P.E.I. charities seek capital gains tax break on donations

Ten Island charities have written the prime minister and leaders of other parties asking them to consider waiving capital gains tax on donations of stocks in private companies and real estate — a move they estimate could generate an additional $200 million in donations for Canadian charities, and would cost Ottawa between $50 million and $65 million in taxes. 

A full-page advertisement recently appeared in the local newspaper, signed by charities including the QEH Foundation, Big Brothers Big Sisters of P.E.I. and the Boys and Girls Club of Charlottetown.

"It widens the opportunities for charities to raise funds, either through the conversion of stock and getting the capital gain offset for that, or even donating real estate," said Bruce Craig, the president of the P.E.I. Symphony, one of the signatories of the request.

For instance if someone was to donate a piece of land, neither they nor the registered charity would pay capital gains on the property — the donor would get a tax receipt for the full value of the property, Craig explained.

'Opens up new avenues'

This would make donating such property easier, especially for donors with less ability to pay the tax. 

"This would be absolutely new ground for any non-profit," said Craig.

"It opens up new avenues for us, and all of the charities, in terms of revenue streams we haven't been able to tap in previously." 

In a statement to CBC P.E.I., the federal finance department said Canada's tax treatment of charitable donations is already recognized as being among the most generous in the world.

"The government values input from the charitable sector and is aware of the proposal to exempt capital gains on donations of private company shares and real estate from tax," a finance official said. "In Budget 2016, the government announced that it would not be proceeding with this proposal."

Craig argues that the purpose of charities is to carry out government functions — such as hospitals, symphonies and youth clubs — with private funding, and this would support that. 

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With files from Laura Chapin