An Open Letter to the Prime Minister and the Minister of Finance
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: In my role as a volunteer board member of four major volunteer organizations in healthcare, education, social services and arts and culture, I am well aware of the increasing needs of the benefactors of these organizations and how the charitable sector plays a vital role in the well-being of society generally. The needs of the benefactors are growing and governments cannot keep up with the increasing demands. To provide much needed relief with the private sector as a helping partner, I recommend that your government remove the capital gains tax on charitable donations of private company shares and real estate in the 2019 budget, the same policy and legislation that presently exists for listed securities. There are 84,000 registered charities in Canada which employ over 2.1 million people and serve a large proportion of the Canadian population from all walks of life. The case for this proposal is compelling:
• It is not a “Tax Break for the Rich”. The real beneficiaries of this proposal are the millions of middle class Canadians who are served by our registered charitable organizations. For example there are now 87 United Ways and Centraides in Canada and collectively, they provide crucial funding to over 3,000 community based agencies that deliver more than 6,200 services and programs to support those in need.
• The fiscal cost of the measure is shared by our tax payers and the donor, whereas the cost of direct government spending is borne 100 per cent by our tax payers.
• The measure removes a barrier to charitable giving and enables successful entrepreneurs to give back to the communities that have played an important role in their success. These entrepreneurs live in all parts of Canada, small towns and villages in rural areas as well as our cities.
• The exemption would put the Canadian charitable sector on an equal footing with their United States counterparts with whom we compete for the best talent to help raise funds and address the challenges of managing the operations of charitable organizations.
• Extending the capital gains exemption would generate an estimated $200 million in new charitable donations every year going forward. As the previous Conservative government included this measure in its 2015 budget, it is reasonable to assume that the Conservatives will include this measure in their 2019 Election Platform. There is a very high level of awareness and support among all stakeholders in the charitable sector including the 2.1 Canadians whom the sector employs. I urge you to include this measure in your 2019 budget. It will be a great legacy for your government to leave for all Canadians for generations to come. Thank you! Yours truly, Donald K. Johnson, O.C., LL.D.
Heart and Stroke Foundation