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NDP MP proposes tax credit for volunteers

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How much would you compensate a volunteer for his or her work and/or time?

Should volunteerism be remunerated to reward the activity and, in theory, motivate others to give of their time and skills to worthy causes?

These and other related questions are being bandied about again as a private member’s bill, Bill C-399: The Volunteer Tax Credit, makes its way through the reading process in the House of Commons.

The bill, introduced by rookie NDP MP for Répentigny Jean-Francois Larose in February, recently made it to second reading in the House on Sept. 25.

At that time the debate over its merits heated up, with Larose making an impassioned speech about the need for such legislation while his parliamentary colleagues from the Conservative party figuratively tore the bill apart and some Liberal members of parliament agreed to support the bill at least long enough to have it reviewed by the Standing Committee on Finance.

According to the official summary of the bill it is intended to amend the Income Tax Act “to provide a tax credit of a minimum of $500 and a maximum of $1,500, in respect of travel expenses, to individuals who perform a minimum of 130 hours of eligible volunteer services and make at least 12 trips in order to do so during the taxation year.”

Larose, in defending his bill in the House on Sept. 25, said “every day, we give [volunteers] a pat on the back, say congratulations and tell them we are glad they are there, but we never talk about serious measures for their future.”

He said that while the government implements more austerity measures to help the economy, the contributions of volunteers and the philanthropically minded aren’t getting the attention that they deserve. Larose also estimated that his bill would cost the government around $800 million over five years if every eligible volunteer claimed the tax credit. He did not say how that number was reached.

Larose did admit that the bill likely could use more tweaking and was happy it was being referred to committee for more discussion.

Conservative reaction to the bill focused on Larose’s cost estimates and leveled criticism of political naiveté at the NDP Member of Parliament.

“It will be the charities, churches, youth groups, et cetera that will be responsible for documenting the information that will be needed by volunteers and the Canada Revenue Agency to confirm that individuals qualify for the credit under the Income Tax Act,” said Dave Van Kesteren, MP for Chatham-Kent-Essex. He added: “This means that for each volunteer, these organizations would have to track and record how many hours people are present, what they are doing and if they travelled to the location. Simply put, this sounds like a huge waste of time and effort for these organizations. Not only would this be a drain on their human and financial resources, but it would take away from the ultimate goal of charitable and nonprofit organizations, helping people.”

A major nonprofit agrees, though not as specifically.

Volunteering, we will go

Larose has stated that Bill C-399 was drafted with the help of “a great many parties” though the one major organization not consulted on the bill was the country’s preeminent think-tank that focuses specifically on this subject: Volunteer Canada.

Ruth MacKenzie, president and CEO of Volunteer Canada, told CharityVillage that Larose had never been in contact with her organization. Queries to Larose’s offices for comment and more details were not returned to CharityVillage by deadline.

“Our thoughts on this bill are in line with our general thoughts on the broader issue of tax incentives for volunteering – that it would not be something we’d support,” McKenzie said. “The lack of data to suggest that [a tax incentive] would increase volunteerism” makes her hesitate to support any such bill.

“The government is raising issues about [Bill C-399] that suggest there is a lot unknown about’’ the impact of the bill, she said. “Our position would be that, yeah, there is a lot unknown about tax incentives and how you apply them in the context of a huge voluntary sector is really broad.”

MacKenzie noted that in the past her organization has consulted with various groups, the finance committee and parliamentarians on “issues around tax incentives” and said it’s possible that Larose had read up on statements that she’d made on the issue.

“But no one had directly consulted with me or Volunteer Canada” about Bill C-399, she noted.

While there isn’t anything specific in the bill that her organization would support, MacKenzie said there is a silver lining to the discussion around the document.

“I really like that volunteerism is getting attention. That’s the one thing I do like about these kinds of bills coming up. It’s an opportunity to raise the issue and have conversations around volunteering in [parliament],” she said. “But in terms of tax incentives...I think it’s really great that there’s recognition that there are financial implications to volunteering and in some instances there may be financial barriers to volunteering for some people. In the Canadian Survey of Giving, Volunteering and Participating (CSGVP) we see that volunteering is done mostly by the more educated and people who have a higher income, which gives the inference that volunteering is a thing of privilege and is not something that people on the lower end of the socio-economic scale can indulge in, for lack of a better term.”

MacKenzie pointed out that Canadians contribute about 2.2 billion hours of volunteer time annually.

“Attempts to ingrain volunteerism within federal policy is a great recognition that volunteerism is really important. But I don’t think tax incentives are necessarily the way to encourage it. More importantly, I don’t think it’s going to increase the quality of the contribution volunteers make or the degree organizations benefit from volunteer engagement,” she said.

Policies around building capacity for nonprofits or charities to do a better job at engaging volunteers would be more productive, Mackenzie said.

PBO says NSF

At the request of the Standing Committee on Finance, the Parliamentary Budget Office (PBO) produced a report on what financial impact the bill could have according to its research.

The PBO’s Federal Cost Estimate of Bill C-399: Volunteer Tax Credit estimates the bill could cost the government anywhere from $800 million to $2.2 billion over the first five years of implementation.

The report extrapolated much of its estimates from the 2010 CSGVP, which showed that close to 13 million Canadians volunteer yearly, or about 46% of the country’s adult population over the age of 15.

Yea or nay?

The bill is now being debated by the standing committee on finance.

Where do you stand? Does it make sense for taxpayers to pay for volunteerism or does volunteerism itself imply an altruistic, non-monetary activity that needs no material reward?

Andy Levy-Ajzenkopf is president of WordLaunch professional writing services in Toronto. He can be reached at andy@wordlaunch.com.

Photos (from top) via iStockphoto. All photos used with permission.

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mark@blumbergs.ca mark@blumbergs.ca
Andy thanks for the article. I agree with Volunteer Canada that although volunteering is really important a focus on capacity building rather than tax incentives would be a more beneficial. We seem to be fixated in Canada on tax incentives - and ignoring many more useful ideas to improve the sector. While I welcome the interest of MPs in the sector I wish they would spend more time consulting with the sector before introducing private members bills ostensibly for the benefit of the sector.
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