Opinion: Funding all Liberal election promises will take hard work and a collaborative effort
Investment industry veteran, volunteer board member and philanthropist.
During the election campaign, all party leaders focused on several key issues including the pandemic, affordable housing, child care, climate change, economic recovery and job creation. However, there has been no discussion of the serious financial challenges facing our health care organizations, social service organizations, arts and culture, education and religious organizations as a result of the pandemic.
Funding each of the key Liberal Party platform promises will be a challenge, as not only do they require billions of dollars, but these costs are added to the current deficit and growing government debt. In addition, the minority government will need to gain the support of the opposition parties, so implementing these promises will also take considerable time.
Inclusion of a measure in Budget 2022 to eliminate the capital gains tax on charitable donations of private company shares and real estate would allow charities to receive approximately $ 200 million in more per year, every year in the future, at a nominal cost to the government. This amendment would trigger donations of private company shares and real estate to over 85,000 registered charities serving millions of Canadians.
This measure would also capitalize on the success of the abolition of the capital gains tax on donations of listed securities. Since 2006, when the capital gains tax balance was removed from donations of listed securities, charities have received over $ 1 billion in donations of listed securities virtually every year. As Canada is on the cusp of an economic recovery, it is important to ensure that the country’s charities participate in this recovery. Additional instruments that encourage Canadians to be generous will be essential to enable the charitable sector to bridge the gap between the current period of significant stress and a time when they can take a more sustainable and healthy position.
Implementing this measure would resolve the existing inequity in the current Income Tax Act between entrepreneurs who go public and donate shares to a charity, and entrepreneurs who keep their business. private. In addition, it would level the playing field when it comes to fundraising between our charities and their American counterparts. In the United States, gifts of appreciated capital property are exempt from capital gains tax, including listed securities, shares of private companies, and real estate. In Canada, the exemption is only permitted for donations of listed securities.
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Any concerns about evaluation abuse were addressed in the 2015 budget (although the plan itself was ultimately not adopted). Capital gains tax on charitable donations of shares of private corporations and real estate would only be exempt if the donor sold the asset to an arm’s length party and donated all or all of it. a portion of the proceeds in cash to a registered charity within 30 days of the sale. .
Finally, this plan also makes it possible to fight against inequalities in our society. By donating, these donors are voluntarily giving away their assets, which decreases their wealth and redistributes it among Canadians. If there is any doubt as to whether these donations will help Canadians who need them most, just ask the charities that serve them: All charities in Canada unanimously support the removal of the capital gains tax. These charities know that removing this tax will increase donations, which will allow them to better support disadvantaged Canadians.
Our advocacy campaign to call on the government to eliminate the capital gains tax on donations of listed securities began in 1995 and ended in 2006, 11 years later. We have launched a new campaign to ask the government to remove the capital gains tax on charitable donations of private company shares and real estate in 2010, the same tax treatment as donations of listed securities. . Here we are, 11 years later, so the timing would be excellent if this measure were implemented in the 2022 budget.
If you support this measure, it is essential that you communicate your support to your local MP and urge them to table and support our measure at caucus meetings. Including this measure in the next Speech from the Throne, and including it in the 2022 budget, would give the government, and all opposition parties, the opportunity to create a great legacy.
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