April 4, 1957

LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

We had quite long discussions all during the course of our preparation of the budget. Since no change has been recommended I do not think I ought to launch into a debate about it. I just want to say that we had most serious consideration of the matter, and it is a fact that that consideration will continue.

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell:

I am sorry, but I did not hear what the minister said at the last of his remarks. Would he repeat it?

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LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

We shall continue to consider it, because our discussions were not completed by the time it was necessary to produce the budget.

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LIB

William Alfred Robinson (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The Chairman:

Paragraph 1, discussion completed. We now come to paragraph 2.

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CCF

Robert Ross (Roy) Knight

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knight:

I should like to ask the

minister what is the position of a person wanting to give a grant or a gift to an institution like a university, having regard to this charitable organization clause in paragraph 2. I have received some requests for information. People would like to give to a university much larger gifts than the 10 per cent would amount to. They feel that they should be allowed to do this without loss to themselves, particularly having regard to the fact that it is going to cost the government a good deal of money for grants to universities from now on. Perhaps we should encourage people who are so minded to get rid of some of their extra money-that is, those who are fortunate enough to have it- in that way.

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LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

This is one of the reasons the recommendation is before the committee. There are cases when individuals and corporations are appealed to for donations not just for the operational expenses of a university or school but in a major campaign to raise money either by way of endowment or for capital outlay.

On such occasions there are some individuals and corporations who are reminded by their lawyers, and also by others, that there are limitations of 10 per cent and 5 per cent respectively on the amount that would be permitted by way of deduction. For that reason we decided we could ease the rule by allowing a donation in one year, to the extent that it was in excess of the 10 per cent or 5 per cent, to be carried forward into the following year for deduction in the second year. I think this will have the effect of permitting larger contributions for charitable purposes of this kind, and in other cases as well, on those special occasions when large sums of money seem to be needed.

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PC

Daniel Roland Michener

Progressive Conservative

Mr. Michener:

While this proposal is

remedial in the sense that it will permit a specially large donation to be spread over two years, I do not think it meets the needs of a good many people who are generous givers and who use up their 10 per cent exemption by the middle of the year. I wonder whether the minister would consider again the desirability of meeting this problem in a different way, that is by increasing the exemption from 10 per cent to 15 per cent in the case of individuals and from 5 per cent to 7J per cent in the case of corporations. It is not likely to be a costly item to the treasury, but it would be an encouragement to those generous givers for whose giving there are certainly plenty of worthy objects these days.

Income Tax Act

I have run across many cases, as have other members, where the 10 per cent is exhausted by the middle of the year, and that does restrain the generosity of people who want to help worthy causes. In fact I think a good many people feel that their normal giving to their church accounts for the 10 per cent, and anything they give on top of that of course is beyond the exemption which now exists. I do suggest this is a matter worthy of consideration by the minister.

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SC

Ray Thomas

Social Credit

Mr. Thomas:

When I attempted to rise just before the previous speaker I had in mind exactly the same points he had. I would urge the minister to consider raising the exemption beyond 10 per cent because, as has been pointed out, many people pledge 10 per cent of their income to their church, and anything they give beyond that is not eligible for deduction. Possibly if the minister is not willing to consider that he might consider permitting a large donation to be spread over something like a five-year period, so those who are extremely generous in their donations would not be discriminated against. It seems to me unfair that someone who gives very little or often nothing is allowed a deduction of $100, whereas someone who is much more generous receives no exemption whatever for a certain portion of his donations.

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LIB

Daniel (Dan) McIvor

Liberal

Mr. Mclvor:

This does not touch the man who overgives every year.

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?

Mr. Paiterson@

I wonder if the minister could say just what consideration has been given to the matter of raising the exemption in this particular respect. I have urged for three years now that this exemption be raised to at least 20 per cent for the very reasons that have been given, that many feel their contribution to their own church should be a minimum of 10 per cent. Then there is nothing one can contribute to other worthy causes and still keep within the regulations. I think if you want to encourage generosity in regard to these different things, then the government should take into consideration raising the limit on deductions. Can the minister say whether consideration has been given to raising the exemption to 20 per cent or so?

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LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

Mr. Chairman, I have raised the 10 per cent to 20 per cent by the resolution before the house.

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SC

Alexander Bell Patterson

Social Credit

Mr. Patterson:

I do not think the minister has, because really it does not affect one who goes beyond that limit. If a person does not give anything he can deduct $100. If he gives 15 per cent of his income, then he can just deduct 10 per cent. It does not mean anything at all to a good many people.

Income Tax Act

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LIB

William Alfred Robinson (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The Chairman:

Is paragraph 2 completed? Paragraph 3.

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PC

John Borden Hamilton

Progressive Conservative

Mr. Hamilton (York West):

May I ask the

minister if any representations have been received by his department from professional workers or incorporated business people, asking for some consideration about averaging their incomes?

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LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

Not in my time, if I understand correctly the thought that an ordinary businessman, or in fact anyone who is a taxpayer, would be given the position of a farmer in the sense that there would be an averaging period for his income. I do not think anyone has recommended that, but I shall have to check on it.

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PC

John Borden Hamilton

Progressive Conservative

Mr. Hamilton (York West):

I know we have been moving to take care of special grievances of certain groups of people. We moved one step further to assist the medical profession in connection with deductions covering their expenses for attending conventions outside of Canada. This year I note that the minister has moved another step in connection with setting up retirement plans under which these people will be able to get some benefit. As a result they are in a much different position from the average wage earner who has a stipulated salary and knows pretty well in advance from year to year what he is going to receive.

I thought the department might consider, in all fairness, certain classes of people of that type, businessmen who are not incorporated and cannot take advantage of carrying forward losses, putting them in a position where a system of averaging their income might be arranged.

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LIB

William Alfred Robinson (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The Chairman:

Paragraph 3 completed; paragraph 4.

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PC

Alfred Johnson Brooks

Progressive Conservative

Mr. Brooks:

I should like to ask the

minister, in a case where-

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CCF

Thomas Speakman Barnett

Co-operative Commonwealth Federation (C.C.F.)

Mr. Barnett:

If I understand correctly, the hon. member for Royal is proceeding to discuss No. 4 and I had one question I should like to ask on No. 3 before it is passed.

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LIB

William Alfred Robinson (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The Chairman:

The hon. member for

Comcx-Alberni.

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April 4, 1957