizing the potential limited dollars that come into the government that could go toward charities.
I am a big fan of charities, because I see the fine work they have done in our communities. I think of where there is potential growth, and I think of individuals like Sharon Redsky, who talks about indigenous charities and how the government could look at ways to support indigenous charities and the private sector, and that there is wonderful potential growth in that area. I am very much interested in ideas in that area.
We have the need for charities to assist people in many different ways, whether it is through food banks or direct funds to individuals. It varies greatly. I believe that, as I said at the very beginning of my comments, Canadians are very generous and we need to support and enhance that in whatever way we can.
We can do that through accountability and transparency and by working with organizations like the Canada Revenue Agency and the many different organizations that do not have CRA charity status but continue to do a lot of fine work throughout our country.
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Mr. Speaker, I thank my colleague for introducing this very interesting bill. I am perhaps one of the few people in the House who really enjoy studying taxation.
I want to take a moment during my speech to acknowledge the people of the Sainte-Scholastique sector of Mirabel, who continue to fight to have the Minister of Transport approve the Synergie Mirabel project. This project, which the Liberals are blocking, would provide housing for 40 seniors who are losing their independence. Again, the Liberals are blocking the project.
I am talking about this because today we are debating the taxation of charities, the taxation of philanthropy. I want to show how important our organizations are to our families and to our community and social fabric, not only in my riding of Mirabel, but also elsewhere in Quebec.
I was in Blainville last week and I visited Moisson Laurentides, an extraordinary organization that collects food to feed thousands of families and thousands of children, people who do not have an easy life, people who live in extraordinarily difficult situations. This organization helps our food drives, and that shows how important charitable organizations are.
Sometimes, in people's minds, charitable donations are not truly generous because they are simply used for tax credits. However, to a person, a business or an estate and its beneficiaries, that money is a real donation, even if it provides a small tax benefit in return, because those who make the donation are giving up their material goods and financial advantages that could have been used for their own benefit. We must therefore commend people who donate, people who participate. We need these organizations and I say thank you.
There are currently tax measures for charitable organizations. We know the principle of charitable giving. Most people give a cheque or cash to an organization. In return, they receive an official receipt that will give them a small deduction on their tax return.
There are also other ways to make donations, including by donating shares of publicly traded companies. Few people do that, but these are often very valuable donations to endowment funds for our universities, our hospitals or very large organizations. These donations are a huge help.
Donating shares has two tax implications. First, at the time of transfer of the value of the shares, the donor receives an exemption from paying the capital gains tax because they will not personally benefit from the donation. Second, they will receive an official tax receipt.
Not all businesses are incorporated, and neither are all sources of capital. There are different types of businesses. If someone owns their own business, if an individual is a partner in a small business or if an individual owns a building and decides to donate the value of the building, one of the two tax benefits is lost, the capital gains tax exemption. However, an official tax receipt is issued.
There are other types of donations that provide tax benefits, including donations of ecologically sensitive land, which we discussed.
I will now invite my colleagues opposite to listen. The bill seeks to achieve tax fairness in response to the following question: Why does capital in a given legal form provide a tax benefit when donated that is greater than the benefit that would be provided by the same capital, in the same amount, but in another legal form?
I think that this bill is worthwhile. I think it is worth studying it in committee because this is about revenue neutrality. The same amount of money, donated in two different ways, must be treated exactly the same way by the tax authorities.
I understand that we are talking about significant amounts of money. I think it is still worthy of study, but I remind those who are studying the cost of this new tax measure that the federal government already provides very significant tax exemptions to a great many organizations. I would even tell my colleagues across the way that their political donors received tax credits. We therefore really need to study this matter in committee.
We must consider costs and the issue will be studied in committee. The Parliamentary Budget Officer says that the measure will cost $777 million over five years. Members on the other side of the House sometimes forget that they need to divide by five, and I know that it is not easy.
These are tax expenditures, revenue the government is foregoing. This $777 million in tax expenditures will generate $981 million, which is close to an additional $1 billion in donations to our charities. At first glance, the cost to the government is lower than what would be donated.
True, that is not a very big gap. True, the Parliamentary Budget Officer told us there was some uncertainty and that the numbers are not 100% clear. However, when it comes to statistics and estimates, nothing is certain. For example, as recently as yesterday, the Bloc Québécois thought there was just one party in government, and now look at what happened.
Things can change very fast, especially seeing as, in this market, most of these donations will be made in the form of property, and capital gains on property change very fast. We have been seeing higher capital gains and higher property values. That gap could widen.
My suggestion would be to have the Parliamentary Budget Officer appear in committee. We have to study the measure, look at the numbers and analyze the impact of this measure. We are all reasonable people who can talk about these things.
It needs to be socially acceptable, because the rationale behind these tax credits for charitable donations is that perhaps governments have less need to collect taxes on the money that organizations give to serve the community, our hospitals and our universities. That can also cause distortions.
This money goes to some good causes, but it also goes to religious organizations and all kinds of other organizations that do not always correspond to the values espoused by our democratically elected governments. Social acceptability criteria are needed, and they do exist. We will examine them, but at first glance, I think that, on the simple principle of tax neutrality and fairness, if anyone in the House thinks that it is normal for existing charities to be entitled to the current tax treatment, it would be entirely reasonable to consider expanding it. We could also consider making amendments.
People from the Department of Finance will have to be invited to appear before the committee, because the bill was introduced under the Harper government. I would remind members that the Liberals decided not to implement it in 2015. The bill was reintroduced in the previous Parliament, so this idea has been around for a while. As we know, Mr. Johnson promoted this idea, so it has been around for a while.
We will have to ensure that the terms and conditions create true revenue neutrality. I cited the example of buildings for the member for Charleswood—St. James—Assiniboia—Headingley, who was kind enough to discuss his bill with me beforehand. As we know, when someone owns a building, over time there are profits, revenues and expenditures associated with it. A profit is made. Every year, the owner is entitled to a CCA, or capital cost allowance. Every year, this is artificially applied. When the value of the building increases, that decreases profit and taxes. When the amount associated with the liquidation of the building is donated to a charitable organization, the taxes are paid back. However, in the meantime, the owner will have indirectly benefited from an interest-free loan from the government for 5, 10, 15 or 20 years, which will have yielded income and a return that at certain times may have exceeded the value of the capital gain on the building expressed as a percentage.
Thus, there may be other tax benefits associated with these types of assets. We will have to study this, because when shares in a publicly traded corporation are donated, all the profits associated with said company's entire basket of investments are included in the donation, for example. We will have to look at all these aspects.
Taxation is complex. There are a lot of ins and outs. What is more, there are terms to discuss.
Again, I think this is a good initiative, that it is supported by our organizations, and that it will increase donations. I think it would be premature to turn our backs on Bill C‑240 and simply say no to it without studying it in committee.
It was a great pleasure to discuss this with the member for Charleswood—St. James—Assiniboia—Headingley. I know that he is reasonable and open. He knows his bill and taxation. I know that we will be able to discuss various ways of improving the bill. We could talk about other types of assets that may be on the table one day. I know that we will be able to do so calmly and intelligently in a spirit of tax fairness and neutrality.
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Mr. Speaker, I am pleased to rise to contribute some thoughts to this debate on Bill C-240. It is a bill that seeks to give the same treatment to private shares in real estate as is currently enjoyed for public shares when they are donated to a charity, and specifically to give a break on the capital gains tax for those assets when they are donated to a charity.
I want to start by recognizing the tremendous culture of giving we see in Canada, but I want to particularly single out Manitoba, as it is a province where people are known for their charitable giving and for sustaining charities that do all sorts of good work in our communities. This is particularly true when we are talking about the pandemic and the serious problem of homelessness, which existed before the pandemic, to be sure, but has worsened significantly during the pandemic. That is just one example of an area where charities do an incredible amount of work. Whether it is Siloam Mission, Just a Warm Sleep or the Main Street Project, Winnipeg certainly has benefited from the work of those organizations, which receive some government funding, but also depend, really, on charitable giving to sustain themselves and do the good work they do.
I think of L'Arche in Elmwood—Transcona. It operates in many places but traditionally has had a very strong presence in Transcona that goes beyond the support of housing for its clients. It includes social enterprises like the L'Arche Tova Café on Regent Avenue in Transcona, which is not far from where I live. It has been a wonderful gathering place for the community and helps build life skills for the folks who are part of the L'Arche community.
I could go on and talk a lot about all the various organizations that benefit from charitable giving, but I want to spend some time talking about the bill.
With respect to the bill, we on the NDP side of the House are concerned about the fact that there are already many ways for the wealthy to direct their wealth to causes they support. We are in a time when there has been a need for massive public expenditure to meet the needs that are faced by many Canadians. If we are to do that best, it means trying to coordinate behaviour. It means trying to make sure that when we are talking about wealth redistribution, we are doing it in a way that allows us to ensure the services people genuinely need, particularly those offered on a universal basis and on a basis of need, are adequately funded.
Frankly, this is an issue about which reasonable people can disagree, but we are in a moment when the thrust of our work ought to be on how we manage our resources collectively and well through democratic processes. Our time is not best spent figuring out how to make it possible for the wealthy to direct their personal wealth toward causes they think have value. Often members have heard the New Democrats talk in this place about the need to redistribute wealth, and we should do that by ensuring that the wealthy are paying their fair share.
If it were the case that the things we need in this moment were already adequately funded and that the wealthy were already paying their fair share, then I could see a pathway to a conversation about how we make it easier for them to donate directly to charities of their choosing. However, we are in a moment when, if we take seriously the question of public finance and the role the government needs to play in the pandemic recovery and facing down the challenges of climate change, it is not the best time to be talking about how to promote more complexities within the tax code that give tax breaks to individuals who are fortunate enough to have the kind of wealth in the first place to be able to donate.
It is not the typical donor who is donating in these ways. Often when we think about giving to a charity, we think about supporting different kinds of drives, like food drives for food banks, picking up a bit of food at the local grocery store or buying perogies. There is a church on the corner of Munroe and Watt that is currently doing an excellent fundraiser. It is mobilizing the great expertise in the faith community to make delicious perogies to support the people in Ukraine who are in desperate need of help. That is often what we think about when it comes to charitable giving. This is a select group of donors who may have a lot to give, but our conversation should be centred on how we redistribute wealth and how to do it fairly and democratically without creating more opportunities within the tax code for the very wealthy to direct their wealth to things they choose rather than to things we deliberate about in this place and in other appropriate places.
As I said, there is room for this kind of conversation, but for us it is not a priority of this Parliament to get it to committee to delve further into it. We believe there are other priorities the finance committee should have in this Parliament that very much bear on the kinds of supports and services that Canadians need. We would be better off talking about those directly and ways to finance them than talking about modifications to the tax code to allow the wealthiest among us to make those decisions for themselves.
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