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November 6, 2001

I am pleased to be at your forum today to recognize the important and critical contribution charitable organizations make in our society. My public life has brought me into contact with numerous community-minded individuals who have helped enhance my appreciation of the importance of charities and volunteerism in the lives of all Canadians. Generosity, the act of giving freely, is one of the great pillars of an ethical society.

Charities help people in need every day, year round, and operate in an altruistic way that often goes unnoticed. Many people only truly appreciate such organizations when they themselves face a time of crisis.

Individual volunteers are on the front line. And their endeavours are almost limitless, ranging from alleviating poverty, suffering and distress to funding health and education programs.

As well, charities help people in a variety of ways. By providing financial assistance to those who can’t make ends meet, by lending an ear to those who need companionship, or by putting together specialized programs for persons with disabilities, benevolent organizations help restore dignity where dignity is being threatened.

Never has the true importance of such organizations been made more evident than following the horrific terrorist attacks of September 11^th. The world will owe much to the thousands of volunteers who have united to provide medical, material and emotional support to the incalculable number of people affected by this tragedy.

There was an overwhelming response by Canadians wanting to help in any way they could. People came to airports across the country and opened their homes to stranded travellers whose flights were diverted to Canada when all airliners were grounded.

The Canadian Blood Services reported a never before seen surge in blood donations. Makeshift clinics were quickly put together so that no qualified donor would be turned away.

Within two weeks of the attacks the Canadian Red Cross received about $3.2 million in donations from individuals as well as several corporate donations, including million-dollar pledges from the Bay and Tim Horton’s. The United Way of Canada received more than $2.8 million in donations.

Virtually every financial institution across Canada set up special accounts to accept relief funds for the families affected by the tragedy. This generosity does not even take into account the money Canadians donated directly to American agencies.

Major hospitals, The Salvation Army, St. John Ambulance and countless other organizations across the country have joined in the outpouring of help, along with selfless firefighters, nurses and other aid workers who volunteered their services.

The Canadian government is proud of its participation in the worldwide effort to help prevent more terrorist attacks. We have joined the Americans and the British in the military campaign against terrorism. More than 2,000 soldiers – both men and women – along with an impressive arsenal, have left for Afghanistan to help bring terrorists to justice.

The new omnibus bill proposed by our government on October 15 includes sweeping legislation that, in harmony with new resolutions adopted by the UN Security Council, will help choke off terrorist funding.

• The legislation provides that Canadians who deal with terrorist property will face a maximum penalty of 10 years in jail.

• Persons in Canada and Canadians living abroad will be required to report to the Canadian Security Intelligence Service and the RCMP if they hold assets that they know belong to terrorists.

• Law enforcement agencies will be given more power when it comes to seizing terrorist property.

The proposed new Charities Registration (Security Information) Act demonstrates Canada’s commitment to participating in concerted international efforts to deny support to those who engage in terrorism, to protect the integrity of the registration system for charities, and to maintain the confidence of Canadian taxpayers that the benefits of charitable registration are made available only to organizations that operate exclusively for charitable purposes.

As well, the bill expands the current anti-money laundering role of the Financial Transactions and Reports Analysis Centre of Canada to encompass the tracking of terrorist financing.

Our government’s anti-terrorism plan has four objectives:

• stop terrorists from getting into Canada and protect Canadians from terrorist acts;

• bring forward tools to identify, prosecute, convict and punish terrorists;

• prevent the Canada-U.S. border from being compromised by terrorists; and

• work with the international community to bring terrorists to justice and address the root causes of terrorism.

These measures are an important part of the Government's $280-million Anti-Terrorism Plan – a plan that brings to $1.8 billion the amount the Government of Canada has invested in policing, security and intelligence since Budget 2000.

The countries of the world have united in denouncing the vicious terrorist attacks on the United States. Canada embraces the new resolutions adopted by the UN Security Council in an effort to stop the financing of terrorism.

UN Security Council Resolution 1333, adopted last December, repeated earlier demands that the Taliban voluntarily turn over Osama bin Laden, that it stop providing sanctuary and training for international terrorism and that it promptly close all terrorist training camps. Pursuant to this resolution, all Taliban-related assets, as well as assets of bin Laden and his associates, were frozen.

The day after the attacks on the U.S., the UN Security Council adopted a resolution condemning the attacks in the strongest terms. Resolution 1368 expresses the readiness of the Security Council to "take all necessary steps" to respond to the attacks of September 11 and to combat all forms of terrorism.

And finally, Resolution 1373, adopted on September 28, 2001, required that all states criminalize the wilful provision or collection of funds with the intention that the funds should be used, or in the knowledge that they are to be used, to carry out terrorist acts.

Governments all around the world have moved very quickly to adopt these measures. Terrorist groups have been identified and starved of funds. And that is just the beginning.

There is a critical need to identify such terrorist organizations to eliminate the possibility of some of them posing as charitable organizations. In the past terrorists have abused the tax privileges associated with charities, using them to fund their activities.

We will not let charities be the pawns of terrorists. Charities are an integral part of Canada’s social safety net. They have entered a partnership with government to improve the quality of life for Canadians by protecting the weakest, the poorest and the most vulnerable in society. The federal government values this partnership. That is why we have enacted a number of measures to assist and support the efforts of our charities.

Indeed, over the past eight years the federal government has introduced in its budgets a number of measures to assist charities. Year after year the Government has provided enhanced tax assistance to make it easier for Canadians to donate to charities:

• In 1994 we lowered from $250 to $200 the threshold at which charitable donations begin to earn the 29-per-cent tax credit.

• In 1995 we removed the annual income limit for tax credits on donations of ecologically sensitive lands.

• In 1996 we increased the limits on charitable donations eligible for tax credits from 20 per cent to 50 per cent of net income, and to 100 per cent of net income in the year of death and the preceding year.

• In 1997 we changed the income limit for donations to 75 per cent. We also increased resources for Revenue Canada to enhance information and compliance from charities while simplifying GST accounting, reporting and remittance requirements for charities.

• In 1997 we introduced special tax assistance for donations of publicly traded securities to charities.

• We also increased the 75-per-cent limit by a further 25 per cent for any taxable capital gain arising from the donation of appreciated capital property. This measure will provide a level of tax assistance for such donations that is comparable to that in the U.S.

• In 1998 we increased tax-free allowances for emergency services volunteers.

• We also allowed designated charities to treat certain services they supply to business customers as GST/HST taxable, thereby allowing charities to compete on an equal footing with other suppliers.

• We extended the charitable donations tax credit to donations of registered retirement savings plans, registered retirement income funds and insurance proceeds that are made as a consequence of direct beneficiary designations.

• We also reduced the capital gains income inclusion by one-half in respect of gifts of ecologically sensitive land and related easements, covenants and servitudes.

And just last month my colleague, the Minister of Finance, announced that a special tax assistance measure for charitable donations of publicly traded securities, first adopted in 1997 and scheduled to end in December of this year, would be made permanent. Under this measure, the amount included in the income of a donor in respect of capital gains tax arising from certain donations of publicly traded securities to public charities is one-half the amount included for other capital gains.

Last month’s announcement also applies to the measure we introduced in 2000 to provide more favourable tax treatment for donations of shares acquired through stock option plans.

The half inclusion rate measure has proven to be very successful. The data show that between 1997 and 2000 the number of such donations to charities quadrupled and that their value nearly tripled.

The tax incentive measures that our government adopted since 1994 clearly demonstrate its commitment to making Canada’s charitable sector stronger and more vibrant. There are encouraging signs that this is happening. The most recent National Survey of Giving, Volunteering and Participating, released by Statistics Canada in mid-August, finds that:

• while the number of Canadians who made charitable gifts remained steady at 78 per cent, the total amount donated increased by an estimated 11 per cent to more than $4.9 billion;

• the average annual amount donated by Canadians in 2000 – $259 – also increased by $20 since 1997; and

• 6.5 million Canadians, or 27 per cent of the population aged 15 and older, volunteered during the one-year period preceding the survey.

But the collaboration between the federal government and the voluntary sector goes even further. In the spring of 1999 we launched a joint initiative to develop new and more strategic ways of achieving our mutual goal: improving the quality of life of Canadians.

Three key issues were examined with the sector: building a new relationship, strengthening capacity and improving the regulatory framework. This work laid the groundwork for the Voluntary Sector Initiative launched in June 2000. Its objective is to identify possible solutions to the problems identified earlier. It has been provided with $94.6 million in funding over five years.

I believe that our government has a key role to play in encouraging and supporting the benevolent spirit of Canadians. There are about 78,000 registered charities in Canada. Supporting these organizations is of the utmost importance, and the Government will continue to offer its support nationwide. To this end, it is important that we keep working together and that the lines of communication between us remain open.

I would like to conclude today by thanking each and every one of you for the work your organizations are doing. Your altruism and selflessness are among the noblest of human qualities. We must never forget that it is our human capital, not just our financial capital, that sets Canada apart as one of the best nations in the world to live.

In these times of new challenges we must continue to work together to support our communities, and may we never forget our sense of humanity, which is valued so deeply by all Canadians.