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Ottawa, October 12, 2001
2001-089 

Special Federal Tax Assistance for Charitable Donations of Publicly Traded Securities Made Permanent

Finance Minister Paul Martin today announced a proposal to make permanent the 1997 budget measure that provides special tax assistance for donations of publicly traded securities to charities. This measure was scheduled to expire on December 31, 2001.

Under the measure, the amount included in the income of a donor for capital gains tax purposes arising from certain donations of publicly traded securities to public charities is one-half the amount included for other capital gains.

"From the data available, it appears that this measure has been an effective additional incentive for people to make donations to charities," said Minister Martin. "This is exactly what the measure was designed to do."

Data for the 1997-2000 period show that both the number and the value of donations of securities have significantly increased. They also show that a broad range of charitable areas – education, health, religion, welfare – have benefited from it. These results are consistent with those reported in a study commissioned by the charitable sector.

The Government intends to continue to work with the charitable sector to determine whether there is an appropriate and cost-effective basis for broadening this measure beyond its current application.

Under the federal government’s five-year $100-billion tax reduction plan, the capital gains inclusion rate was reduced to two-thirds from three-quarters as of February 28, 2000, and to one-half from two-thirds as of October 18, 2000.

Today’s announcement also applies to certain donations of securities acquired by an employee through a stock option plan.

The Minister indicated that legislation to implement this announcement will be introduced in Parliament at the earliest opportunity.

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