May 2, 1985

NDP

Nelson Andrew Riis (N.D.P. Caucus Chair)

New Democratic Party

Mr. Riis:

My comments-

Topic:   GOVERNMENT ORDERS
Subtopic:   INVESTMENT CANADA ACT
Sub-subtopic:   MEASURE TO ENACT
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PC

Marcel Danis (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Progressive Conservative

Mr. Deputy Speaker:

Order, please.

Topic:   GOVERNMENT ORDERS
Subtopic:   INVESTMENT CANADA ACT
Sub-subtopic:   MEASURE TO ENACT
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PC

Patrick George Binns

Progressive Conservative

Mr. Binns:

Mr. Speaker, I rise on a point of order. If the Hon. Member would allow me as a government Member to speak before five o'clock, he would not have to worry about the point he has just made.

Topic:   GOVERNMENT ORDERS
Subtopic:   INVESTMENT CANADA ACT
Sub-subtopic:   MEASURE TO ENACT
Permalink
NDP

Nelson Andrew Riis (N.D.P. Caucus Chair)

New Democratic Party

Mr. Riis:

Mr. Speaker, unfortunately I heard what the Hon. Member said. I hope he does have an opportunity to share with us his views on this Bill. However, as he will know, the Government has virtually imposed closure on this Bill. The Government has decided that there will be no more debate on the most important piece of legislation to come before Parliament in this session. I do hope he does have an opportunity to speak.

I find it peculiar that although representatives of the NDP and the Liberal Party have stood in their places for the last number of days to pose questions, with the assumption that Hon. Members opposite would rise to attempt to answer those questions, we have heard virtually no response. One can only assume that government Members are unable to answer the questions that have been posed.

Let us deal with the fundamentals of this Bill. Since we in Canada have more foreign control over our economy than most nations of the world, why is it that Members opposite feel that the solution to our problem is to have even more foreign control over our economy? That is not a rhetorical question. It is a reasonable question to pose. I see that the Hon. Member for Okanagan-Similkameen (Mr. King) is present. I expect to hear from him in response to that question within the next two days as there are only two days left in which to debate this issue.

If a debate on foreign control of the economy were to take place in any other Parliament of the world, the place would be in a total uproar at all times. What other country of the world would tolerate a manufacturing sector that is 40 per cent owned and controlled by a foreign country? What other country of the world would tolerate for a moment having 80 per cent of its petrochemical industry owned and controlled by foreigners? No other country in the world would tolerate this; yet the Government says it wants even more foreign control without monitoring what it has monitored before.

The Government says that it does not want any reviews or notification. If sources from Saudi Arabia came to Canada to purchase huge tracts of land or sectors of rental accommodation, the Government would say that that is quite Fine. According to government Members, we do not want to be notified of or to have to review such takeovers. We assume that what any

May 2, 1985

Income Tax Act

foreign business does in Canada will be good for the Canadian economy and good for the people of Canada.

1 could stand here for days and days and list all sorts of very specific instances in which foreign business has not been in the best interest of the Canadian society. Foreign companies have not always behaved in a positive and productive manner in terms of Canada's interest. A number of foreign subsidiaries were operating in my constituency, but they closed down. They closed down not because they were not profitable, not because they were not performing the proper research and development, and not because they could not expand their operations. They closed down because their parent companies, in the United States or in Germany, decided that in their corporate interests, those businesses should be closed. That is not in the best interest of Canada.

Topic:   GOVERNMENT ORDERS
Subtopic:   INVESTMENT CANADA ACT
Sub-subtopic:   MEASURE TO ENACT
Permalink
PC

Marcel Danis (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Progressive Conservative

Mr. Deputy Speaker:

It being five o'clock, the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

Topic:   GOVERNMENT ORDERS
Subtopic:   INVESTMENT CANADA ACT
Sub-subtopic:   MEASURE TO ENACT
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PRIVATE MEMBERS' BUSINESS-MOTIONS

PC

Marcel Danis (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Progressive Conservative

Mr. Deputy Speaker:

Is there unanimous consent for the House to proceed to Item No. 174?

Topic:   PRIVATE MEMBERS' BUSINESS-MOTIONS
Permalink
?

Some Hon. Members:

Agreed.

Topic:   PRIVATE MEMBERS' BUSINESS-MOTIONS
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INCOME TAX ACT

PC

Léo Duguay (Deputy Whip of the Progressive Conservative Party)

Progressive Conservative

Mr. Leo Duguay (St. Boniface) moved:

That the Standing Committee on Finance, Trade and Economic Affairs be empowered to study and report on the advisability of amending the Income Tax Act to permit the registration of amateur sport bodies created under provincial statutes as amateur athletic associations in order that donations to them be treated in the same manner as donations to registered Canadian amateur athletic associations.

He said: Mr. Speaker, the motion I bring before the House today is very straightforward. It is, however, of great importance to amateur sport bodies created under provincial jurisdiction and, in particular, to the young athletes which those associations support. The purpose of the motion is to enable provincial sport organizations to raise funds within a province in a manner which is consistent with that which is already acceptable under the terms of the Act with respect to federal amateur athletic associations.

I would like to compare the national and provincial organizations, and to do so I will read into the record the objects of a provincial sports organization in Manitoba and compare it with the objects of a national sports oranization. One of the objectives of the provincial organization is:

To foster, through the provisions of funding, the development of national and international calibre athletes in Manitoba for all nationally recognized sports.

I would like to compare that with a national organization which has the objective of selecting and training members- and in this case it is the National Ski Team-to represent Canada in national and international competition.

The objective of the provincial organization is:

To assist in the development of proper coaching programs for Manitoba athletes.

The objective of the national organization is to:

Provide guidance, information and assistance to the divisions and zones of the association in respect of these objects and in the development of programs for competitive and non-competitive skiing.

The objective of the provincial organization is:

To promote sporting and recreational activities for all Manitobans.

The objective of the national organization is to:

Encourage support of its programs by the public generally.

I am trying to point out that provincial sport organizations, provincial amateur athletic organizations and their federal counterparts, try to support the same thing, that is, sports in general and young athletes in particular.

In order for the House to understand why I am suggesting that the Act should be amended, I will deal with the structure of the current Act. The current Act states that for the purpose of computing taxable income, a taxpayer may deduct amounts which are applicable under Paragraph 110.1(a), for example, charitable donations or the aggregate of gifts made by the taxpayer in the year to registered charities or to registered Canadian amateur athletic associations.

This Section clearly shows, Mr. Speaker, that registered Canadian amateur athletic associations are charitable organizations. The donations they receive are deductible for income tax purposes. This Section must be amended in order to include as well provincial amateur athletic associations. [English]

Certain questions come to mind. The basic question is: What is a registered Canadian amateur athletic association? The definition in the Act states that a registered Canadian amateur athletic association means an association that was created under any law in force in Canada, that is resident in Canada and that has, as its primary purpose and its primary function the promotion of amateur athletics in Canada on a nation-wide basis. Section 149 of the Act further defines amateur athletic association as non-profit associations.

The current Income Tax Act goes out of its way to define, for tax purposes, a registered Canadian amateur athletic association in order to permit it to issue tax receipts as a non-profit organization. The Act goes out of its way to ensure that

May 2, 1985

national associations operate on a nation-wide basis. However, as I have previously indicated, the objects of national associations and the objects of provincial associations are almost identical.

If we look at the regulations of the Act, we realize that the Act had to go out of its way to ensure that amateur athletic associations, which are regional in nature or provincial in nature, are excluded from giving tax receipts. To redress that discriminatory provision, the following amendments would have to be made. With these amendments, the Income Tax Act would read as follows:

Section 110(8)(b)

"Registered Canadian amateur athletic association" means an association that was created under any law in force in Canada, or any province of Canada, that is resident in Canada, and that

(i) is a person described in Paragraph 149(1 )(L)

(ii) has, as its primary purpose and its primary function, the promotion of

amateur athletics in Canada on a nation-wide or province-wide basis-

In those two amendments I have added the words "in Canada or any province in Canada" and "on a nation-wide or province-wide basis". Under paragraph 149( 1 )(L) non-profit organizations would be amended to read as follows:

-a club, society or association that, in the opinion of the Minister, was not a charity within the meaning assigned by Subsection 149( 1 )(L) and that was organized and operated exclusively for social welfare, civic improvement, pleasure or recreation or for any other purpose except profit, no part of the income of which was payable to, or was otherwise available for the personal benefit of, any proprietor, member or shareholder thereof unless the proprietor, member or shareholder was a club, society or association the primary purpose and function of which was the promotion of amateur athletics in Canada or in any province or Canada;-

The purpose of the amendments is to redress the discriminatory provisions which currently exist, which are designed exclusively to prohibit amateur athletic associations within a province from raising funds for deserving young athletes in their communities.

In 1983-84, the Government of Canada had a substantial involvement in amateur sport. From the Standing Committee on Public Accounts, I discovered that in 1983-84, fitness and amateur sport programs in Canada received contributions of over $29 million toward the administration and project costs of national sport governing bodies to assist in the promotion and development of amateur sport for Canadians. The total contribution of this Government to fitness and amateur sport was over $50 million.

The purpose of my motion, Mr. Speaker, is to try to suggest that the private sector has a role to play in the support of amateur sports associations in this country. If it were given the opportunity to support young athletes in the various regions, it would do so. Then, perhaps, we could consider over the long run having the Government of Canada withdraw its paternalistic support of sports and have the private sector contribute more on a local basis.

It is significant to note, Mr. Speaker, how much the federal Government is involved in supporting amateur sport. Hon Members should understand very clearly that I want our

Income Tax Act

Government to indicate its support in just as categorical a fashion as have previous Governments. Sports organizations in this country are deserving of our support, and it is essential that we give it to them. However, we have a responsibility to try to place the emphasis back on local direction, control and support of athletic associations. The motion which I am proposing would ask the Standing Committee on Finance, Trade and Economic Affairs to study those provisions and see if they can be included in the Act.

Mr. Speaker, I am proposing this motion today so that the Standing Committee on Finance, Trade and Economic Affairs can be empowered to study the advisability of amending the Income Tax Act. These amendments would allow donations to provincial athletic associations to be treated the same way as donations made to registered Canadian amateur athletic associations.

Raising funds for local athletes is a lot easier when one is not trying to get a local company to sponsor an athlete it does not know. It is very difficult for a national association to get local companies across the country to agree to give funds to support a national calibre athlete they do not know. In the Province of Manitoba, we have a large number of private companies which would very much like to contribute to the development of local athletes, but they are prohibited from doing so under current income tax legislation. It is my belief, Mr. Speaker, that if we made this change in the Act, we would encourage the private sector to do what it really wants to do in terms of helping young athletes in Canada.

With the 1988 Winter Olympics in Calgary quickly approaching, I think it is high time that we enabled provincial sports organizations to raise funds for the purpose of developing the national and international calibre athletes whom we would want to represent us in Calgary. We currently allow the Canadian amateur athletic associations to be registered, and it is my belief that we should allow the provincial groups as well to be registered.

On September 4, Canadians told us that they wanted to stand on their own two feet. These changes would give them the opportunity to support their own young athletes in the same way as they support national athletes. I think that provincial associations have indicated that they want to do more. The private sector has indicated that it wants to do more. This change would permit these organizations better to support young athletes in this country.

I think all of us share the view that it is certainly a desirable goal to promote young athletes. Therefore, I urge Hon. Members of this House to support this motion by referring the subject matter to committee for further study. We have asked to refer it to committee for further study because we know that the Income Tax Act is very complex and the implications of the changes I have read into the record are far reaching. However, we think the principle of allowing provincial sports organizations and the private sector to help in the funding of

May 2, 1985

Income Tax Act

young athletes is well worth the support of all Hon. Members, and I ask for that support.

Topic:   PRIVATE MEMBERS' BUSINESS-MOTIONS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   SUGGESTED AMENDMENT RESPECTING REGISTRATION OF PROVINCIAL AMATEUR SPORT ORGANIZATIONS
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PC

Claude Lanthier (Parliamentary Secretary to the Minister of Finance)

Progressive Conservative

Mr. Claude Lanthier (Parliamentary Secretary to Minister of Finance):

Mr. Speaker, I appreciate the opportunity to speak today to the motion put forward by the Hon. Member for St. Boniface (Mr. Duguay). Many provisions in the Income Tax Act should be underlined and examined from time to time. The suggestion contained in the motion under consideration gives us a welcome opportunity to take a closer look at the tax provisions with respect to tax-exempt donations to amateur sport bodies, or even to charitable organizations in general.

In this motion, the House is being asked not to judge on its merits the amendment proposed to the income tax provisions respecting amateur sport bodies established under provincial statutes, but indeed to refer the matter to the Standing Committee on Finance, Trade and Economic Affairs for study and report. We are in no way trying to prevent the matter from being referred to the Standing Committee. We do recognize, however, that it might be somewhat difficult for that Committee to add another subject-matter to an already heavy agenda. But it is always possible to set aside some time to look into the matter, and it will certainly be considered in a more thorough and thoughtful way than would be possible in just an hour's debate in the House.

I would like, however, in these few minutes to make a few considerations which I believe should be taken into account in reviewing that suggestion. I am afraid that the public is not very familiar with the present legal status of those amateur sport bodies, particularly with respect to the Income Tax Act. Although this confusion may be understandable generally speaking in relation to some parts of the Tax legislation, the Income Tax Act is fairly clear, simple and specific on the subject-matter of the motion under consideration by the House.

Under the Act, donations to registered Canadian sport bodies are tax exempt. Such associations are defined under Paragraph 110(8)(fe). It must be a non-profit body, also a body which, and I quote:

-has as its primary purpose and its primary function, the promotion of amateur athletics in Canada on a nation-wide basis.

Any sport body that meets those requirements may be registered quite easily with the Department of National Revenue, and may thereby receive tax-deductible donations.

As our colleagues will note, that definition in no way specifies that the sport body must have been set up under a provincial or federal statute. This means that a sports organization created under a provincial statute definitely can be registered, provided its purpose is to promote amateur athletics in Canada on a nation-wide basis.

The motion now before the House refers to the registration of amateur sport bodies created under provincial statute.

Under the current provisions of the Act, such organizations may in fact be registered and receive tax-exempt donations, provided the amateur sport body so created under provincial statute is active on a nation-wide basis. It does not have to be established under a federal statute.

What about amateur sport bodies created under provincial statutes that are only operating on a provincial or regional basis? Are they excluded outright by the current provisions of the Income Tax Act? Not at all. A registered Canadian amateur athletic association may, at will, use tax-exempt donations it receives to grant financial support to provincial amateur sport bodies. In fact, many of our amateur sport bodies are grouped under national federations, and this allows for such a circulation of funds. In the final analysis, the only general requirement that must be met by the organization receiving tax-exempt donations, is to operate on a national basis, directly or through a federation.

Another provision of the Income Tax Act also applies. Section 168(l)(f) provides that the Minister may revoke the registration of a registered Canadian amateur athletic association that accepts a gift or donation the granting of which was expressly or impliedly conditional upon the association making a gift or donation to another person, club, society or association.

The barring of conditional donations merely reflects the general spirit of the Act. For example, a provincial sport body could not launch a financing campaign under which donations would be made to a registered Canadian amateur athletics body if, mandatorily or because of some underlying agreement, all those donations should end up in the coffers of that provincial body. That kind of apparent loophole could allow getting easily around the obligation for a registered Canadian body to promote sports on a truly national basis.

To sum up, the Act quite explicitly allows a provincial amateur sport body, member of a Canadian sport federation, to receive from that federation funds obtained by way of tax-exempt donations.

After all, it should not be that difficult for our provincial amateur sport bodies to join a national sport federation. Since Canada is a political federation, such a federal approach should not be that unusual when it comes to Canadian sport bodies. That form of organization may require from those bodies that they be willing to make compromises of course to harmonize certain local aspirations with the national general interest, but that aspect is inherent in a federation such as ours, and should not be a problem for us Canadians, whether on the political or athletic level.

This is not the only area where under the Income Tax Act a federal organization which operates at the national level can

May 2, 1985

take advantage of a tax arrangement which is denied to its provincial counterpart. The tax credit which can be applied to donations made to political parties is another case in point. Our Canadian Parliament has already decided that this credit should be granted when a taxpayer makes a donation to a federal as opposed to a provincial political party. No doubt that one of the main reasons for this decision has been the understandable firm belief that the federal Treasury should only support federal parties and that any financial support given to provincial parties should come out of provincial Treasuries. Similarly, it could be argued that the same principle should apply to provincial organizations dealing with amateur sport. On the other hand, if we decide to exempt from tax donations made to provincial sport organizations, are we prepared to be consistent and to apply the tax credit granted to federal political parties to donations made to provincial political parties, whether or not they believe in federalism?

1 would like to deal now with a more general matter which might be implied in the motion of the Hon. Member for St. Boniface (Mr. Duguay) although not clearly stated. This question is as follows: Under the Income Tax Act should direct donations to provincial amateur sport organizations be tax exempted? If so, the National Revenue Minister (Mr. Beatty) should allow these organizations to be registered, even if they only operate at the provincial level.

I would humbly suggest that, looking at it that way, we will soon discover that the questions become more difficult and the answers much less obvious. What factors would have to be considered? The increase in the costs to the federal Treasury is certainly one of them. It is impossible at least for the time being to fix an exact figure on the costs involved. Obviously, there would be a major increase in the number of sport organizations collecting funds from the public thus accepting tax exempt donations. The cost of this tax arrangement would increase significantly. Hon. Members will no doubt wonder if it would be justified to let the federal deficit grow bigger when the cost of our public debt is already too high.

The Hon. Members will also surely want to examine if indeed there are provincial athletic organizations with urgent financial needs that warrant such a measure and should take precedence over other equally justified applications for funds made to the federal treasury. It is not necessary to list those applications here. We hear about them every day. Considering the substantial federal deficit, we have to set priorities since obviously the federal Government cannot hope to respond favorably to all applications for financial assistance however deserving they may be.

In that context, it would perhaps be relevant to consider also to what extent provincial amateur sport organizations take advantage of those large lotteries under the sponsorship of the provincial governments.

I think that the Committee on Finance, Trade and Economic Affairs could also consider in what way the proposed

Income Tax Act

amendment would fit in the comprehensive federal policy on assistance to amateur sport. Such an aspect of the issue goes beyond tax policy considerations since the amendment advocated would unavoidably influence the organization and general financing of sport in Canada. In the context of a review of that extensive issue it could be useful to study the present Income Tax Act and the general direction taken in that regard.

One of the important elements coming out of a study of the relevant clauses of the Income Tax Act is that such a legislation makes a clear distinction between registered Canadian of amateur sport associations and charitable organizations. The gifts made to one or another of those organizations could obviously be tax free, but it is equally obvious that the tax legislation does not consider amateur sport associations as charitable organizations.

The Income Tax Act defines the words "Registered Canadian Amateur Sport Association", but does not indicate what is a charitable organization, a charitable activity or a charitable goal. Generally speaking, the legal position in that regard has been to use the Common Law definition, that is an organization that tries to relieve poverty, to propagate a religion, to promote education or something else for the good of the community. Legislators seem to have tried to apply to charitable organizations criteria allowing them to receive tax-free donations, but they made sure local and provincial sport organizations would not fit in that category; The same distinction is to be found in the Income Tax Act regarding the specific definition of activities for which a registered charitable organization is allowed to spend money. One of these goals is to help "recognized donors" which include registered Canadian amateur sport associations. However, a provincial athletic organization which cannot be registered under the Income Tax Act cannot get any type of financial assistance from a charitable organization. Therefore, the legislation makes a clear distinction between charitable organizations and amateur sport associations dealing only at the local or provincial level.

The most important possible reason for this distinction may be that charitable organizations usually work for other people while most amateur sport organizations take care only of their members.

We know that each year Revenue Canada receives some 3,500 registration requests from organizations wishing that donations given to them be tax-free. Approximately 10 per cent of these requests are turned down and these come mainly from organizations which are not really charitable organizations, but whose goal is rather to promote the direct or indirect interests of their own members. Of course, that does not mean such a goal is unacceptable. I hope however that Hon. Members will want to make sure these organizations have good reasons for claiming the tax status given to charitable organizations.

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Income Tax Act

To conclude, we would like to thank the Hon. Member for St. Boniface for raising this matter in the House and suggesting it should be studied further by the Standing Committee. I hope my remarks helped Hon. Members to understand some financial matters which the Committee could study with the other points raised more directly by the Member for St. Boniface.

Topic:   PRIVATE MEMBERS' BUSINESS-MOTIONS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   SUGGESTED AMENDMENT RESPECTING REGISTRATION OF PROVINCIAL AMATEUR SPORT ORGANIZATIONS
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LIB

Jean-Claude Malépart

Liberal

Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):

Mr. Speaker, I wish to commend the Hon. Member for St. Boniface for introducing this motion, for considering this most important issue which I feel is all the more important since I heard the Parliamentary Secretary so beautifully read out the well-written speech that was prepared by the people in the Department.

Mr. Speaker, I am shocked whenever I heard someone make a distinction between charitable organizations and sport organizations that look after their members-

Mr. Speaker, it is most outrageous. I have had the experience of a similar case. A baseball organization in my riding was asking for leave to issue receipts for charitable donations for the purpose of helping young people practice their favorite sport not so they would train to play some day for the Expos, but to stop juvenile delinquency and prevent youngsters from hanging around on the streets. The reply I received from the Department read just like the one the Hon. Member mentioned in his speech. Is it not a charitable purpose for an organization to look after its members? I commend the Hon. Member for St. Boniface because Members will have to express in that committee the wishes of the population they represent. The old legislation still applies.

How was charity defined fifty or sixty years ago? Things have changed since that time. We all have in our ridings athletic, recreational and social organizations at the provincial as well as the local level. The Parliamentary Secretary should tear up the speech he has just read and throw all the pieces back at the public servant who wrote it. We do not want any more replies of that kind. No more! Tenants' associations in Montreal and Quebec City were refused a registration number that would have allowed them to issue receipts for charitable donations. The United Appeal in Montreal refuses to grant them money because those associations are not registered as charitable organizations with the federal Government, Mr. Speaker.

Tenants' associations defend those people that are least organized, and then the Minister of Finance comes around and tells us that they are not charitable organizations. But what do you do when you help people? Is that not charity?

I think it is important that this committee . . . And I congratulate the Hon. Member for St. Boniface, but the Hon. Member for LaSalle (Mr. Lanthier) gets no praise for having read his text, for having stuck to what the public servant told

him to say. He must be reminded, as every members in this House, that he has been elected to say what must be done, not to read what public servants tell him to say. In that area, it is very important for all the young of this country, and not only for the organizations at the national level, not only for sport organizations, recreational organizations, cultural organizations, community organizations throughout this country, at the local level, in every village, in every city, in every parish, that they be entitled to some benefit when they try to raise funds.

If we did not have in Canada those thousands and thousands of unpaid family men and women to work in all those organizations, what would happen? The government could never pay the cost for all that manpower, all the quality and all the dedication of those people. It would cost a fortune. Compare that with the parliamentary secretary's answer which was prepared by officials in the Department. It is totally unacceptable to tell those people: Sacrifice yourself, spend your money to help the youth, to help senior citizens, to help tenants, to help needy people. Sacrifice yourself, spend money from your own pocket. But don't come to us asking to be entitled to issue tax receipts as a registered charitable organization for your fund raising campaigns. We, the federal government, deal with big concerns. We, the federal government, are above all that; $56 millions to change the colour of soldiers' uniforms, that's our business. That's no way to talk to citizens. The Hon. Member for St. Boniface knows them, he knows the local organizations at home, as evidenced by what he is asking for, Mr. Speaker. And I will have to go around with the Hon. Member for LaSalle to remind him that there are in his constituency organizations which need that help to finance themselves.

Mr. Speaker, the Minister of Finance is going ... the Parliamentary Secretary or aspiring Minister of Finance is going to try to defend us. Here, we agree; there are hundreds of people who earn $100,000 and who manage not to pay a penny in taxes. No problem. This is money not received by the government. No problem. There are tax havens for the better off people, and it costs $18 billion to Canadian taxpayers. No problem. But the previous speaker was a Conservative member, not a Liberal, not a member of the NDP, an Hon. Member from the same party as the Hon. Member for LaSalle. We should figure out the costs. How much is it going to cost to give a mere $500 for organizations? They are poor. So who cares? The Conservative government is not interested. No. When multinational companies come here they are greeted with open arms, with champagne; the door is wide open. That is what is called class. No, Mr. Speaker, I congratulate the Hon. Member for St. Boniface. I know that in each of our constituencies, and I am convinced that every Hon. Member is going to hear about it when they go back to their constituencies over the weekend because I am going to make sure that all

May 2, 1985

sport and recreactional organizations remember that their Member of Parliament said: No, we are not going to study that. You do not need financing. Manage on your own. No, Mr. Speaker. Those organizations play a very important role in Canada, and I think it is very important not only that the committee examine that matter in order to give the same privileges to sport organizations at the provincial level but that we also consider sport, recreational, cultural, social organizations at the local level, Mr. Speaker.

When I see this government, the Prime Minister (Mr. Mulroney), the Minister of Finance (Mr. Wilson), the Minister of "social injustice", the Minister of National Health and Welfare (Mr. Epp) in Canada, supported by the Parliamentary Secretary, the Hon. Member for LaSalle (Mr. Lanthier), I ask the question: Do the Canadian people want to go on paying for tax benefits, tax havens which cost billions of dollars and which benefit the rich? That is the question. Can we go on like this, Mr. Speaker?

In conclusion, I wish to congratulate the Hon. Member for St. Boniface (Mr. Duguay). He can count on the support of Liberal Members against people like the Parliamentary Secretary and the Hon. Member for LaSalle who, without stating his opposition, has eloquently read the speech prepared by a public servant. I look forward to hear a speech of his own some time, stating what he really thinks, and to study the matter and to help all these organizations, all these voluntary people, because they play an important role for our youth, for older people, for people in the cultural area. I think it is very important to agree to the motion before us, Mr. Speaker.

Topic:   PRIVATE MEMBERS' BUSINESS-MOTIONS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   SUGGESTED AMENDMENT RESPECTING REGISTRATION OF PROVINCIAL AMATEUR SPORT ORGANIZATIONS
Permalink
NDP

Nelson Andrew Riis (N.D.P. Caucus Chair)

New Democratic Party

Mr. Nelson A. Riis (Kamloops-Shuswap):

Mr. Speaker, that is quite an act to follow. I congratulate my hon. colleague, the Member for Montreal-Sainte-Marie (Mr. Malepart). I also want to congratulate the Member for St. Boniface (Mr. Duguay) on bringing forward a motion that is long overdue. Sports and athletic organizations play an important role in the communities, small towns and rural areas of Canada.

There is usually no assistance from the federal Government for these groups. People in the communities should be encouraged to support these very worth-while organizations, whether in amateur hockey, soccer, baseball, fastball, gymnastics or riding schools. These organizations provide a legitimate outlet for people who are genuinely interested in pursuing some form of sports or athletic activity. An incentive could be provided through the tax system by identifying these organizations as legitimate charities to enable donors to receive a tax benefit. There is no one in the House who would say that these organizations do not provide good work in their communities.

I am concerned that once this motion passes through the House and is referred to the Standing Committee on Finance, Trade and Economic Affairs, that will be it. From what I have heard in the few short minutes during which we have debated this motion, I can say that government Members will vote against this Bill because we cannot afford it. They will say that we cannot afford the few millions of dollars that it will cost the

Income Tax Act

federal coffers to assist thousands of small communities of Canada to build up their amateur sports organizations. I can hear them saying it now, Mr. Speaker. If that is not the case, I will eat this paper on my desk when the motion returns to the House in the form of a Bill. That is a promise. I just cannot believe that Members opposite will volunteer to spend additional money.

I phoned the Department of Finance today and asked what they thought of this motion. They said that they have some concerns because of the tax expenditure aspect of it. They said that since we have a big deficit in the country we cannot afford these things, but that they would look at it.

Topic:   PRIVATE MEMBERS' BUSINESS-MOTIONS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   SUGGESTED AMENDMENT RESPECTING REGISTRATION OF PROVINCIAL AMATEUR SPORT ORGANIZATIONS
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PC

Gerald J. Comeau

Progressive Conservative

Mr. Comeau:

Who did you talk to?

Topic:   PRIVATE MEMBERS' BUSINESS-MOTIONS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   SUGGESTED AMENDMENT RESPECTING REGISTRATION OF PROVINCIAL AMATEUR SPORT ORGANIZATIONS
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NDP

Nelson Andrew Riis (N.D.P. Caucus Chair)

New Democratic Party

Mr. Riis:

I talked to officials in the Department of Finance, to respond to the Hon. Member.

However, there has been no discussion about the fact that the Government falls all over itself trying to raise a few tens of millions of dollars to help out a bank when it gets into trouble. Also, it can find a few million dollars overnight in order to help a trust company.

What about a corporation like Domtar? That is a profitable organization but it wants a few tens of millions of dollars. Yet the Minister of Regional Industrial Expansion (Mr. Stevens) can find that amount of money overnight for a corporation that is not in financial difficulty. I could go on and on with more examples.

Corporate tax expenditures alone cost the taxpayers of Canada in excess of $18 billion. When we talk about corporate tax expenditures in this country, we are not talking about small or medium businesses, because 80 per cent of the $18 billion goes to 1 per cent of the companies in Canada. We know that those companies are ones like the Bank of Montreal and Imperial Oil. My hon. friend, the Member for Montreal-Sainte-Marie, has already indicated that although many banks make hundreds of millions of dollars in some years, they pay no tax. Individuals who earn in the vicinity of $500,000 a year pay no tax. However, Hon. Members opposite say that we cannot afford to provide assistance to the small athletic organizations in our communities. They say that we cannot afford to provide assistance to small business in the country.

However, let us look at the reality of our corporate tax expenditures. The businesses that often support athletic organizations in our communities are almost inevitably the corner stores and small plants in our towns. They are the ones that come up with the $100 donations and sponsor the Little Leaguers with their baseball uniforms. The multi-nationals cannot afford it because they must balance their balance sheets on a quarterly basis. Essentially, the small business sector is being penalized by our corporate tax expenditure system. When these organizations request support, I suspect that the Government says that it cannot afford to provide assistance.

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May 2, 1985

Income Tax Act

I want to congratulate the Hon. Member for St. Boniface. I believe this particular motion is long overdue because it identifies a critical component of Canadian society-the sporting and athletic component-which provides our young people with an outlet for their energies and creative talents through participating in competitive or non-competitive sports. Competitive and non-competitive sports could include amateur hockey or baseball as opposed to gymnastics.

This motion provides parliamentarians with an opportunity to assist this vital sector of our society. As the representative of the New Democratic Party, I look forward to our discussions in committee as we find a way of enacting this motion into legislative form. I guarantee that the NDP will support this motion at every stage of its evolution.

Topic:   PRIVATE MEMBERS' BUSINESS-MOTIONS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   SUGGESTED AMENDMENT RESPECTING REGISTRATION OF PROVINCIAL AMATEUR SPORT ORGANIZATIONS
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PC

Brian White

Progressive Conservative

Mr. Brian White (Dauphin-Swan River):

Mr. Speaker, 1 also take pleasure in rising in the House today to lend my support to Motion No. 174, moved by my friend and colleague from Manitoba, the Hon. Member for St. Boniface (Mr. Duguay).

The purpose of this motion is to enable provincial sports organizations to raise funds for purposes of developing national and international calibre athletes within the province. This could be done in a manner which is consistent with that which is already acceptable under the terms of the Income Tax Act with respect to federal amateur athletic organizations.

As my friend from St. Boniface has mentioned, the portion of the Act in question is Section 110(1 )(a) dealing with charitable donations.

At present, sports activities are not deemed to be charitable in nature and thus, a non-profit sports organization cannot register as a Canadian charitable organization for income tax purposes. Any qualifying organization, in accordance with the Act, must have, as its primary purpose and function, the promotion of amateur athletics on a nation-wide basis. According to paragraph (a), an organization which purports to operate for the improvement and development of sport must qualify as a Canadian amateur athletic association in order to be eligible for registration and therefore to be able to issue tax receipts to donors.

A Canadian amateur athletic association by definition includes federal associations but does not include their provincial counterparts.

If the legislation could be amended, as it would be following the recommendation under Motion 174, it would make it such that provincial associations would be eligible to issue tax receipts for donations received. 1 think everyone would agree that if such provincial amateur sports organizations could issue tax receipts, then funding for them would increase substantially. In other words, even though the amendments recommended today are quite simple and straightforward, the impact on provincial and local sports associations would be tremendously positive.

Amateur sport at the local level has played a very large role in my life as it has in the life of my colleague from St. Boniface. My involvement as a participant as well as the many

years that I have spent coaching at various levels have shown me how important sports activities and associations are to young athletes, particularly activities and associations at the provincial and the local level.

The very existence of Section 110( 1 )(a) of the Income Tax Act shows that the lawmakers of Canada also believe in the development of amateur sport and in its importance to our country's people.

We must begin building a solid base in this country for sport, one that is accessible to all Canadians, not just a select few. In order for an amateur athlete to benefit from the present legislation-and the benefits are quite real-he or she must reside in a major populated area of our country. In other words, a dedicated, talented amateur athlete from my riding of Dauphin-Swan River in west central Manitoba is at a disadvantage right from the start. He or she does not have access to the funding and thus does not have access to the facilities and training that this money can buy. There are athletes who succeed in overcoming the barriers, but they have to be enormously gifted young people. Still, the question remains: How many others, given the opportunity, could have enriched their lives through amateur sport?

I am speaking about a very fundamental principle of Canadian life. I want my children and my neighbour's children to have and to enjoy the same opportunities as does another person who happens to come from a certain part of the country that is more heavily populated. I believe that the development of our young athletes can be quite successful at the provincial and local level as well as at the national level.

The creation of a sound provincial and local sports structure encourages all Canadians to participate and to compete. This infrastructure will not only provide an opportunity for all amateur athletes to partake in healthy sporting activities but will also create a sports pool of athletes from which our future sports stars will rise. This is our Government's interpretation of what a sports pool should be. It is not a gambling sports pool lottery but the creation of a pool of athletes.

The people of Canada must work together at the community level to develop amateur sports. It must be a community resource. It must become a community adventure. The amateur sports enthusiasts want a strong structural base for sports for all the people of Canada.

At present, funds are being spent to develop a select few athletes in the hope that they will become international sports stars. I am holding the 1983-84 annual report of Fitness and Amateur Sport of Canada. Let me illustrate some examples by reading from the summary of contributions in the annual report. In that year, for instance, the Canadian Amateur Basketall Association received over $880,000; the Canadian Amateur Diving Association received just under $400,000; the Canadian Amateur Football Association received close to $225,000; the Canadian Amateur Rowing Association received $653,000; the Canadian Amateur Speedskating Association received $575,000; the Canadian Amateur Swimming Association received over $1,100,000; the Canadian Association of Sports Sciences received $115,000; the Canadian Council for

May 2, 1985

Children and Youth received $17,000; the Canadian Curling Association, a sport with which I am familiar myself, received close to $75,000; and the Canadian Field Hockey Council received $45,000. These are amounts which associations at the provincial or local level would be more than happy to receive to form that base and pool of athletes of which I spoke. The Canadian Gymnastics Federation received over $750,000; the Canadian Institute of Child Health received $64,000; the Canadian Ladies' Curling Association received $107,000; the Canadian Old Timers' Hockey Association received $65,900; the Canadian Racquetball Association received $140,000; the Canadian Ski Association received $103,000; and the Alpine Skiing Division of the Canadian Ski Association received $1,161,000.

I would like to mention just a few more examples, Mr. Speaker. The Canadian Volleyball Association received $653,000; the Canadian Women's Field Hockey Association received $421,000; Curl Canada received $93,000; Lawn Bowls Canada received $92,000; the National Karate Association received $64,000; the National Sport and Recreation Centre Incorporated received $4,300,000; Participaction received over $1.5 million; and the Royal Canadian Golf Association received $55,000. The list goes on and on.

As you noticed from the list, Mr. Speaker, these are all Canadian federal associations. None of this money is being spent at the local and provincial level to develop our athletes and create that solid base that can make Canada a truly international force in amateur sport.

As I mentioned, virtually nothing is being invested at the local level for our local amateur athletes. If we can work toward establishing a strong and solid sport base in Canada, the huge amounts of money that I mentioned earlier need not be spent only on a select few. A wide national sports base will make it such that the cream will naturally flow to the top.

I have to say also that my hon. friend, the Hon. Member for St. Boniface, has been much too modest in his remarks today. He has played a very strong role himself in the development of amateur sport in our great province of Manitoba. It is because of dedicated people like my hon. friend from St. Boniface and the thousands upon thousands of others who dedicate much of their lives to the service of local sports organizations, both provincially and at the local community level, that the federal Government must support and encourage the development of a better structure. I believe that a better structure would flow from Motion No. 174 brought forward by my colleague and friend from St. Boniface, Manitoba.

In order to develop this structure for sport, Parliament must put in place the machinery which would allow provincial sports organizations to raise the money more easily.

As is presently the case with federal amateur athletic associations, provincial sports organizations should likewise be eligible for registration numbers. It only seems logical to me that they, like their federal counterparts, should be eligible to issue tax receipts with respect to donations received. This is

Adjournment Debate

why I urge this House to refer this matter to the Standing Committee on Finance, Trade and Economic Affairs for fur-' ther study.

Topic:   PRIVATE MEMBERS' BUSINESS-MOTIONS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   SUGGESTED AMENDMENT RESPECTING REGISTRATION OF PROVINCIAL AMATEUR SPORT ORGANIZATIONS
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PC

Marcel Danis (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Progressive Conservative

Mr. Deputy Speaker:

Is it the pleasure of the House to adopt the motion?

Topic:   PRIVATE MEMBERS' BUSINESS-MOTIONS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   SUGGESTED AMENDMENT RESPECTING REGISTRATION OF PROVINCIAL AMATEUR SPORT ORGANIZATIONS
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?

Some Hon. Members:

Agreed.

Motion (Mr. Duguay) agreed to.

Topic:   PRIVATE MEMBERS' BUSINESS-MOTIONS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   SUGGESTED AMENDMENT RESPECTING REGISTRATION OF PROVINCIAL AMATEUR SPORT ORGANIZATIONS
Permalink
PC

Marcel Danis (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Progressive Conservative

Mr. Deputy Speaker:

Is there unanimous consent to call it six o'clock?

Topic:   PRIVATE MEMBERS' BUSINESS-MOTIONS
Subtopic:   INCOME TAX ACT
Sub-subtopic:   SUGGESTED AMENDMENT RESPECTING REGISTRATION OF PROVINCIAL AMATEUR SPORT ORGANIZATIONS
Permalink

May 2, 1985