FINA Committee Report

Introduction

The New Democratic Party (NDP) wishes to reiterate its support for Canada’s charitable sector and is pleased that the Finance Committee was able to meet with so many of the representatives from the sector and experts on charitable giving.

While the NDP members of the Finance Committee are generally in agreement with the findings of the majority report, we have significant concerns regarding government actions to politicize the charitable sector and the cross-income fairness of the structure of tax incentives.

The Official Opposition, therefore, feels compelled to issue a supplementary opinion in order to emphasize the need for comprehensive government policy that addresses the root causes of problems faced by the charitable sector.

Federal Revenues

The NDP recognizes the vital importance of a robust charitable sector; however, we are concerned that the implementation of a number of the majority report’s recommendations would drastically reduce federal tax revenues, which are essential for the government to meet its basic commitments to the Canadian people.   

At a time when the government swears by deficit reduction – while blindly slashing services to Canadians - it is important to take into account this potential loss of revenue.

Tax incentives should be viewed as a form of government expenditures, and their value must be evaluated as such.  As Professor Calum Carmichael (Associate Professor, Research Associate, School of Public Policy and Administration for Community Innovation, Carleton University) noted in his presentation to the Committee:

“The Government of Canada has the responsibility to allocate tax revenues to purposes that best serve the needs of its citizens. This responsibility extends to the revenues that the government foregoes in providing tax incentives, whether by credits or deductions on charitable contributions.”

While the majority report’s recommendations make reference to “the government’s stated intention to balance the budget in the medium term”, we remain concerned that this balance may involve the government proceeding on some of the more costly recommendations, while slashing a similar amount of spending from the front-line services on which Canadians depend.

On a related note, Rachel Laforest (Associate Professor, School of Policy Studies, Queen’s University) raised the following concern regarding the charitable sector’s role in the context of government cutbacks to frontline services:

“The assumption is that voluntary sector organizations will be able to pick up that burden. I think it's important to ask ourselves whether the voluntary sector actually has the capacity and the ability to take up this additional burden, because ultimately it will have an impact on our communities and our quality of life.”

The NDP members of the Finance Committee strongly agree with this note of caution. The federal government provides essential services to Canadians and this burden should not be placed upon the charitable sector.

Equitable Incentives

The NDP members of the Finance Committee strongly believe that charitable donations, in the form of time or money, should not be the sole purview of the wealthiest Candians. We are concerned that the recommendations in the majority report have ignored concerns such as those expressed by

Canadians For Tax Fairness, who emphasized:

“Our primary concern is that we not skew the tax credit system even more in favour of the rich, because we know that the rich have different priorities from the poor. The way the tax system operates, it treats donations by the rich more generously in terms of incentives than donations by those who give under $200.”

Political Attacks on the Charitable Sector

We have significant concerns regarding the government’s escalating politicization of charitable status. The charitable sector is now in a state fear that any criticism of, or disagreement with, the policies of the Conservative government will result in the loss of funding or the revocation of charitable status by the CRA.

During the Committee hearings, Mark Blumberg of Blumberg Segal LLP, expressed this concern:

      “I think people, parliamentarians, senators, and cabinet ministers should be more careful when they talk about the charity sector, when they make allegations and things like that. I think that would probably be more helpful than more tax incentives, in terms of encouraging public trust in charities….we live in a democracy and people are entitled to have their views. Some people don't have much money and aren't able to really express those views very much.”

The NDP members of the Finance Committee are of the firm belief that support for the charitable sector must not be politicized or dependent on ideology.

Conclusion

The primary points that the NDP members of the Finance Committee believe should be taken from this supplementary report are as follows. First, that any changes to the funding or tax incentives for the charitable sector must undergo thorough financial analysis and no changes should be implemented that will harm the federal government’s ability to meet the needs of Canadians. Second, that political attacks from the government against the charitable sector must come to a halt.