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House Hansard - 43

44th Parl. 1st Sess.
March 22, 2022 10:00AM
Context: House Hansard - 43 - Mar/22/22
Mr. Mark Gerretsen (Parliamentary Secretary to the Leader of the Government in the House of Commons (Senate), Lib.)
Mr. Speaker, it is an honour to rise today. A lot of representation from Manitoba and from Quebec has spoken to this particular bill, and now I will lend my voice as the first Ontarian to speak to the bill before us. I want to go back to the comment I made at the beginning of the question I asked the member who introduced the bill, which was how important it is that private members' bills have an opportunity to come before this House to advance individual ideas that members have that they are passionate about. I know this particular issue is not just important to this member but indeed to a number of members who were around when it was introduced in the 2015 budget of Stephen Harper. As pointed out by the sponsor of the bill, it did not get implemented due to the change in government, so I can recognize that there is a desire for this. Indeed, I can also recognize where the intent of this piece of legislation is coming from and why it can be looked at as very favourable. I will be completely honest in that I am learning a lot about this initiative from reviewing the bill beforehand, forming some opinions on it and listening to what I heard in the House this evening. I cannot say that I have come to a conclusion as to how I will vote on it, but I am certainly interested in hearing more, and when we get to the second hour of debate, I will continue to listen to inform myself on how to vote. I will say from the outset that I have a few concerns. Perhaps between now and the second reading I can have a conversation with the sponsor of the bill so that he can try to address some of the concerns, which I will put forward now. The first concern is with respect to the fact that I see the legislation before us as being disproportionately in favour of those who are high-income earners, or those who are in a position to have shares in companies or real estate and have the ability to dispose of those towards charity. However, any taxing measure that seeks to remove tax from individuals who are high-income earners I generally look at as regressive forms of taxation because they would primarily benefit such a small class of high-income individuals rather than targeting the charitable organizations and the broader public. This brings me to my next concern, which is that I do not fully understand how the benefit is going to flow from the tax incentive to charity. I have been thinking about this as I have been listening, and I realize that the bill speaks specifically to shares and real estate, so I thought of who would donate real estate. What pops into my head when I think of the times when somebody would donate real estate is that, probably more often than not, it is part of an estate settlement through somebody's will. If somebody has a piece of property that they want to donate to a charity, that is something that would probably be willed, or the executor of an estate, through consultation with those named in a will, would come to a determination to donate a piece of property. However, the only recipient that I see as being a beneficiary to a tax implication on that is the actual estate in that case. The estate would save on the capital gains tax there, but that would not necessarily be transferred down to the charitable organization because in my example the charitable organization would have received that particular piece of real estate regardless of whether or not the capital gains tax was paid. In order to properly look at this, I would have to assume that we are not necessarily talking about estate planning, or those who are willing property or shares for that matter, but those who are doing it while they are still alive, outside of their estate. The question then becomes this: How often does that happen? How often do people gift shares in companies or gift property to charitable organizations while they are still alive? I certainly respect the fact that it indeed does happen, and it happens quite a bit, but I still fail to see how the benefit will be transferred down to the charitable organization. That is one of the big problems that I had with this. How does that benefit go from the individual who is receiving the capital gains benefit to the charitable organization? The third and last concern that I would bring to the attention of the House is with respect to the cost of this particular measure. I know that it has been brought up by a few other colleagues. I had the opportunity to ask the sponsor of the bill a question about that and he indeed did provide some clarity to me with regard to the discrepancy between what the PBO was saying and what he said in his speech. It makes sense when he talks about it being over a five-year period. That certainly clears up a lot of that, but there is still a cost to it. I guess I land on the position of trying to determine, personally, whether I see the benefit of the cost associated with this particular tax measure being of a benefit to society as a whole, and that is where I am a little concerned. As I indicated in my question, the Parliamentary Budget Officer said that it would be in the neighbourhood of $750 million, as much as a billion, and depending on what the uptake on this is, it could even be more. I hope the sponsor realizes that this is a real concern of some of us in the House, particularly me. I would also perhaps add that I do not think it is the regular practice of any government to allow a private member's bill to change our tax code specifically. The tax code is a very complex document. I know that there have been calls, many times over the last few decades, to relook at our tax code from square one, i.e., put everything aside and start to build a new one because of how complex the tax code is with the various different layers and parts that are inserted into it. I am concerned about what the implications of this might be as it indirectly or directly relates to the tax code. I know it sounds very straightforward, but as we have seen in other times, whether it be through government legislation, in particular, or private member's motions like this, changing the tax code could have other consequences that we are not looking at in advance when we are trying to study this as a whole. Those are the concerns that I have. I certainly, as I indicated previously, will continue to listen to the debate. I want to hear more as this comes forward in the second hour for the next reading of this and then hopefully inform myself to the point that I can make a good, wise decision and cast my vote in this place.
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