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Please act now to unlock greater private wealth for public good
While it is difficult for a minority government to obtain the support of opposition parties prior to an election, one public policy initiative does have the support of the Conservatives, the Bloc Québécois and the NDP. The proposal is to make a simple amendment to the Income Tax Act to eliminate the remaining capital gains tax on gifts of listed securities. This would stimulate greater donations to every area of the charitable sector across Canada. The beneficiaries would be our universities, hospitals, the United Way/Centraide, community foundations, research institutes, and arts and cultural organizations. Because of broad party support, the government could implement this proposal in the upcoming fall fiscal update. The impact of such a measure has been amply demonstrated. The 50% reduction introduced in the 1997 budget led to over $1.5 billion in additional gifts of stock, including pledges. One dramatic example took place at the United Way of Greater Toronto, where the total gifts of stock rose from only $44,000 from 1956 to 1996 to more than $24 million from 1997 to 2005. One in three Torontonians receive support from the United Way, or over one million people. Canadians may also be surprised to realize that our not-for-profit organizations employ over two million Canadians. Our charities are vital to making our communities desirable places in which to live and work. Our proposal is recognized as being very tax effective, as it is estimated to cost the federal government only $50 million of forgone annual tax revenue. Further, the cost would be shared equitably between the donor, the federal government, and the provinces. For a typical gift of stock, the federal government would provide tax assistance of 40% and the provinces 20%, leaving the donor’s after-tax share at 40%. Importantly, there is no tax revenue cost to municipalities and most charities are located in cities. To date, the mayors of 24 cites from every Canadian providence have, on behalf of all their charities, written letters of support to Finance Minister Goodale, including St. John’s, Halifax, Antigonish, Wolfville, Fredericton, Moncton, Charlottetown, Montreal, Quebec City, Toronto, Mississauga, Hamilton, London, Kitchener, Windsor, Oshawa, North Bay, Winnipeg, Regina, Calgary, Edmonton, Yellowknife, Vancouver and Victoria. Nor does the measure require additional study, having been recommended by the Senate Banking Committee in December 2004, and twice recommended by the House of Commons Finance Committee in its pre-budget reports to the Finance Minister. In addition, 16 former premiers from every province, representing every political party, together with three former prime ministers, have publicly supported the measure. By implementing the proposal the government would be leveling the playing field with both the United States and the United Kingdom, where they have a complete capital gains tax exemption for gifts of stock. Our charities are competing internationally for the best and the brightest faculty, scientists, researchers, doctors and students, all of which are relevant to enhancing Canada’s productivity. We are therefore urging you to implement this proposal as part of the fall fiscal update. It will remove the final barrier to charitable giving and allow our charities to tap into the generosity of Canadians. Individuals with modest incomes but significant stock assets have often said they would be willing to make significant donations upon passage of this measure. There is no doubt that Canadians can expect announcements of a number of major gifts after it is implemented! Signatories Sharon Sholzberg-Gray, President and CEO, Pearl F. Veenema, Incoming Chair, Billie Bridgman, President and CEO, Don Woodley, Chair, David Naylor, President, The University of Toronto Paul Davenport, President, The University of Western Ontario Donald K. Johnson, C.M. Richard Ivey, Chair, The Canadian Institute for Advanced Research, representing 166 members Georgina Steinsky Schwartz, President & CEO, Monica Patten, President and CEO, Jack Mintz, President and CEO, Tad Brown, Chair of Canadian Government Relations Committee, Association of Fundraising Professionals, representing 2,700 members Malcolm D. Burrows, Chair, Jocelyne Soulodre, CEO and President,
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