Tax move expected to broaden and increase charitable giving to
health care, education, social services and culture across Canada
TORONTO, March 19 /CNW/ - The Federal Government's decision to remove the
capital-gains tax on listed stocks donated to private foundations will likely
generate very substantial donations to private foundations and, consequently,
to charities, according to Marvi Ricker, Vice-President and Managing Director,
Philanthropic Services, at BMO Harris Private Banking.
Ms. Ricker said the government's decision is a very positive move that
will build on changes it made last year to increase the donation of securities
to charitable organizations and broaden the options for individuals and
families who want to direct their philanthropy in line with their values.
"We applaud the government for supporting further increases in charitable
donations by Canadians and their families," said Ms. Ricker. "Now, individuals
and families who have chosen to create private foundations will be encouraged,
through tax incentives, to increase their philanthropy, supporting worthy
causes that reflect their values and preferences. The elimination, last May,
of the capital-gains tax on donations of publicly traded equities to public
foundations and charities has led to increases in substantial donations,
notably to universities and hospitals, which is certainly beneficial to
Canadians. I expect this change will also directly result in some very
Ricker noted that in 1996, federal government tax measures allowed gifts
of assets, other than cash, to be donated to charitable organizations and then
increased the tax credit to 75 per cent of an individual's taxable income from
50 per cent. In 1997 the capital gains inclusion rate for appreciated
marketable securities was cut in half and the related donation claim was also
increased. Those measures, as well as the May 2006 budget measure that
eliminated capital gains tax on donations of securities to charities created
immediate increases in donations.
"Health care and education costs are two big-ticket items that have
traditionally relied almost entirely on government support but this has
changed now because of the enormous cost. Consequently, more and more
individuals are being called upon to contribute to the charities that they
care about and they are increasingly able to do so as the wealth in Canada has
increased significantly," said Ricker.
"However, there is real donor fatigue out there in the sense that people
are overwhelmed by the smaller $50 and $100 requests. Many Canadians would
rather give a significant amount and know that their money is going to be used
in a way that is meaningful and will have an impact," she said.
Ricker also acknowledged the contribution of a former colleague, Donald
K. Johnson who is a past vice-chairman of BMO Nesbitt Burns and currently
serves as a senior advisor to BMO Capital Markets. Mr. Johnson has been an
outspoken advocate for the measures that the government has taken to increase
Canadians' philanthropic deeds. "The charitable sector owes a great debt to
Don Johnson for his relentless pursuit of the government on this issue over
the past several years," said Ricker.
Mr. Johnson stated, "The complete capital gains exemption on gifts of
stock to public charities in the May 2, 2006 budget has stimulated substantial
increases in charitable giving. The commitment to extend the capital gains
exemption on stock donated to private foundations will further increase
charitable giving. It will encourage philanthropists to establish private
foundations that will provide additional support to the not-for-profit sector
for future generations."
For further information:
For further information: JoAnne Hayes, Toronto, firstname.lastname@example.org,
(416) 867-3996; Lucie Gosselin, Montreal, email@example.com, (514)
877-1101; Laurie Grant, Vancouver, firstname.lastname@example.org, (604) 665-7596,