publication date: Nov 6, 2012
|
author/source: Adam Aptowitzer
Most Canadians are aware of the effect that RRSP
contributions have on their taxes, and are also aware of the deadline for
making contributions each year. This is mostly due to the educational efforts
of the banks and other RRSP providers each year as the March 1
st or
February 29
th deadline approaches. The yearly run for RRSPs
illustrates that when Canadians understand the incentive system, they are quite
prepared to alter their behaviour to take advantage of it.
Run like RRSP season to boost understanding
In February, we made submissions to the House of Commons
Finance Committee which was studying the incentives to giving. In our
submissions we made the point that whatever incentives are currently in place,
or that Parliament might put in place at a later date, they would be of limited
usefulness if Canadians did not understand the nature of the system. We also
pointed out that the RRSP season, taking place in February, allows people to
make contributions with full knowledge of their income from the previous year.
And so to answer both of these concerns we [Arthur Drache
and Adam Aptowitzer] suggested that the tax credits generated from donations in
the first 60 days of a year be available to offset taxes owing from the
previous year. In this way the charitable giving deadlines would mimic those
for RRSPs. (Download our
written submissions or a
transcript
of the oral submissions.)
Proposal moves forward as Private Member's Bill
Our suggestion has been taken up in the form of a Private
Member's Bill from MP Peter Braid. (The text of the bill is
available
here). Most in the sector will remember Mr. Braid as having originally
proposed that the Finance Committee conduct an investigation into incentives
for charitable giving in the first place. The Bill proposes that the tax
credits from all gifts to charity made in the first 60 days of the year be
available for use in the previous taxation year. To reinforce the educational
component Bill C-458 also declares the last seven days of February to be
National Charities Week. No other changes are made to the
Income Tax Act or any other acts as a result.
Another season for giving
In proposing this change we hoped that this would create two
charitable giving "seasons," the the usual December holiday season and a tax-motivated
season at the end of February. The proposal gives charities, along with
partners such as the banks, an opportunity to educate Canadians about the tax
benefits of charitable giving.
Tell your MP now
As the matter is a Private Member's bill the Parliamentary
vote is likely to be a free vote of the Members. And while we hope that the
Members will vote for the bill without any convincing, those that support the
idea behind the bill would do well to let their Member of Parliament know.
Adam Aptowitzer
of Drache Aptowitzer LLP is a charity law lawyer with a national practice based
in Ottawa. He has been published in Canadian Taxpayer, Canadian Fundraising
& Philanthropy and the Not-for-Profit News. He has also published a widely
distributed study on the regulation of Canadian charities with the C.D. Howe
Institute.
As a speaker, he has presented to the National Symposium
of Charity Law, the C.D. Howe Institute, the Association of Fundraising
Professionals, the Canadian Association of Gift Planners, the Ottawa Estate
Planning Council and various large and small Canadian charities. He has also
given expert advice on Parliament Hill. Adam is an executive member of the
Canadian Bar Association's Charity and Not-for-Profit Law section.
For speaking
engagements and consultations, contact him at 613-237-3300 or visit http://www.drache.ca.
