Change the tax laws to boost charitable giving
THeStar.com – Opinion/Editorials – The federal government should bring in a straightforward tax measure that could increase donations to Canadian charities by some $200 million a year.
Dec. 20, 2016. Editorial
Here’s some disturbing news in the days before Christmas, traditionally known as the “giving season.”
A new national survey shows that Canadians give considerably less to charity than do our American neighbours. What’s worse, the share of our income that we give to charity has been steadily declining and is now at a 10-year low.
It’s not that Canadians aren’t generous. Statistics for things like volunteering show we’re ready to share with others. But U.S. tax laws do more to encourage giving to charity by offering more generous tax breaks to those who donate.
The result is that our vast network of charitable organizations – everything from small social service agencies to hospitals, universities and major cultural institutions – must struggle each year to raise the money they need.
The federal government should start to address that shortfall in its spring budget by bringing in a straightforward measure that could increase donations to Canadian charities by some $200 million a year.
The measure involves broadening the tax exemption on capital gains for charitable donations. It would give the same tax treatment to donations of real estate and shares in private companies as is now given to gifts of publicly traded shares.
This idea is the brainchild of Donald K. Johnson, a former financier who serves on many non-profit boards. It has been publicly embraced by the biggest charitable organizations in the GTA – including the University of Toronto, United Way, SickKids Hospital, St. Michael’s Hospital, the Toronto Symphony Orchestra, Royal Ontario Museum… and the list goes on.
Back in 2006 Johnson successfully persuaded the government of Paul Martin to make another change to the Income Tax Act that proved to be a boon for charities.
The government exempted donations of publicly traded stock from all capital gains tax. That meant people who gave stock to charities were no longer hit with a big tax bill from Ottawa. That single change resulted in charities receiving an extra $1 billion in donations almost every year since 2006.
Now Johnson, backed by the big charities, is pushing for the Trudeau government to extend that benefit by treating donations of real estate and shares in private companies in the same way for tax purposes. Experts consulted by Johnson say that would result in additional donations to charities of about $200 million a year. The cost to the federal treasury would be between $50 million and $65 million.
Two years ago, when the Harper government was preparing its last budget, the Liberals and NDP supported this idea but the Conservatives did not act on it in line with their determination to balance the budget at all cost.
Johnson’s proposal would make it easier for charitable organizations to tap into Canada’s vast private wealth and put more of it to use for the public good. It’s time for the Trudeau government to take a fresh look at this timely idea and make it part of its spring budget.
< https://www.thestar.com/opinion/editorials/2016/12/20/change-the-tax-laws-to-boost-charitable-giving-editorial.html >
Tags: ideology, philanthropy, tax
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