Not paying enough tax? Some Canadians do debt-reduction donations
By Mark Gollom, CBC News
Posted: Apr 27, 2012 5:17 AM ET
Last Updated: Apr 27, 2012 5:15 AM ET
Receiver General Rona Ambrose said she is surprised by how much Canadians donate to pay down the national debt. (Adrian Wyld/Canadian Press)
Every so often, Public Works Minister Rona Ambrose sits at her desk, takes pen in hand, and in her role as Receiver General, writes a letter thanking Canadians who have donated money to pay off the massive national debt.
For those eagerly awaiting a tax refund to put towards a trip or major purchase it may sound odd, but some people actually go out of their way to give the government more than they're required to under the country's tax laws.
"When we receive these gifts, once in a while I'll write a letter back to the person and just say, 'thank you so much for being a great Canadian citizen.' I think it tells an amazing story of a very generous gesture on behalf of Canadians," Ambrose told CBCNews.ca.
The issue of individuals doling out more money to the government was recently raised by the results of a survey that suggested Canadians are willing to pay more taxes. Commissioned by the Broadbent Institute, the survey of 2,000 Canadians revealed that 23 per cent are "very willing" and 41 per cent are "somewhat willing" to pay slightly more tax in order to protect social programs such as health care, post secondary education and pensions.
How much more was never addressed. But being financially generous in a survey is much different than actually forking over the cash.
'By no means is that going to pay off the debt, but I think we all appreciate the generosity of people.'—Rona Ambrose, Minister of Public Works
Still, for those Canadians eager to donate their money to the federal government, there's nothing stoping them. They can write a cheque, through the Debt Servicing and Reduction Account, payable to the Receiver General, which will go directly to paying down the federal debt. A taxpayer who makes a donation is issued a tax receipt and is able to claim the donation on his or her income tax return.
Over the past 10 years, the government has received more than $22 million in donations to pay down the debt.
Ambrose said a lot of the donations come from older people who may not be paying taxes, but who want to contribute.
"They paid taxes their whole lives, and of course they contributed enormously, but they're thinking of leaving the country in a better place. So they want to leave some money in their will to the government and I think that's commendable."
From 2001/02 to 2006/07, the total amount that Canadians donated to the government each year averaged about $125,000. In 2007/08 there was a huge spike to $3.8 million, then the total donation amount dropped to $500,000 in 2008/09, and rose again to $5.8 million in 2009/10. Donations hit a record $11.2 million in 2010/11.
Public Works did not have an explanation for the spikes, and Ambrose said she's surprised by how much has been donated.
"That's a lot of money when you think that a lot of it comes in small amounts," she said.
"I wrote back a letter to a gentleman who gave $50 and another gentleman who gave $150. They wrote a letter saying they want this money to help pay off the debt and how great Canada is and all the reasons to pay off the debt, and it's very heartfelt."
But even if Canadians donated a total of $11 million each year to help pay down the $583 billion debt, and that's all the government relied on, it would take 53,000 years.
"By no means is that going to pay off the debt," Ambrose said. "But I think we all appreciate the generosity of people."
Ontarians also have the opportunity to contribute money to the provincial debt. The tax form Ontarians fill out allows them to donate all or part of their tax refund to the Ontario Opportunities Fund, which goes toward paying down the provincial deficit and debt.
According to the most recent statistics, reflecting the tax year of 2010, a total of 29,754 people have donated to the fund since it was established in 1996. The tally of those donations stood at $2,043,235.54 at the end of 2010.
Canada isn't the only country benefitting from the generosity of its citizens. The U.S. Deparment of Treasury's website also allows people to help out with the country's more than $15 trillion debt, giving them the option to make payments online through their bank account or credit card or by cheque.
Ambrose suggested more donations would be made if the account's profile was raised like has been in the U.S.
"As receiver general, I have started to think about what we can do to advertise this more. In the U.S., the U.S. Treasury is very open about it. They advertise it. It's on their website. They want people to write cheques to the Treasury. They encourage people and here we're not as public about it."
However, Canadians have recently been much more generous than Americans. In the 2009/10 fiscal period, Americans donated $2.8 million to their debt compared to Canada's tally of $5.8 million. And in 2010/11 Americans donated $3.2 million, compared to Canadians' $11.2 million.
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