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Today the House of Commons Standing Committee on Finance (FINA) released its much anticipated report on Tax Incentives for Charitable Giving in Canada. The report discuss “Charitable Donations and Donors in Canada”, “The Regulation of Charities”, “Tax Incentives and their Estimated Federal Fiscal Cost” as well as specific proposals such as Charitable Donations Tax Credit Thresholds and Rates and Donations of Real Property and Shares of Private and Public Corporations. There is also discussions of bequests and tax fairness as well transparency and accountability of charities.
Here is the list of recommendations from the Finance Committee:
LIST OF RECOMMENDATIONS
1. Subject to the government’s stated intention to balance the budget in the medium term, that the federal government explore the feasibility and cost of eliminating or lowering the capital gains tax on charitable donations of real or immovable property or the shares of private corporations to charities, provided that the proceeds of disposition are donated to a charity within a fixed period.
2. Subject to the government’s stated intention to balance the budget in the medium term, that the federal government explore the feasibility and cost of adopting a stretch tax credit.
3. Subject to the government’s stated intention to balance the budget in the medium term, that the federal government examine the feasibility and cost of extending the carry-forward period for claiming a charitable donation, including gifts of ecologically sensitive lands or gifts of certified cultural property.
4. Subject to the government’s stated intention to balance the budget in the medium term, that the federal government explore ways to increase charitable giving in the corporate sector — including through a review of the current donation contribution
limit — and the cost of such potential initiatives.
5. Subject to the government’s stated intention to balance the budget in the medium term, that the federal government explore the feasibility and cost of the promotion of bequests to charitable organizations and transfers of property to a charity as a result of a will.
6. That the federal government undertake a technical review of the Income Tax Act as it relates to charities, including the definitions of the terms “charity”, “charitable donation”, and “gift”, to ensure greater simplicity and reduced administrative compliance costs for charities.
7. That the federal government continue to monitor charitable giving trends and characteristics, and make such data available.
8. That the federal government further promote charitable giving by reminding and educating Canadians of existing tax incentives for charitable donations and their benefits.
9. That the federal government work with the charitable sector to promote the use of “mobile giving”, educating Canadians on the advantages and convenience when making charitable donations using new technology.
10. That the federal government continue to explore social finance instruments as a way to further encourage the development of government-community partnerships.
11. That the federal government continue to explore ways to reduce the administrative burden or “red tape burden” on charitable organizations, including — but not limited to — a review of the possibility of streamlining the excess corporate holdings provisions for private foundations, duplicative requirements, and the possibility of introducing administrative reporting on a sliding-scale basis, proportional to the size of the charitable organization.
12. That the federal government continue to recognize that promoting increased transparency and accountability in the charitable sector will support greater confidence among Canadians and their willingness to donate more generously. As such, the
federal government should explore options to continue to improve accountability and transparency in the charitable sector, such as potentially giving the Canada Revenue Agency (CRA) a greater ability to disclose serious non-compliance by qualified donees and to disclose the annual returns of such donees, establishing a requirement for charities to demonstrate annually their “public benefit”, adopting measures as proposed in Bill C-470 as passed at third reading in the 40th Parliament, and allowing the CRA the ability to disclose some or all information contained on the Non-Profit Organization Information Return.
Here is a copy of the House of Commons Finance Committee report on Tax Incentives for Charitable Giving in Canada.
The full report is also available at http://www.parl.gc.ca/Content/HOC/Committee/411/FINA/Reports/RP5972482/411_FINA_Rpt15_PDF/411_FINA_Rpt15-e.pdf
Here is the French version of the full report: http://www.parl.gc.ca/Content/HOC/Committee/411/FINA/Reports/RP5972482/411_FINA_Rpt15_PDF/411_FINA_Rpt15-f.pdf
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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.