An Open Let­ter to the Prime Min­is­ter and the Min­is­ter of Fi­nance

Policy - - In This Issue -

The Right Hon­ourable Justin Trudeau, P.C., M.P. Prime Min­is­ter of Canada The Hon­ourable Wil­liam Morneau, P.C., M.P. Min­is­ter of Fi­nance

Dear Prime Min­is­ter and Fi­nance Min­is­ter:

I have cam­paigned pas­sion­ately over the years to open new sources of fund­ing for Canada’s char­i­ties and other non-prof­its, in­clud­ing my role in elim­i­nat­ing the cap­i­tal gains tax on gifts of pub­licly traded se­cu­ri­ties to reg­is­tered char­i­ties.

On be­half of the non-profit sec­tor, I am now urg­ing you to ex­tend that

ex­emp­tion to the sale of pri­vate com­pa­nies and real es­tate. To safe­guard to the pub­lic in­ter­est, the sale would have to be at arm’s length, and the do­na­tion would have to be made within 30 days of the sale.

The case for this pro­posal is com­pelling:

• It would give many busi­ness own­ers an in­cen­tive to trans­fer a por­tion of their wealth to a good cause, rather than to their fam­i­lies. The Cana­dian Fed­er­a­tion for In­de­pen­dent Busi­ness, rep­re­sent­ing 109,000 pri­vate com­pa­nies, strongly sup­ports the pro­posal.

• Own­ers of pri­vate com­pa­nies would have the same in­cen­tive for do­nat­ing their shares to a char­ity as cur­rently ap­plies to those who take their com­pa­nies pub­lic.

• The ex­emp­tion would put Cana­dian non-profit groups on an equal foot­ing with their U.S. coun­ter­parts. The cur­rent dis­crep­ancy is an im­por­tant rea­son why U.S. non-prof­its tend to be far bet­ter en­dowed than their Cana­dian coun­ter­parts.

• Ex­tend­ing the cap­i­tal gains ex­emp­tion would gen­er­ate an es­ti­mated $200 mil­lion in new char­i­ta­ble do­na­tions a year.

• Most im­por­tantly, ex­panded fund­ing to our hos­pi­tals, univer­si­ties and other non-prof­its will bring in­cal­cu­la­ble ben­e­fits to mid­dle-class Cana­di­ans.

The sooner the ex­panded cap­i­tal gains tax ex­emp­tion takes ef­fect, the sooner the ben­e­fits will start flow­ing. I there­fore urge you to in­clude this mea­sure in the fall fis­cal up­date.

Thank you!

Yours truly,

Don­ald K. John­son, O.C., LL.D.

Ride to Con­quer Can­cer

McGill Univer­sity

Habi­tat for Hu­man­ity

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