On March 21, 2013 at 4pm, Finance Minister Jim Flaherty delivered the 2013 Canadian federal budget. There were a number of interesting proposals relating to charities. Some of the highlights include a new temporary First-Time Donor’s Super Credit (FDSC) designed to encourage new donors to give to charity. “The FDSC will increase the value of the federal Charitable Donations Tax Credit by 25 percentage points if neither the taxpayer nor their spouse has claimed the credit since 2007” Flaherty has ignored many suggestions for increased tax incentives that would have been expensive and disproportionately benefitted the rich such as the elimination of capital gains on donations of land or private shares.
Also the Canadian government has introduced further measures to allow CRA to institute collection actions for amounts related to tax shelter gifting arrangements when a taxpayer has objected to the assessment. The CRA was prohibited from collecting taxes, interest and penalties if the person objected to the assessment. Needless to say many of the disputes took many years to resolve and therefore resulted in a substantial delay in the collection of the taxes. The CRA can now collect up to “50 per cent of the disputed tax, interest or penalties. This measure will apply in respect of amounts assessed for the 2013 and subsequent taxation years.”
Also the Federal government noted, but did not provide details “Consistent with recommendations put forward in the Standing Committee’s report and the need for restraint in the current fiscal context, the Government will work with the charitable sector, including Imagine Canada, to encourage more donations by a greater number of Canadians and further enhance public awareness, reduce red tape, and increase transparency and accountability in the charitable sector.”
Here are excerpts from the 2013 Canadian Federal Budget in a note entitled 2013 Canadian Federal Budget - pieces of the budget that affect the Canadian charitable sector
If you are interested in how previous budgets affected Canadian charities please see some of our previous blog entries:
Highlights of Federal Budget 2012 relating to charities
2012 Canadian Federal Budget - March 29, 2012 and its impact on charities
2011 Canadian Federal Budget passes - new provisions affecting charities and RCAAAs in force
Budget 2011 and new “ineligible individual” category: How this can affect your charity
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.