SoVote

Jun/2/22 5:41:58 p.m.
Watch

It being 5:42 p.m., it is my duty to inform the House that proceedings on the motion have expired. Pursuant to Standing Order 51(2), the matter is deemed permanently referred to the Standing Committee on Procedure and House Affairs. The House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

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Mr. Gabriel Ste-Marie (Joliette, BQ)

Jun/2/22 5:42:48 p.m.
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Re: Bill C-240

Mr. Speaker, it is an honour to rise to speak to Bill C‑240, which was introduced by the member for Charleswood—St. James—Assiniboia—Headingley. I had the opportunity to sit with him on the Standing Committee on Finance. All of his interventions were a testament to his commitment, diligence and thoroughness. This bill is no different. Bill C‑240 is the latest version of Bill C‑256, which was introduced during the previous Parliament and was, itself, a newer version of a measure that the Harper government had presented in its last budget in the spring of 2015. This measure unfortunately never took effect because the Liberals withdrew it when they came to power. Bill C‑240 would amend the Income Tax Act to provide an exemption from capital gains tax in respect of certain arm's length dispositions resulting from the donation of real estate or private corporation shares to charity. Bill C‑240 would apply to gifts of real property if the donation is made to a qualified donee within 30 days of the disposition of the property to an arm's length third party. We at the Bloc Québécois naturally support the principle of Bill C‑240. I first heard about this principle from the former leader of our party, Gilles Duceppe, who put me in touch with Mr. Johnson, who is sort of the driving force behind this bill. I had a chance to discuss the principle with him on a few occasions. I also had the opportunity to talk with the member for Charleswood—St. James—Assiniboia—Headingley about all of Mr. Johnson's work and his commitment to this issue. Coming back to the principle of Bill C‑240, right now, when a taxpayer donates a building or privately held shares to a charity, the taxpayer is presumed to have disposed of it at fair market value and must pay tax on the capital gains they have earned. Then, they receive an official receipt for the amount of the donation, also at fair market value. Since a wealthy taxpayer's tax rate is generally higher than the tax deduction associated with a charitable donation, which is capped at 75% of net income, the taxpayer ends up paying some tax on their capital gains, even if they did not actually pocket the gains. Under Bill C‑240, all real property would be subject to the same tax provision that already exists for ecologically sensitive land that is donated, for example, to nature conservation organizations. Since all charities provide valuable services to the community, we believe it is only fair that the donations they receive be treated in the same way for tax purposes. Also on the subject of fairness, donations of shares in private companies would now be treated in the same way as donations of shares in publicly traded companies, which are already exempt from capital gains tax. At first glance, this seems fair. As I said, the Bloc Québécois supports the principle. However, this bill needs to be studied closely in committee since it raises questions about both effectiveness and fairness. With respect to the effectiveness of providing funding for charities, the Parliamentary Budget Officer has estimated that passing this bill could result in the government losing out on $775.5 million in revenue over five years. In return, however, donations of real estate and shares in private companies would increase from $2.9 billion to $3.9 billion. That means the government would be paying $775 million to generate an additional $981 million in donations. However, it is not clear whether these $981 million in donations of real estate and private corporation shares would be entirely new donations. It is possible that some of them would have been made anyway, but in some other form. The elasticity model used by the Parliamentary Budget Officer to assess the impact of the bill does not make this clear. If some of that $900 million in donations would have been made anyway, it is possible that the measure will cost the government more than it brings in for charity. That is something that the committee will obviously have to seriously consider. Also, the $775 million over five years in lost government revenue is quite substantial. According to the government's tax expenditure statement, the capital gains tax exemption for donations of shares in publicly traded companies represented a $105 million shortfall in 2021. Adding private corporations and real estate would increase that by 150%. According to the most recent data I could find, total charitable donations deductions were about $4 billion in 2021: $3.2 billion for individuals, and $725 million for corporations. All of this should be taken into account when the bill is considered in committee. There is also the issue of tax fairness. The reason we have tax credits for charitable donations is to recognize the public value of charitable organizations and to elicit donations. Anyone who makes a donation gets a receipt that will reduce their taxable income. If the tax credit is to fulfill its role, it must be neutral, no matter the nature of the gift. If some donations generate greater tax benefits than others, the tax credit will incentivize certain taxpayers to structure their affairs with tax avoidance in mind, rather than eliciting more donations. We must, at all costs, prevent this from becoming a tax avoidance technique. Consider the relationship between the capital gains exemption and the depreciation of a property. Every year, the owner of an income property can deduct a portion of the value of the property from their income during the time they own the property. At the same time, as the book value of the property continues to diminish, the capital gain realized at the time of sale is higher. With Bill C‑240, this capital gain would become tax exempt. Will the taxpayer have to pay back the amortization tax deduction that they received while they owned the property? If so, that is fair. If not, Bill C‑240 might open a tax loophole for those who invest in real estate. That is something else that will have to be looked at in committee. Given that we know that the price of housing is skyrocketing, a measure that would encourage investors to outbid everyone else does not seem optimal to us. However, in our opinion, all of this could be resolved in committee. This does not change the Bloc Québécois's support for Bill C‑240 at second reading stage. In 2019, the special committee on the charitable sector in the other place concluded that the proposed measure in Bill C‑240 was positive overall and recommended adopting it. Once again, I want to thank the member for Charleswood—St. James—Assiniboia—Headingley for his bill and all his work as a parliamentarian. I also want to acknowledge Mr. Johnson's commitment and all the work he has done for this cause. I look forward to Bill C‑240 being studied in depth in committee.

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Ms. Rachel Blaney (North Island—Powell River, NDP)

Jun/2/22 5:50:18 p.m.
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Re: Bill C-240

Mr. Speaker, as was said earlier, we are here today to debate a private member's bill, Bill C-240, that really focuses on exempting real estate and private corporation shares from capital gains tax when the proceeds are donated to charities. I have worked in charities for a good part of my life. I really appreciate and respect the profound work that these organizations do in our communities. Whether it be helping newcomers to Canada, which was the charity I was a part of for eight years of my life, whether it be helping people who are looking for opportunities in terms of employment, or whether it be organizations that support people who are struggling in ways so profound that we cannot imagine in this place, they do profound and important work. When I look at Bill C-240, I am a little disappointed. There is so much that could be done to support charities, but the bill would do such a small portion, and it would really allow the wealthy of this country more control of where their tax dollars end up while requiring other Canadians to make up the difference of that tax bill. I think that is something we need to reflect on. We know that, across the country, the ultrarich are not paying their fair share. The top 1% earners across the country are not paying their fair share, and everybody else is. Everyday folks such as those across my riding of North Island—Powell River are paying their fair share. In my riding, for example, I think of the Comox Valley Ukrainian Cultural Society. Its members are working so hard, because their family members across the sea are suffering profoundly. One of the things they are doing is having regular rallies. People are donating to the cause, and they are helping out in every way they can. Not too long ago, I was at an event. One of those incredible volunteers stood up and talked about their plan to cook perogies and some traditional food that they would sell to raise funds, because they wanted to make sure that they did all that they could. I think of the Hardy Bay Senior Citizens' Society, whose members really do a lot of work. They work with over 200 people in the community, and they have a huge membership. They also support many people, such as by serving food to the elderly, especially during COVID. These folks were out there making sure that people who had any mobility issues got the supports they needed. They took food to their homes and supported them in every way they could. I think of the North Island Seniors Housing Foundation. This organization is one that I am profoundly proud of and am actually a member of. What I know is true is that this federal government does not support housing for seniors, and rural and remote communities across this country are really struggling to keep seniors in their communities. Seniors are coming out and saying, “We need housing that will let us stay in our community where we have our social infrastructure, and where we have all the people we know here in the community who will help us.” They do not want to be sent away, which is what is happening right now. We are seeing elderly people who, as they age, instead of staying in the warm companionship of their community, are being forced far away because that is where the accessible housing is. They lose all of those connections. I think of the Campbellton Neighbourhood Association in my neighbourhood of Campbell River. It is doing profound work to make the community and that area more recognizable, acknowledging the history of it in our community and really showcasing the spectacular opportunities that are there. I also think of PRISMA in Port Hardy, which does amazing work in bringing international musicians to our region and really celebrating the beauty of music in our community. When I look at the bill before us, it would not do what I would like it to. It really focuses on making sure that the ultrarich get another tax break. I do not know how many they need. I cannot believe that we are spending our time trying to find easier ways for them when we know how many people are suffering, especially with inflation. We know that people are looking for help. They are living paycheque to paycheque and are not able to get ahead. Even now, it is getting harder and harder for them. They are going to the places where there are food banks and where there are opportunities. We need to find ways to support those organizations. The bill is a small one, and would not actually address those areas of concern across the country. Again, it would allow the very wealthy, who are able to give away a substantial amount, to decide what charities are valuable instead of really looking at what is happening across our country and making sure that the supports go where they are desperately needed. We know that half of the top 10 billionaires have foundations in their family name. That comes from Canadians for Tax Fairness. Although charitable organizations perform valuable work, they are a poor replacement for adequately taxing the rich and can reduce tax revenues by more than they distribute. We need to look at this critically. I will not be supporting this bill, and I hope we will have more meaningful discussions about how the people in this country and the charities that serve us so well get the supports they need to do the work they must do to support everyday Canadians.

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Mr. Dan Mazier (Dauphin—Swan River—Neepawa, CPC)

Jun/2/22 5:56:04 p.m.
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Re: Bill C-240

Mr. Speaker, I am pleased to rise today to speak to Bill C-240, an act to amend the Income Tax Act. I would like to first commend my colleague from Charleswood—St. James—Assiniboia—Headingley for introducing this important bill in Parliament. I know my fellow Manitoban has done some tremendous work over his personal and professional life to improve his country. Bill C-240 is an addition to his great work. It is for those reasons that I am proud to call him my colleague and seatmate in the House of Commons. Charities contribute immensely to the social, cultural and economic well-being of Canada. There are over 85,000 registered charities in Canada that collectively employ 2.4 million Canadians and contribute 8.4% of our nation’s GDP. However, the reality is that charities have experienced some of the most devastating impacts from the COVID-19 pandemic. When charities are hurting, so are Canadians. In a previous debate, my colleague noted that Canadian charities lost $10 billion during the pandemic alone. That is $10 billion less for the community foundations that improve the towns and cities we call home. It is $10 billion less for the education charities that grow young minds and provide hope for a better future. It is $10 billion less for the wildlife charities that lead critical research and deliver habitat conservation. It is $10 billion less for the arts and cultural charities that fuel vibrant communities. It is $10 billion less for the food banks that so many Canadians now depend on. Now with a cost-of-living crisis sweeping across our country, I fear that charities will continue to suffer from the reduced disposable income available to Canadians. It was just yesterday when the Bank of Canada significantly raised interest rates in an attempt to control record inflation. When Canadians are paying significantly more in debt payments, they cannot afford to donate to local charities at the end of the day. Canadian charities have filled many gaps in our society that government could not fill. I think of the Community Foundation of Swan Valley, which recently contributed to early learning centres in Swan River. I think of the Touchwood Park Association in Neepawa, which contributed immensely to providing opportunities for individuals with disabilities. I also think of the Dauphin & District Community Foundation, which continues to support recreational services in the parkland region. I could speak endlessly to the thousands of projects and initiatives that charities are responsible for in my constituency alone, but now is the time for the government to step up and support Canadian charities. Bill C-240 would significantly help Canadian charities through a simple change to the Income Tax Act. 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 to a charity. This change would directly fuel a significant amount of new donations to Canadian charities year after year. Imagine a local business owner, an accountant, for example. An accountant owns a practice in their local community, and after years of hard work, the accountant decides to retire and sell the business. The owner sells the business for a $100,000 in profit and chooses to donate a portion of the sale to a favourite local charity. Under the current Canadian legislation, the accountant would be subject to a significant tax on the profit of the sale. In this case, the accountant would have to pay a capital gains tax of $25,000, assuming the absence of an exemption. This means the business owner would have $25,000 less to donate to a local charity, and the government would have $25,000 more to spend on who knows what. Bill C-240 would eliminate this tax bill if the accountant decided to donate the proceeds to a Canadian charity. The accountant would then have a choice between sending the money to the government or donating the money to a Canadian charity. I hope we can all agree that money is better spent when it is used in our local communities, as opposed to being sucked away in the black hole of government. The private sector can play a key role in supporting the work of charitable organizations, and Bill C-240 would enable it to do this. Too often, governments believe they have the answers to all of our problems, when in reality the citizens of our country are more than capable of addressing the needs of society. The independent Parliamentary Budget Officer has reported that Bill C-240 would increase charitable donations by nearly $1 billion over a period of five years. That is a significant number. Members of the House have an opportunity before them to forever increase donations to Canadian charities. I see no reason why they would oppose such a piece of legislation. Thankfully, this concept is not a new one. Previous Liberal and Conservative governments have initiated great work on this idea. The capital gains tax on gifts of publicly traded securities to Canadian charities no longer exists because of government action. Bill C-240 attempts to further this initiative with the exemption for shares of private companies. I can assure members of the House that there are many business owners who would rather give their money to charity as opposed to the government if they had the choice to do that. This bill would not incur any new government spending. It is simply taking the tax money that was on its way to the government’s coffers and putting it into Canadian charities. As the PBO report showed, for every one dollar the government forgoes under Bill C-240, approximately $1.26 goes to charity. This is a very noteworthy benefit. As an MP who proudly represents a rural region, I would be remiss not to mention the particular importance of charities in rural Canada. Charities are the foundation to the well-being of small and rural communities. It is very common for Canadians living in small towns to contribute to multiple charitable organizations. The limited services available in rural and remote communities emphasize the important role that charities have in supporting the people within them. Philanthropy is alive and well in rural Canada. Rural Canadians step up to help their neighbours and communities when needed. Charities turn this mentality into results. It is for reasons like this that I have no doubt Bill C-240 would have an amplified impact in rural Canada. In conclusion, Bill C-240 would directly support more than 85,000 registered charities in Canada at a time when they need support the most. It would incentivize more Canadians to increase support for the charities of their choice. There is a reason that so many high-profile charities and non-profit organizations have supported Bill C-240. I encourage members of the House to speak directly with charities in their local ridings to hear what this bill means to them. If they do so, they will hear the stark realities that Canadian charities are facing and the importance of creating an environment that incentivizes more giving. Once again, I would like to thank my colleague from Manitoba for introducing this important piece of legislation. I was proud to jointly second Bill C-240 and can assure him that I will be in voting in favour of this legislation. I encourage every other member of the House to do the same and send this bill to committee, where it can be further studied. As parliamentarians, I believe we should hear expert testimony on this legislation to better understand the positive impact it would have. Canadian charities have supported so many of us in so many ways. It is time for us to support them. Bill C-240 would enable us to do that.

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Mr. Bryan May (Parliamentary Secretary to the Minister of National Defence, Lib.)

Jun/2/22 6:04:27 p.m.
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Re: Bill C-240

Mr. Speaker, I appreciate the opportunity to take part in today's second reading debate on private member's bill, Bill C-240. As we know, the bill would provide an exemption from capital gains tax in respect of donations to charities resulting from certain arm's-length dispositions of real estate or private corporation shares. At the onset, I would like to make it clear that I support the intent of the bill, which is to say that I support and encourage the making of charitable donations. However, the bill is problematic in how it aims to achieve this. First and foremost among my concerns is that the proposed measure in the bill is regressive. This means that it would primarily benefit a particularly small class of high-income individuals rather than encouraging charitable giving by the broader public. More specifically, it would disproportionately benefit those who are holding private corporation shares or real estate other than a principal residence, which is to say, higher-income Canadians. That makes the bill unfair and puts it at odds with our government's goal of cutting taxes for the middle class while raising them on the top 1%. For example, we have increased support for families and low-income workers through programs such as the Canada child benefit and the Canada workers benefit, which have helped lift over one million Canadians out of poverty since 2015, including 435,000 children. We have also increased the guaranteed income supplement top-up benefit for low-income single seniors and enhanced the GIS earnings exemption, and we are increasing old age security for Canadians aged 75 and older in July 2022. We will continue to examine ways to improve the tax and benefit system to ensure that it is well targeted and fair. However, providing a tax break that disproportionately benefits the wealthy is not in keeping with this approach. What is more, the measure is poorly targeted at achieving the bill's goal of supporting charitable donations. The proposed measure could in fact result in a windfall gain to donors without actually increasing the amount of their charitable giving to charities. That is because donors could simply substitute their existing cash donations to charities with donations of private corporation shares and real estate in order to receive greater tax benefits. Considering the significant flaws in this proposed legislation, it is important to bear in mind that the Government of Canada's tax support for charitable donations is already recognized as being among the most generous in the world. The primary mechanisms for delivering this tax support are the charitable donation tax credit for individuals and the charitable donation tax deduction for corporations. For the 2019 tax year, individuals are estimated to have claimed over $11 billion in such donations through this provision, with federal tax assistance on these donations amounting to approximately $3 billion. At the same time, corporations are estimated to have donated $3.1 billion through this provision, with federal tax assistance of approximately $655 million. In terms of the charitable donation tax credit for individuals, the tax assistance received through the CDTC more than offsets any paid tax on the income used to finance the donation for the vast majority of individuals who donate more than $200 a year. The CDTC provides a 15% credit on the first $200 of annual donations, and for most donors, the CDTC provides tax assistance at 29% on the portion of donations over $200. What is more, donors with incomes subject to the 33% marginal rate can also claim a 33% credit on the portion of donations exceeding $200 made from this income. In addition to this federal tax assistance, all provinces and territories have charitable donation tax credits, with the average provincial credit being approximately 17%. In fact, total combined federal-provincial tax assistance averaged out to be around 46% on donations above $200 in 2019. For donors with taxable income in excess of the highest rate, tax assistance on donations would be around 50% in most provinces and as high as 54% in Nova Scotia and Alberta. Moreover, the government already offers special incentives to encourage donations of important assets such as publicly listed securities, ecologically sensitive land and certified cultural property through an exemption from capital gains tax for most such donations. When the exemption from a capital gains tax is included, the total tax relief provided on such donations can be as high as 81% when provincial incentives are added. The charitable donation tax credit can generally be claimed up to 75% of the donor's net income in a year. Unused donations can be carried forward for up to five years, or up to 10 years in the case of ecologically sensitive land. Unfortunately, Bill C-240 may actually undermine the effectiveness of the tax incentives provided under the ecological gift program. That is because currently the only type of real estate donation that is eligible for the full capital gains exemption is ecologically sensitive land that has been certified as such by Environment Canada and donated to certain qualified recipients to ensure conservation. Under the proposed measure, this targeting of support to donations of ecologically sensitive land would be blown wide open. That is because under this proposal, donations of the proceeds of the disposition of real estate to any charity would receive the same tax assistance, and this could introduce a perverse incentive for potential donors to simply sell their land to a third party, like a real estate developer, and donate the proceeds to any charity thus avoiding the ecogift certification and valuation process. In short, it could result in a donor getting the same tax benefit from turning ecologically sensitive land into a parking lot as they would get from donating it to an entity that would preserve and protect it. The measure is also expected to be costly. In February 2021, the Parliamentary Budget Officer estimated that the cost of this measure to the federal government would be approximately $778 million over five years. That is a lot of money to dedicate largely to wealthy Canadians at a time when we are working to rebuild from the impact of the COVID-19 pandemic. Supporting Bill C-240 would almost certainly increase the pressure on government to also provide special exemptions for donations of other types of property, such as virtual currency or cash gifts made after tax income. Such tax changes would ideally be undertaken through the budget process, which enables the government to fully consider trade offs, balance priorities and undertake new fiscal commitments only to the extent that they are affordable. A private member's bill like Bill C-240 does not afford us that scope. These serious shortcomings must be weighed against the generous and effective incentives for charitable giving that are already in place to encourage people to donate more to charities across Canada by reducing the after-tax cost of giving. Having done so, our government simply cannot lend its support to this private member's bill. I am thankful for the opportunity to make that and my position clear on this issue.

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Mr. Sébastien Lemire (Abitibi—Témiscamingue, BQ)

Jun/2/22 6:13:40 p.m.
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Re: Bill C-240

Mr. Speaker, I am pleased to rise to participate in this debate on Bill C-240. This bill will affect an important industry in Quebec, specifically non-profit organizations, or NPOs, and charities that we have all worked with as citizens and in our work as members. We are all well aware of the important contribution they make to our communities. I commend the enormous amount of work that these organisations do every day in conditions that are not always easy. I thank them for it. I want to take a moment to commend the leadership of the team at Le Passage de l'Aurore hospice. It is important for every RCM in our region to have this kind of end-of-life facility. Charities receive significant support, totalling nearly $4 billion annually, through the tax system. Canada's tax incentives for charities are among the most generous in the world. Can we do even more in this area to help that sector thrive? I believe we can. I also believe that piecemeal measures, which are often simplistic solutions, are no substitute for serious policy reform. In any case, it is high time that we prioritized the problems faced by NPOs and charities. Tonight we will essentially debate a measure to exempt donations involving private shares and real estate from capital gains tax. Let us review the history of this tax measure. Since 2006, the government has introduced a number of measures to boost charitable giving and cut red tape for the charitable sector. The House of Commons Standing Committee on Finance also studied the taxation of charities and NPOs, and this measure was among the recommendations in its February 11, 2013, report. This would benefit charities of all types, from hospitals, universities and cultural groups to the vast network of United Way–funded social service agencies across Quebec. The measure was first introduced by the government in the 2015 budget. At that time, it was described as a way to unlock more private wealth for the public good. However, the exemption of donations involving private shares and real estate from capital gains tax was never implemented, as the Liberal members opposed it. In 2019, the Special Senate Committee on the Charitable Sector concluded that the measure proposed in Bill C‑240 was positive overall and recommended that it be adopted. Did the pandemic finally manage to convince us that this sector of our economy is fragile and that action is urgently required? There continues to be an urgent need to increase the financial resources of charities and NPOs. It is vital that we examine the real needs of charitable organizations and NPOs. My criticism of this bill is that it once again avoids finding a comprehensive solution that would provide these organizations with greater predictability in the longer term. It does not address all the problems to identify potential solutions. At first glance, I do not see any serious problems with this new provision. However, I want to stress that better social policies and an adequate response to the problems of an aging population must be implemented in conjunction with the modernization of our tax system for charities. Social inequalities exist, and the government's declining contribution to health care has a lot to do with that. The Bloc Québécois wants the government to increase the main provincial transfer so the provinces can make long-term plans for providing services to their people. This is just basic respect for the Canada Health Act. Let us look at the changes proposed in the bill. Simply put, it would change the Income Tax Act to provide the same tax treatment as for donations of shares. Like other members of the House who commented on the consequences, I think we can look to the Parliamentary Budget Officer's numbers. That should not be far from the truth. We have a report here from the PBO stating that donations of real estate and private corporation shares could rise from $2.9 billion to $3.9 billion, an increase of $981 million. I encourage my colleagues to look at part two of the Department of Finance's 2021 report on federal tax expenditures, and more specifically the table on page 33, which shows how much it costs the government for each of its existing measures for charities and non-profits. I have a lot of questions that the finance committee could look into when studying the bill. The Parliamentary Budget Officer's budget model does not give any indication of how effective this measure is. Are these new donations? Will this measure encourage more people to donate private corporation shares or real property? Would this simply add a benefit for donations that the organization would have received either way? From a tax fairness perspective, tax credits for charitable donations are meant to recognize the public value of charities and to encourage donations. These tax credits are designed to encourage more donations, not to financially incentivize certain taxpayers to structure their affairs in a manner that minimizes their tax liability. I think it is particularly important to ensure that this does not become an excuse for the government to shirk its social responsibilities. We must not lose sight of technological change. That is hard for someone to do when they cannot afford it. My colleague from Joliette gave us his perspective on what we have heard from charities, as he has met with representatives from that sector of the economy. As part of my role in the Bloc Québécois, what I have been hearing in my meetings is that the resources for organizations are limited, and that this is hindering the adoption of digital technologies, including software, hardware and data. As well, organizations are not always able to hire or train the required staff. However, not‑for‑profit organizations are key partners in the delivery of services to ensure the health and well‑being of our community. Without access to critical technology such as computers, teleconferencing platforms, or a stable broadband connection, the ability of organizations to reach and serve their communities remains limited. This reality was laid bare by the pandemic and restrictions on the ability to deliver programs in person. When it comes to the day-to-day needs of charities, they will need to be able to gain access to new technologies to help them with their work and to keep up with the demands that come with the digital age. In closing, with the COVID‑19 pandemic, I would say that charities, especially those providing vital services to vulnerable individuals and communities, began expressing more directly what they needed from governments to survive and continue their work. Non-profit organizations have played a critical role during the COVID‑19 pandemic, but many are experiencing financial losses and facing increased demand for services. They need help to be able to continue providing critical programs and services. Once again, we too often see the government disengaging from its mandates. In many cases, when we talk about people's needs, especially in the charitable sector, it should be the government's responsibility to provide the services that people need. Instead, they have to turn to a sector that often has fewer resources. In the end, it is the people in the various communities who suffer. I therefore encourage everyone to be generous, because that is a win-win for everyone in our society.

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Mr. Jake Stewart (Miramichi—Grand Lake, CPC)

Jun/2/22 6:21:51 p.m.
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Re: Bill C-240

Mr. Speaker, it is a pleasure to be here today to speak on this important bill from my great colleague. The COVID-19 pandemic has hit Canadian charities extremely hard. Today I am happy to stand in the House and discuss a measure that would see the potential for a new revenue stream for our struggling charities across the country. Amending the Income Tax Act to provide an exemption from capital gains tax in respect of certain arm's-length dispositions of either real estate or private corporation shares to charities is an extremely important measure to see implemented. The bill would see to it that the proceeds of any arm's-length sale would qualify for exemption if donated within 30 days of disposition. The value is, of course, determined in the market by the sale and is not determined by the seller. Each of us in the House has a charity, or in fact several, that would be near and dear to our own hearts. About 10 years ago, I created a not-for-profit organization called The Josie Foundation. That is one that is very near and dear to my heart, along with so many others. It is important that we understand just how difficult it was for charities to raise funds as they normally would because of the pandemic and the strain that it put on charitable organizations. The importance of charitable organizations in Canada is without question, and we want to remind all people of the importance of volunteerism. Many hard-working Canadians volunteer their time. They get on the charities that are near and dear to their hearts and whatever charity they are working on benefits our country in a great way. All members of the House and every political party in Canada inside these walls would agree that we must do anything we can to help charities. This bill would increase the amount of charitable giving by incentivizing donations through this tax measure. Again, Canadian charities need all the help they can get right now. I will note that this measure was proposed in the 2015 budget by the Stephen Harper government, but in the 2016 budget, it was confirmed that the Liberal government did not intend to proceed with this measure. With this bill, we are trying to address the downturn in charitable giving that has been a trend for a while and was exacerbated during the pandemic. COVID-19 has had a massive impact on the charitable sector with the inability to raise funds at events, as well as donors being less likely to donate because they were personally struggling financially. When we add the concept of inflation to the mess and the problems charities are having raising funds, there is a really poor situation for the charities in this country. With inflation running rampant, the financial struggles to Canadians are rising. In turn, this is putting more pressure on household disposable income, which is driving down available donation revenue. It should be noted that the charitable sector represents $151 billion, or 8.1% of Canada's GDP. Currently, the Income Tax Act allows for this tax treatment for the proceeds of the sale of publicly traded shares. This bill would provide similar tax treatment for the sale of private shares and real estate. The Special Senate Committee on the Charitable Sector recommended the government implement this measure as a pilot project in June 2019 in its “Catalyst for Change” report, recommendation 34. People at home and potentially people in the chamber are wondering whether the bill seems to disproportionately favour those who are high-income earners. The answer is that it is important to note that not a single donated dollar remains in the hands of the donor. Each dollar benefits the charity that receives it. This bill would make these donations more affordable for donors, no matter what their income level is. It is very good for charitable organizations. Many small business people are not necessarily high-income earners, but would be incentivized to make donations if they did not have to pay the capital gains tax associated with the sale of their businesses. As to whether the nature of the tax is regressive, this is something that could be ascertained through expert testimony at the finance committee if the bill were ever to pass. We know we have to pass this bill. If this bill does not pass, the people in every charitable organization in the country are going to feel sad, but they are also going to feel ashamed. Government members and parliamentarians know that this is the type of bill that each of us can represent. It transcends partisanship. We can look at this bill and each of us can understand how important it is for us to help this sector. Another question that people might have is how the benefit flows from the tax incentive to the charity. When business owners decide that they wish to sell shares in their businesses, under this bill, proceeds from the sale of those privately held shares would qualify for a capital gains tax exemption if donated to a charity by the donor within 30 days of the close of the transaction. It is great news for charitable organizations. For the purpose of clarity, the shares of the donor's company could not be donated, but rather the proceeds derived from the sale of those shares could be donated. This mechanism helps avoid any valuation ambiguity, as the sale must be an arm's-length sale for the purpose of value. Some may wonder how often people gift shares and how often people gift real estate, in particular outside of a will. The bill would not incentivize gifting private company shares or real estate. Rather, it would incentivize the donation of the sale proceeds derived from the sale of private company shares or real estate. One example is important as it pertains to real estate. Someone who invested in a small apartment building or a duplex several years ago is now retiring and decides to sell the place. Currently, when they sell, they will be required to pay capital gains tax, which would be roughly the equivalent of 25% of the increase in value of the property during the period of time it was owned. Under Bill C-240, those proceeds could be donated, in their entirety or in part, to a charity of the donor's choice and the donor would receive an exemption from the tax. In the end, we would incentivize somebody to be more charitable in our country, which would benefit charitable organizations. Some might ask about the benefit to cost that is associated with this legislation. Someone correctly pointed out that a Library of Parliament report references two different types of tax costs. The first is the tax cost related to the forgone capital gains taxes. As I mentioned earlier, this equates to roughly 25% of the actual gain. The second cost is the cost due to behavioural change, as the goal of the bill is to increase charitable giving. Additional charitable tax receipts would also be issued. This is a win-win all day for charitable organizations, for the people who benefit from the great work of charitable organizations and for our great country when we put forth legislation such as this that would actually make a real difference in our society. The federal tax costs related to the issuance of tax receipts may vary based on the amount of the contribution and individual income, but my understanding is that the cost is roughly 25% to 30% of the contribution. This, too, could be clarified by testimony. I want to thank you again, Mr. Speaker, for allowing me to bring forth this insightful commentary. I would be happy to meet with any members of the House, but I want to say again that Bill C-240, sponsored by my great friend from Winnipeg, is the type of bill that every political party can be proud of and that every member of the House can support. They are not supporting a political party here. They are supporting every charitable organization in this country, and we will proudly take all of their support. We need it. This is good for Canadians.

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All Topics

The Deputy Speaker

Jun/2/22 6:31:27 p.m.
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Continuing debate. I see no other interventions, so I recognize the hon. member for Charleswood—St. James—Assiniboia—Headingley with his five-minute right of reply.

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Mr. Marty Morantz (Charleswood—St. James—Assiniboia—Headingley, CPC)

Jun/2/22 6:31:48 p.m.
Watch
Re: Bill C-240

Mr. Speaker, at the outset, I would just like to say I am sorry I cannot be there in person to speak to the bill I have introduced, but I want to thank every single member of Parliament who has spent so much time studying this bill and making arguments. I realize that there are many positive arguments and there are some questions around the bill. That is why I think it is very important that a bill that could have such a profound effect on charities across the country be studied in committee. When I say “charities”, I want to be clear that I am talking not just about charities; I am talking about the people who these charities serve, and what I have been saying throughout this whole process is that when charities are hurting, real people are hurting. This bill can help charities get back on their feet and help Canadians get back on their feet. The idea of the bill came from Mr. Don Johnson, who I am sure many of the members listening know has been advocating for this. He advocated the tax change that led to the exemption for publicly traded securities, and he has advocated this change. I worked with him very closely. I have to say there is broad stakeholder support also, and I ask every member to consider what institutions in their own ridings could benefit in a great way from this change. I know Imagine Canada has endorsed the bill, as have Diabetes Canada, the Heart and Stroke Foundation and the Special Olympics. Many charities have endorsed this bill, because they are in a situation right now where they have been affected in two ways. It is kind of a double whammy, when it comes to charities. They were hurt tremendously during the pandemic, and now the cost of living crisis is making it almost unaffordable for people to make contributions to charities. With this bill, I do not need to go through the numbers. They have been reiterated in the Parliamentary Budget Officer's report. Everybody is aware of them, but the reality is that the amount of money donated to charities would exceed the cost to the government in all cases. I disagree with a fact one of the members from the Liberal bench said: that this was just a tax break for the wealthy, or something to that effect. Most small business people are not wealthy people. Some people just own a duplex or a small apartment building. It does not make them wealthy. This bill highly incentivizes charitable giving at a very efficient tax cost to the government. It is not a new idea. It piggybacks on the concept of the donation of publicly traded securities. It was introduced in 2015 in the budget, which passed. All I am really asking is that we not let this bill die here. I am just asking that we let it go to committee, bring expert testimony and ask all the questions that have been asked in the House. If members who have reservations about the bill are still concerned about it when it comes back to the House, they can vote against it then, but I do not think it would be fair to the people who would benefit from this bill to essentially kill it right here, when it comes up for a vote next week. I really do not. This bill deserves the attention of the finance committee. It was, as some of my colleagues have mentioned, a recommendation in the Senate report on charities just a few years ago. It is an idea that is worth every member's consideration in the House. I just want to say, on the issue of regressivity, that it is also another issue that could be debated at committee. I personally do not think it is regressive, because the reality is that whoever is making these donations does not get to keep any of the money. Every single dollar would go to charity, so I do not know how someone, whether they are wealthy or not, when they are parting with every single dollar, is being benefited other than that they are being incentivized to give. Those are my general comments. I want to again thank everybody for their serious consideration and thought on this bill. I ask members to please vote for it. With that, I would like to ask for a recorded vote.

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The Deputy Speaker

Jun/2/22 6:36:14 p.m.
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We will wait for a second here. 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 readopted on division, I would invite them to rise and indicate it to the Chair. The hon. member for Winnipeg North.

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Mr. Kevin Lamoureux

Jun/2/22 6:36:44 p.m.
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Mr. Speaker, I would ask that there be a recorded vote.

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Recorded
Ask

The Deputy Speaker

Jun/2/22 6:36:57 p.m.
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Pursuant to order made on Thursday, November 25, 2021, the division stands deferred until Wednesday, June 8, 2022, at the expiry of the time provided for Oral Questions.

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Ms. Heather McPherson (Edmonton Strathcona, NDP)

Jun/2/22 6:37:24 p.m.
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Mr. Speaker, Canadians are united in their support for Ukraine and their condemnation of the horrific and appalling illegal war and genocide being perpetrated against Ukrainians by Vladimir Putin and the Russian Federation. Canadians want Canada to support Ukraine and Ukrainians. Canadians want their government to act, and time and again it has promised to act. It has promised to sanction Putin and the oligarchs. It has said all the right things about backing Ukraine. The government has once again made grand announcements about supporting Ukrainians fleeing the war and seeking refuge in Canada. However, like so many other pronouncements the government makes when it comes to support for Ukraine and Ukrainians, it is missing the mark. For three months my fellow New Democrats and I have been calling on the government to impose sanctions on Putin and the Russian oligarchs who are financing this illegal war, yet we know now that, while the Prime Minister was making these announcements, millions of dollars were being diverted. Millions of dollars that should have gone to Ukraine and used to support Ukrainians settling in Canada was taken away from the country. The government has missed the mark when it comes to humanitarian support. From the beginning of this illegal war, I have called on it to commit to working with Canadian organizations already on the ground, organizations that have the connections and experience to ensure that our humanitarian response is effective. Canadian organizations such as the Ukrainian Canadian Congress and the Canada-Ukraine Foundation have to do their own work. They have to fundraise separately to get humanitarian aid where it needs to go in Ukraine. Now, once again, when it comes to supporting Ukrainians fleeing the war, we now have yet another example of the government making big promises while again missing the mark. The Ukrainians fleeing this war are incredibly vulnerable and deeply traumatized. I met with many Ukrainians fleeing the war in Ukraine when I travelled to Poland and the border towns. What I saw was heartbreaking. I could not help but think of my parents, my children and myself in those situations when I saw those who were fleeing that violence. They are seniors, children, women, and mothers who are trying to find a safe haven for their children. They need housing, health care, child care, financial support, social supports, and to know that they will be safe and secure for the long term. Instead of providing these things, instead of living up to those promises, the government is providing work permits, work permits for seniors and women who cannot leave their children. The problem here is that the government either does not understand the issue or does not want to understand the issue. These refugees are refugees from conflict and need to be treated as such. They need to be named as refugees. They need to receive housing, financial support, and a path to permanent residency and citizenship if that is what they desire. Refugee status would give Ukrainians the chance to actually find refuge in Canada, but the current government is not granting them that status. Why not? It is because, if it acknowledges that these women and children are refugees, it would be obligated to support them, so instead the Liberals pretend. They pretend that Canada is giving refuge to these beleaguered and traumatized women and children. They pretend that Canada is living up to its promises. The Liberals pretend to care, and this is sickening me. It is time they stop pretending. Will the government finally commit to providing real support for Ukrainian refugees?

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Mrs. Marie-France Lalonde (Parliamentary Secretary to the Minister of Immigration, Refugees and Citizenship, Lib.)

Jun/2/22 6:41:25 p.m.
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Mr. Speaker, I am honoured to respond to the hon. member's questions because I do not need to pretend we care. We do care. Canada is firm in its support of Ukraine. Ukrainian immigrants are an important part of Canada's cultural history, and we continue to support the courageous people of Ukraine. As part of our commitment to support those fleeing Russia's unjustifiable invasion of Ukraine, our government has put in place immigration measures to help Ukrainians fleeing the war find safe haven here in Canada. The Canada-Ukraine authorization for emergency travel program is an accelerated temporary residence pathway that is designed to help Ukrainians who are seeking safe haven in Canada while the war in their home country continues. Between March 17 and May 25 of this year, IRCC received just over 259,000 CUAET applications, of which more than 120,000 have been approved. As well, between January 1 and May 22, more than 35,455 Ukrainian citizens arrived in Canada at our land and airports of entry. These arrival statistics cover all Ukrainian passport holders, including returning Canadian permanent residents of Ukrainian origin. On April 9 of this year, the Prime Minister announced a series of additional measures to help Ukrainians find a safe haven in Canada. Working closely with our partners, including provinces and territories, settlement organizations, and NGOs across the country, we have implemented these key support measures. While Ukrainians are not coming to Canada as refugees, we are working hard to make sure that they have the travel support, transitional financial assistance and settlement services they need so they can come to Canada and thrive in their communities. I am extremely pleased to announce that the third federal charter flight, which was carrying 319 Ukrainians, arrived moments ago in Halifax. This is in addition to the two other federal charter flights, one to Winnipeg on May 23 and one to Montreal on May 29. We have had the great honour and pleasure of welcoming Ukrainians in our communities. We have helped more than 900 Ukrainians travel to Canada. These charters were available to Ukrainian nationals and their family members who are approved through the Canada-Ukraine authorization for emergency travel program. As well, those arriving on the charter flights who do not have suitable arrangements have been provided with temporary accommodations for up to 14 nights. In the coming weeks, we expect to expand the measures to include Ukrainians who arrive under the CUAET programs in other Canadian cities and who have no other confirmed accommodations. We have also put in place the necessary supports so Ukrainians and their families can thrive in their new community after they arrive. Starting today, June 2, Ukrainians arriving in Canada under the CUAET program are also able to receive transitional financial assistance. The benefit, a direct one-time payment of $3,000 per adult and $1,500 per child 17 years and under, will help Ukrainians and their families meet their immediate and basic needs, such as transportation and long-term housing, as they settle in their new communities and look for work. Ukrainians arriving under the CUAET program, as well as those who were already in Canada when the war broke out, are also receiving vital settlement program services, and these services include language training, enrolling children in school, and employment counselling and mentoring. We will continue to be there for our Ukrainian community, and I am happy that I was able to answer the question.

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Ms. Heather McPherson

Jun/2/22 6:45:38 p.m.
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Mr. Speaker, that did not answer the question. Frankly, I made it very clear in my question that it was not how many are coming here; it was about providing the support for them when they are here. This is basically the answer of thoughts and prayers. The government is so good at promising things and delivering absolutely nothing for the people who need them. Canada's resettlement agencies and Ukrainian organizations in Canada have been raising the alarm for weeks now that we are headed towards a crisis unless the government changes course. Because Ukrainians are not considered refugees, they are arriving in Canada without access to the support networks that they need. The Ukrainian Canada Congress national president has noted that Canada is failing Ukrainians. It does not have to be this way. The government could act today, right now, and make this right. It should not leave it up to donors. It should not leave it up to sponsored flights. The government should grant Ukrainians refugee status and give resettlement agencies and Ukrainian organizations the support and tools they need to assist Ukrainian refugees.

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Mrs. Marie-France Lalonde

Jun/2/22 6:46:49 p.m.
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Mr. Speaker, I thank the member again for her questions, because that allows me to tell her exactly what we are doing above and beyond what I have shared with her. When we talk about the services that we are going to continue to provide on March 30 of this year, we are also extending settlement program services, which actually are typically only available to permanent residents, to make them available until March 31 of next year. This will help with housing searches; language training; information about orientation to life in Canada, such as helping children enrol in school; information and services to help access the labour market, including mentoring, networking, counselling, skills development and training; activities that promote connection with communities; assessment of other needs Ukrainians may have; referral to appropriate agencies; and services targeting the needs of women, seniors, youth and LGBTQ. We will continue to welcome Ukrainians seeking refuge from Putin's war as quickly and safely as possible.

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Mr. Mike Morrice (Kitchener Centre, GP)

Jun/2/22 6:47:57 p.m.
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Mr. Speaker, I am thankful for the chance to come back to a question I asked of the Prime Minister about a month or so ago. I asked the question because it was on long-term care. Back in 2019, when I was knocking on doors in my community, I heard concerns from neighbour after neighbour, both those who had a parent in care and those who were caregivers, about the crisis they saw as a result of decades of underinvestment. It is an example of how the pandemic really only made things worse, because if we fast-forward to 2021, we all know that the crisis in long-term care exploded in the pandemic. In my community, for example—and I have shared this story in the House before—I will not forget anytime soon speaking with a woman who was sharing how her mom had been waiting in hospital for a bed in long-term care for three months. As she told this story, I could see the tears streaming down her face. I also spoke with a personal support worker who shared, and she was being honest, that “I am not giving four hours of care a day; I am lucky if I am able to give four minutes of care a day.” It is obvious that this crisis continues in long-term care, and we are not out of the woods yet. In fact, in the most recent numbers I have available on the wait times for long-term care, in the summer of 2021 there were still 52,000 people on the wait-list. Last year, we heard in the Liberal platform and from the Prime Minister himself that billions of dollars were being promised for long-term care. He shared the words that nothing was off the table when it comes to addressing the crisis in long-term care, but if we fast-forward to what was in the budget, and I looked right through it, long-term care was only mentioned once, and when it was mentioned, it was only about funds that were previously allocated. There was also no mention of the safe long-term care act, despite this being part of the agreement between the NDP and the Liberals, one of the few really key new items. This is what prompted my question to the Prime Minister at the time and my continued concern when it comes to addressing the crisis. To offer some ideas on what could be done, we need look no further than what the former member for Nanaimo—Ladysmith, Paul Manly, had proposed in Motion No. 77. He proposed eliminating the wait times; paying long-term care staff adequately for their work, and providing benefits and paid sick leave; implementing a basic care guarantee that would ensure that we have a minimum of four hours of regulated personal care per day for every resident; taking the profit out of long-term care and transitioning long-term care facilities to non-profit and co-operative management structures; and introducing a safe long-term care act modelled after the Canada Health Act to be sure that it establishes national standards for care and staffing. In the Prime Minister's response, he shared that the government is working with provinces and territories. Tonight, for the parliamentary secretary, I have three questions I would love to hear more about. First of all, does he and the governing party recognize that the crisis in long-term care continues? Second, when, specifically, will the governing party follow through on what they have already promised: tabling the safe long-term care act? Finally, if he can provide an update as to whether work is being done with provinces and territories, exactly what work is being done?

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Mr. Adam van Koeverden (Parliamentary Secretary to the Minister of Health and to the Minister of Sport, Lib.)

Jun/2/22 6:52:02 p.m.
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Mr. Speaker, I would like to thank my friend and colleague from Kitchener Centre for his work on this file and his dedication to seniors living in his riding and across the country. Many seniors have faced significant health, economic and social challenges due to COVID-19, which has really laid bare the systematic challenges in Canada's long-term care system. As soon as COVID-19 exposed some of these challenges in our long-term care system, our government was there to help the provinces and territories with additional PPE, with the armed forces in the long-term care facilities in Quebec and Ontario and with much more. Our government has also stressed the need for permanent, long-term solutions for long-term care facilities so that the Canadians living and working in them are safe and treated with respect and dignity. Key to achieving that level of safety and comfort are national standards for long-term care. I would remind the member opposite that in March 2021, the Standards Council of Canada, which is a federal Crown corporation, the Health Standards Organization and the Canadian Standards Association announced that they would be collaborating on the development of two new complementary federal long-term care standards. That was a result of work from our government. Their collaboration with stakeholders across the country has focused on addressing the delivery of safe, reliable and high-quality long-term care services, the design and operation of long-term care homes, and infection prevention and control practices in long-term care. For HSO's standard, this means resident-centred care practices: a respectful team-based environment, a healthy, competent and resilient workforce with healthy working conditions, and strong governance practices and operations. For the CSA group standard, this means cleaning and disinfecting processes, waste removal, HVAC, plumbing, medical gas systems and the use of more modern technology in care systems. We expect that the final release of those standards will be done at the end of this year. Budget 2021 also included a $3-billion investment to support the provinces and territories in their efforts to apply these standards and ensure permanent changes are made. The COVID-19 pandemic continues to highlight the challenges in long-term care, including gaps in infection prevention and staffing. I believe that answers the first question my colleague asked, which was whether we recognize that this crisis is continuing. The answer is yes. Our government has made significant investments, including $4 billion to help the provinces and territories improve the standards of care in those facilities. In addition to that, there is $41.9 billion in cash supports to the provinces and territories through the Canada health transfer. Canadians can rest assured that we will keep working hard with the provinces and territories so we can fight COVID-19 together. That includes in our long-term care facilities. On the campaign, we also committed to investing an additional $25 billion over five years to better support the health care system and provide better mental health services across the country for seniors. The provinces and territories will now receive over $47 billion through the Canada health transfer in 2021 and 2022, with the territories getting $500 million, to help them prepare for outbreaks of COVID-19. To date, our government has spent more than eight dollars out of every $10 in this country to fight the pandemic. There were a couple of other questions. When will the tabling of the safe long-term care act commence? I believe that work is under way. We are working expeditiously on that because it is a priority for this government. I do not have any updates on work with the provinces, but I look forward to the next round of questions from my friend and colleague from Kitchener Centre.

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Mr. Mike Morrice

Jun/2/22 6:55:38 p.m.
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Mr. Speaker, I thank the parliamentary secretary not just for his kind words, but for actually answering the questions that were offered this evening. I think a respectful approach and a discourse that feels exactly like that are what we should see more of in this place. I understand that he might not be able to share more about when the safe long-term care act would be introduced, so I wonder, with this final bit of time we have available, if he could share his reflections on why no new funds were allocated in the most recent budget, recognizing there is a crisis we are still in. Is there more specificity he can offer for what would be in the safe long-term care act? What can all parliamentarians do to advance it more quickly, recognizing that a crisis requires urgent action?

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Mr. Adam van Koeverden

Jun/2/22 6:56:37 p.m.
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Mr. Speaker, while I know that it is challenging for Green members to appear at committee, I would invite the member to the health committee at some point. Work is under way. We have been addressing human resources in health care, which is related to this challenge. I would also highlight what I said in a previous round, which is that we are investing $3 billion through budget 2021 to ensure that standards for long-term care are applied and that permanent changes are made. We all agree that people living and working in long-term care deserve to be treated with respect and dignity in a safe environment. Our government has invested in immediate solutions while supporting efforts to permanently correct what needs correcting in the long-term care system, not only to better protect against a future pandemic, but to make every single day a day of safety and good living. We owe this to our seniors in the country. They built this country. We are grateful for this country. It is a great place to live, and we owe them a life of dignity and respect. That is what we are achieving together by collaborating in this place.

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