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Motion to Authorize Committee to Study Tax Consequences of Various Public and Private Advocacy Activities Undertaken by Charitable and Non-charitable Entities Negatived

Motion to Authorize Committee to Study Tax Consequences of Various Public and Private Advocacy Activities Undertaken by Charitable and Non-charitable Entities Negatived

Motion to Authorize Committee to Study Tax Consequences of Various Public and Private Advocacy Activities Undertaken by Charitable and Non-charitable Entities Negatived

Published on 4 December 2012
Hansard and Statements by Senator James Cowan (retired)

Hon. James S. Cowan (Leader of the Opposition):

If there are other senators who wish to speak, I would invite them to do so. Otherwise, I will have just a few words to say in conclusion of the debate before the vote.

I will not detain honourable senators long. I want to say a few words in response to the address by Senator Eaton, which we have been waiting for for some time now.

I want to just make it clear to honourable senators what seems to me to be obvious, that there is a great distinction between an inquiry and a study. We all use these inquiries, and they are a useful tool for us in the Senate. We can draw the attention of the Senate to an issue, as Senator Eaton did when she drew the attention of the Senate to what she described as an abuse of the Canadian tax system by foreign foundations. She and a number of her colleagues spoke about that, and some of us on this side spoke and asked questions as well.

It was a useful debate, but it is a debate. It is a debate amongst 105 senators. No one else has an opportunity to participate in it. No one has an opportunity to express a view, to defend himself or herself, to come forward with evidence. When you or I speak on an inquiry, it is the expression of an opinion of an individual senator, and it is an opinion that is expressed within the confines of Parliament with the protection of parliamentary immunity.

A study is a very different thing. A study gives witnesses an opportunity to come and be heard, and experts to be called and give testimony under oath either in defence of or contrary to a position. I think there is a clear distinction. Senator Eaton suggested that at least part of the proposed reference to our National Finance Committee has already been dealt with by an inquiry that she launched, and she referred to a number of her colleagues who spoke on the issue — she did not refer to any of the rest of us who spoke on that particular inquiry. However, those contributions, valid as they were, were simply expressions of opinion by individual senators. They were not evidence, and none of the entities that were referred to in the interventions by any senator were ever given an opportunity to be heard.

The reason for this motion of mine was to give the entities that were referred to in Senator Eaton’s inquiry and others that were referred to by colleagues opposite, and some referred to by colleagues on this side, an opportunity to be heard on that issue. Is there in fact a problem with our charitable regime where charities do not know where the line is between what they are permitted to do and legitimate public advocacy on matters of public concern? Is that a real problem, or is it another instance of an artificial problem being created and floated out there and then a government coming in and saying, ‘Now that this problem has been identified, we have the solution to that problem’?

While we are looking at that, as I said in my response to Senator Eaton when she spoke, I was not aware that this was a problem, but if it is a problem we should look at it and it should be fixed. That was the reason for the first part.

As far as I could determine, if an international foundation transfers money to a Canadian foundation which uses that money in accordance with the permitted activity of the Canadian foundation, it has absolutely no impact on the Canadian tax system. There are no tax receipts issued; there is no impact. Senator Day made that point early on. He said that he did not understand it and asked for an explanation. The response was that it was a technical issue. Well, that is the very kind of technical issue that ought to be reviewed and considered by committee.

I could not see that the particular focus of Senator Eaton’s inquiry had anything to do with the operation of our income tax system. However, I thought that if it did, in fairness and to be complete, we should also look at what will or does have an impact on our income tax system, and that is the perfectly legitimate use of the money of Canadian corporations to hire lobbyists and other persons and firms to assist them in lobbying for or against legislation in this country. They deduct that, as they are perfectly entitled to do. I thought that, in fairness, if you are going to look at one thing you should look at the other.

I also thought it would be appropriate to look at educational institutions. Many of us in this chamber have or have had long-standing affiliations with universities. We brag about the money that is attracted to Canada by those institutions. In my experience and judgment there is nothing wrong with that. That is something not to be criticized but rather to be celebrated.

In an unpaid political announcement for another inquiry, I hope that in the course of the inquiry in which Senator Segal and I will be participating other honourable senators will take the opportunity to talk to universities in their area and tell us what they learn so that we can celebrate the successes of those institutions. Part of the success is due to their ability to attract international funding. That international funding comes, in my judgment, because excellent research is being done by Canadian institutions.

I think that is perfectly legitimate. If there is something wrong with what is taking place, we should look at it, and the place to look at it, in my judgment, is our National Finance Committee. It was for that reason that I have made this motion. I am disappointed that Senator Eaton finds herself unable to support it, but I hope that other of her colleagues will join us on this side in support of this motion.

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