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Bill C-38: A Great Budget for Charities and the Arts

Colleagues. It is with a great deal of pleasure that I rise today to discuss the ways in which our government is delivering for Canadians through Bill C-38.

I’d like to begin by highlighting the economic results so far.

Between July 2009 and May 2012, over 760,000 net new jobs have been created, 90 percent of which were full-time jobs — the result of the strongest job growth of all G-7 nations during the recovery.

While Canadians can be proud of their country’s economic performance, we recognize that the global recovery remains fragile.  Our Government certainly recognizes that the job isn’t done: there are still Canadians looking for work; and we need to continue to build the foundation for long-term success.

In short, Canada is not immune to the possibility of future global economic challenges. That is why we are staying focused on a plan to make Canada’s economy stronger for today and tomorrow, with prudent growth initiatives and responsible spending of taxpayer dollars.

We call that plan, delivered through Bill C-38, Economic Action Plan 2012.

The plan stays squarely focused on what matters most to Canadians and their families — jobs and economic growth.

Some of the key initiatives that are doing just that include:

  • renewing the Hiring Credit for Small Business, which directly supports hiring by the businesses at the heart of our economy;
  • continuing to expand free trade, to open markets and help create more jobs;
  • investing in education, to help make sure our workforce is ready to take advantage of the jobs of today and tomorrow;
  • protecting Canada’s fiscal strength by delivering services more efficiently, creating savings to balance the budget over the medium term; and
  • investing in innovation, to help bring the good, high-skilled jobs of tomorrow to Canada

These are just some of the ways our Conservative Government is keeping Canada’s economic recovery on track.

Our Government’s Economic Action Plan 2012, a plan for Jobs, Growth and Long-Term Prosperity, builds on Canada’s successes by implementing moderate restraint in government spending.

The majority of savings will come from eliminating waste in internal government operations.  By doing this, we will be able to stay on track to balance Canada’s budget over the medium term.

I’d like to be clear on two, very important, overall aspects of our plan.

The first is we are not raising taxes.  That’s a reckless idea that only the opposition parties like to advocate.

The second is we are not cutting transfers to seniors or other levels of government for health, education or social services.

I could easily go on and on about all of the fantastic benefits contained in Bill C-38. However, my time is limited and I do want to focus on two provisions that are near and dear to my heart.

But before I do, I wish to address misleading comments made by several colleagues across the aisle.

During debate on Bill C-38, they distorted the purpose of the Inquiry that I launched into the transparency and accountability of charities, and they blatantly misrepresented the one-sentence question that I posed during my interview on CBC’s As it Happens.

My question was simple – why was the United Church boycotting Israel.

Several members opposite have themselves questioned the behavior of the United Church. Is it not true that Senators Munson, Cowan, Baker and Hubley are signatories of a letter to the Moderator of the United Church of Canada registering concern that the quote “United Church will be considering a policy of boycott against the products of the Israeli settlements.” End of quote.

And is it not true that these Senators further urge the Moderator quote “to use her voice to speak out against these proposals.” End of quote.

Enough said. Now back to my train of thought. The first provision has to do with a lifelong passion: arts and culture.

Our Government recognizes that arts and culture is an important generator of jobs and growth.  In challenging economic times, Canada’s Economic Action Plan included investments in culture, such as periodicals and the audiovisual sector.

The Government also chose to increase funding for arts and culture during the global economic recession, providing economic stimulus through additional cultural infrastructure funding. This Government believes that supporting the arts is essential to supporting Canada’s economy and quality of life and will maintain strong support for Canadian culture.

Bill C-38 continues support for the arts by strengthening the Canada Travelling Exhibitions Indemnification Program, which helps Canadian museums and art galleries reduce their insurance costs when hosting major exhibitions. To achieve this, the Government intends to raise the indemnification limit from $1.5 billion to $3 billion. This increased support will be complemented by a change to the calculation period and an increase in the maximum level of support per exhibition, from $450 million to $600 million.

These important modernization initiatives will help art galleries and museums attract more internationally acclaimed treasures to Canada. Canadians are proud of their museums. Taken together, national and local museums in communities all across Canada are some of the best in the world.

In fact, our Government created two new national museums: the Canadian Museum of Immigration at Pier 21 in Halifax, and the Canadian Museum for Human Rights in Winnipeg. Canadians value museums, the stories they tell, the collections they house, and the role they play in preserving culture. Because of this, Bill C-38 maintains funding for Canada’s national museums.

While continuing to recognize the importance of cultural institutions to Canada’s social and cultural fabric, the Government is maintaining funding for the Canada Council for the Arts.

For over 50 years, the Canada Council for the Arts has been the leading supporter of Canadian artists. The Government has increased funding for the Canada Council to its highest funding level ever. Bill C-38 will maintain record support for the Council by providing cultural communities with funding stability.

Colleagues. Every one of us recognizes what a positive impact the change to the indemnification limit will have on Canada’s arts and culture sector. This is one of the provisions in Bill C-38 that received unanimous consent during clause-by-clause consideration by the Senate Standing Committee on National Finance.

My second point has to do with a lifelong commitment: charity.

The Government of Canada provides registered charities with generous assistance under the tax system in recognition of the valuable work that they perform.

Registered charities are exempt from tax on their income and may issue official donation receipts for gifts received. In turn, donors can use those receipts to reduce their taxes by claiming the Charitable Donations Tax Credit for individuals or Charitable Donations Tax Deduction for corporations.

In 2011, federal tax assistance for the charitable sector was approximately $2.9 billion. At the request of the Government, the other place is studying current and proposed incentives for charitable giving to ensure that the tax incentives are as effective as possible.

Canadians have shown that they are willing to donate generously to support charities, but want to be assured that charities are using their resources appropriately. In this regard, charities are required by law to operate exclusively for charitable purposes and to devote their resources exclusively to charitable activities.

Given their unique perspectives and expertise, it is broadly recognized that charities make a valuable contribution to the development of public policy in Canada. Accordingly, under the Income Tax Act, charities may devote a limited amount of their resources to non-partisan political activities that are related to their charitable purposes.

On February 28, 2012, I launched an Inquiry into the involvement of foreign foundations in Canada’s domestic affairs. During the course of that Inquiry concerns were raised that some charities may not be respecting the rules regarding political activities. There have also been calls for greater public transparency related to the political activities of charities, including the extent to which they may be funded by foreign sources.

The Canada Revenue Agency (CRA), as administrator of the tax system, is responsible for ensuring that charities follow the rules. Accordingly, to enhance charities’ compliance with the rules with respect to political activities, Bill C-38 proposes that the CRA:

  • Enhance its education and compliance activities with respect to political activities by charities; and
  •  Improve transparency by requiring charities to provide more information on their political activities, including the extent to which these are funded by foreign sources.

These administrative changes will cost $5 million in 2012–13 and $3 million in 2013–14.

This Bill also amends the Income Tax Act to restrict the extent to which charities may fund the political activities of other qualified donees, and to introduce new sanctions for charities that exceed the limits on political activities, or that fail to provide complete and accurate information in relation to any aspect of their annual return.

In an Angus Reid poll conducted mere days after the budget was tabled, 80 percent of those asked agreed with these clauses that would make charities more transparent and accountable.

So colleagues, our plan has won praise across the country.  For example, the Canadian Federation of Independent Business praised the extension of the Hiring Credit for Small Business.  “Extending this credit makes it easier for small businesses to support Canada’s economic recovery by creating jobs.”

The Association of Universities and Colleges of Canada expressed support for our plan to increase research and innovation, while the Council of Ontario Universities praised our commitment to university research.

Unfortunately, the same cannot be said of the opposition parties.

The Conservative Party stands alone. We aren’t getting help in passing legislation that’s essential to keeping our communities safe, or promoting job creation and economic growth. Quite the opposite.

The NDP, in particular, prefer obstruction and delay. They tried to block reasonable measures to put the rights of victims ahead of the rights of criminals.

They opposed responsible development of Canada’s natural resources, a key part of our economic success. They even go abroad on their very public, very vocal, very anti-jobs and anti-Canadian junkets. Very shameful!

From calls for a moratorium on oil sand development to attempts at pitting region against region, Thomas Mulcair and the NDP have become a major threat to Canada’s economy, to our job creation, and to our unity.

In fact, despite all their talk, the NDP even voted against our measures to support seniors – measures including Pension Income Splitting, increasing the Age Credit, even the GIS top-up.

Instead, the NDP advocates job-killing taxes and reckless, out-of-control spending. Their policies would threaten the recovery and damage our long-term fiscal strength by driving us deeper into deficit, just as we’re on track to balance the budget.

Our Conservative Government will keep working to overcome opposition obstruction and implement our low-tax plan to sustain economic growth and support Canadian families.

We are focused on what matters most:  jobs, growth and long-term prosperity.

Bill C-38 is delivering results. By international comparison, Canada is doing well and creating jobs. But there’s much to be done to help ensure our country stays on track. I am confident our Government’s plan is the right one for Canadians today, tomorrow, and from coast to coast to coast.

That is why I am proudly supporting Bill C-38 and encourage everyone in this Chamber to join me in voting to pass this important legislation.  Thank you.