The Budget documents comment more broadly
on the Report of the Standing Committee on Finance. The Committee had been tasked with reviewing
charitable donation incentives and making recommendations in this regard. As noted above, the Committee released its
report on February 11, 2013. We reported
on the contents of the report in the February issue of this
Newsletter.
After noting the
general support that Canadians provide to the charitable sector (approximately
$8.5 billion in charitable donations in 2011, from 5.7 million Canadians), as
well as the tax incentives and support provided to the sector, the Budget
document states that the Government will “redouble” its ongoing efforts in the
areas identified by the Committee in their recommendations. However, aside from the new FDSC, the Budget
primarily emphasizes steps that have already been taken. The Budget document states:
- with respect to monitoring
charitable giving trends and characteristics, Statistics Canada publishes
annual data on the amounts Canadians donate to charity, as well as a
demographic breakdown and trends in giving; - with respect to public
awareness, the Canada Revenue Agency provides education and information related
to charitable giving; - with respect to social finance,
as noted below, the Government will bring together key players in the non-profit
and private sectors to develop investment-worthy ideas and tap the potential of
the social finance marketplace to promote economic growth and prosperity; - with respect to red tape
reduction, the Government has taken action, as part of the Small and Rural
Charities Initiative, by restructuring the Registered Charity Information
Return to minimize the time small and rural charities need to complete the form;
and - finally, with respect to
transparency and accountability, the Government has taken steps to combat fraud
and abuse in the charitable sector and enhance transparency and accountability
around the political activities of charities.
The Budget document then states:
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.
It is difficult to interpret what these
comments mean for the specific donation incentives that were discussed in the
Standing Committee’s report. In addition
to recommending incentives that would increase charitable giving by young
Canadians, the report had recommended that the Federal Government study the
feasibility of additional donation incentives, including the so-called “stretch
tax credit” (various versions of which would provide increased tax recognition
for increases in annual giving), and relief from capital gains tax on donations
of real estate and private company shares.
While the report had made most of these recommendations subject to the
need for restoring fiscal balance in the medium term, it is hoped that the
government will continue to review these measures as their potential benefit to
sector could be considerable.
