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Charitable sector needs better tax breaks

By 
  • September 10, 2010
Arthur Peters, executive director of ShareLifeTORONTO - ShareLife executive director Arthur Peters wants the fundraising arm of the archdiocese of Toronto more involved in efforts to encourage charitable giving with tax breaks on donations.

The Parliamentary Standing Committee on Finance has heard submissions from the charitable sector for years on ways to boost Canadian charitable giving. Peters would like to see lobbying by the charitable sector be more successful.


“The concept of encouraging people to contribute more to charity is obviously something we would be interested in,” Peters said.

The last time charities got a significant break in the tax code was 2006, when Ottawa eliminated capital gains tax on stocks, bonds and other tradable securities given to charity. The break worked wonders before the stock market meltdown of 2008.

Once capital gains were wiped out in the stock market crash, the gifts of stocks slowed to a trickle.

“We’re starting to see it again,” said Peters. “We just received a very significant gift of shares in the last two weeks — very significant.”

Facts on charitable giving

By Catholic Register Staff

The economic benefit of charities is often overlooked, but it’s not insignificant. Some facts about Canada’s charitable sector:

  • Charities generate more than $87 billion a year, almost seven per cent of Canadian gross domestic product.
  • The sector employs the equivalent of 1.5 million full-time staff.
  • Charities organize and direct the activities of 12.5 million volunteers.
  • The vast majority, 84 per cent of Canadians, give to charity.
  • Half of all donors gave less than $120 in 2007.
  • Only 24 per cent of Canadians claimed charitable donations on their tax returns in 2007 — down from 30 per cent in 1990.
  • In 2000, 18 per cent of Canadian adults were responsible for 80 per cent of all money donated to charities.
  • Six per cent were responsible for one-third of donated dollars.
  • Just nine per cent of Canadians contributed 80 per cent of all volunteer hours.

Though ShareLife raised $400,000 more this year than the year before, in general the charitable sector has struggled.

The most recent effort to get the tax code on charity’s side is a submission to the Parliamentary Standing Committee on Finance from Cardus, a faith-based think tank. Cardus is asking the government to change the charitable tax credit for donations over $450 from 29 per cent to 42 per cent in the 2011 budget. The think tank estimates the change would cost the treasury between $300-$400 million.

Once the economic and social benefits of more charitable giving have been demonstrated by the tax break, Cardus believes the government could eventually raise the tax credit for all donations over $200 to 42 per cent. The Finance Department estimates the cost of this proposal at $900 million.

The Cardus proposal comes on the heels of Imagine Canada’s request that the government increase the current federal charitable tax credit for donations over $200 (up to a maximum of $10,000) from 29 per cent to 39 per cent — but only on new giving. Taxpayers would get the higher 39-per-cent credit for giving that exceeds their previous highest level.

The idea is to help donors give more.

At ShareLife they never ask people to give because of the tax benefits, said Peters.

“We don’t ask people to give because it’s a tax benefit. We ask people to give because as Catholics we’re called to do so,” he said.

But that doesn’t mean tax treatment of charitable contributions is irrelevant.

“People looking to give may consider giving more if there was a tax benefit,” he said. “But again, our message is we give because of the work we do.”

Past lobbying efforts have sometimes seen ShareLife, which raised just under $12 million the year ending in March, on the sidelines. Peters has called up some of the charity coalitions which have in the past taken newspaper ads in support of tax reform to say ShareLife would welcome an invitation to participate.

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