Donald K. Johnson, volunteer board member of four not-for-profit organizations in each area of the charitable sector and is a member of the Advisory Board of BMO Capital Markets.
Charities across Canada unanimously support the proposal for the federal government to remove the capital gains tax on charitable donations of private company shares and real estate in the 2015 Budget. They have all benefited enormously from the removal of the capital gains tax on charitable donations of listed securities in the 2006 budget. Charities have received more than $1-billion in gifts of stock every year since 2006. They also know that these proposed measures would result in additional private sector funding of $200-million per annum and the fiscal cost to the federal government would only be $50-million to $65-million. This is only 1 per cent of the government's forecast budget surplus of $6.4-billion next fiscal year.
Given the foregoing, I'm somewhat surprised to learn that many politicians think this proposal is not relevant to the upcoming election. I respectfully disagree for the following reasons:
• Our hospitals, universities, arts and cultural organizations, social service agencies, research institutes and religious organizations employ more than 2.1 million Canadians. Millions of Canadians benefit from the crucial services they provide. They are aware of the vital need for increased charitable donations to supplement funding from the federal, provincial and municipal governments.
• There are 85,000 registered charities in Canada and they all have volunteer board members who generously donate their time to fundraising and donating personally. There are hundreds of thousands of volunteer board members who actively support our proposal to provide additional tax incentives for charitable donations. They know how successful it has been in providing gifts of listed securities. These business and community leaders reside in all constituencies across Canada, in cities, towns and rural communities.
• There are 3,573 members of the Association of Fundraising Professionals across Canada. Each of these professionals are employed by leading not-for-profit organizations and focus on fundraising from the private sector. clearly, each of these individuals are well aware of these proposals and are unanimously supportive.
• There are 109,000 members of the Canadian Federation for Independent Business (CFIB) all of which are private organizations. Many of these members are interested in giving back to the communities that have contributed to their success. They are not on a level playing field with shareholders of publicly listed companies because, if they donate shares, they are subject to a capital gains tax. This, obviously, prevents them from giving as much as they wish.
• The heads of 24 leading not-for-profit organizations in the GTA and surrounding area have signed a full-page letter addressed to the Prime Minister and the Minister of Finance published in the Sept. 21 issue of the Toronto Star. The letter outlines the compelling case for introducing these measures in the 2015 budget. The hundreds of thousands of employees of these organizations are conscious of their leaders' support. A similar letter, signed by national umbrella organizations representing each area of the not-for-profit sector was published on the outside back cover of The Globe and Mail in June, 2014. The combined circulation of these two newspapers is 700,000 and the combined readership is over 1,700,000. These letters effectively raise the awareness of these budget proposals with voters across Canada and the GTA in particular.
• Many Mayors are aware of the benefit to the not-for-profit organizations in their municipalities and are supportive of the proposals. Canada's longest serving Mayor, Hazel McCallion, the Mayor of Mississauga, has expressed her support. It is also important to note that Toronto Mayoral candidates John Tory and Olivia Chow supported this proposal and stated, in a publicly broadcast debate hosted by the C.D. Howe Institute, that they would inform the federal government of their support.
Once all MPs are aware of the above facts, we believe they will recognize that these measures are relevant to voters across the country. This article will help demonstrate that these budget proposals are good public policy. Implementing these proposals will also be a lasting legacy for the Canadian not-for-profit sector.