An Open Letter to the Prime Minister of Canada
Dear Prime Minister,
Re: A Public Policy Issue that will be supported by all Parties
Your 2020 budget presents a great opportunity to introduce a measure that would stimulate an estimated $200 million in charitable donations every year and is supported by hospitals, social service agencies, universities and arts and cultural organizations across Canada. If the owner of private company shares or real estate sold the assets to an arm’s length party and donated the cash proceeds to a charity within 30 days, the donor would be exempt from capital gains tax, the same treatment as currently applies to gifts of listed securities. Although you have a minority government, we are confident that all of the opposition parties would be supportive of this measure. Thomas Mulcair, who was leader of the NDP in 2015, was publicly supportive of this measure in the 2015 budget. Gilles Duceppe, when he was Leader of the Bloc Québécois, was supportive of removing the capital gains tax on gifts of listed securities prior to the 2006 budget. He understood that 2/3 of the fiscal cost of these donations was borne by the federal government and only 1/3 by the Quebec government. Obviously, the Conservatives would be supportive of this measure because it was included in their 2015 budget prior to the election of that year. Also, the non-partisan Special Senate Committee on the Charitable Sector recommended this measure in its June 2019 report. The case for this measure is compelling. It removes an inequity in the current Income Tax Act as it provides the same tax treatment for donations of all appreciated capital assets – listed securities, private company shares and real estate. Any concern about valuation abuse is addressed by the fact that the donor must sell the asset to an arm’s length party. The measure removes a barrier to charitable giving and enables hundreds of thousands of small business owners to give back to their communities and support those in need, as well as the millions of Canadians that benefit from the services provided by our not-for-profit organizations. It would strengthen your government’s relationships with all the provinces and municipalities. 2/3 of the modest fiscal cost is borne by the federal government and 1/3 by the provinces and no cost to the municipalities. Provincially funded hospitals and universities would benefit from increased charitable donations and all not-for-profit organizations in our cities would benefit with no fiscal cost to the municipalities. Including this measure in your 2020 budget would send a positive message to all Canadians, which is timely given the fact that the MPs for each party are concentrated in certain provinces. Thank you for your consideration. All Canadians would be grateful. Yours truly, Donald K. Johnson, O.C., LL.D. cc: Mr. Andrew Scheer, Leader of the Conservative Party of Canada Mr. Jagmeet Singh, Leader of the NDP Party of Canada
M. Yves-François Blanchet, Chef du Bloc Québécois Ms. Elizabeth May, Leader of the Green Party of Canada