First Reference company logo

Inside Internal Controls

News and discussion on implementing risk management

machine cogs image

Private member’s Bill proposes an extension for the use of tax receipts



Most Canadians are aware of the effect that RRSP contributions have on their taxes, and are aware of the deadline for making contributions each year. This is mostly due to the educational efforts of the banks and others that ‘sell’ RRSPs make each year – as the March 1st (or February 29th as the case may be) deadline approaches. The run for RRSPs each year illustrate that when Canadians understand the incentive system they are quite prepared to alter their behaviour to take advantage of it.

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 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. (To see our written submissions click here, a transcript of the oral submissions is available here).

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.

In proposing this change we hoped that this would create two charitable giving “seasons”. The first would be the usual December holiday season and the second would be a tax motivated end of February season. This proposal gives charities, along with partners such as the banks, an opportunity to educate Canadians about the tax benefits of charitable giving.

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 LLB
Drache Aptowitzer LLP

Follow me

Drache Aptowitzer LLP

Tax and Charity Lawyers at Drache Aptowitzer LLP
Drache Aptowitzer LLP is one of Canada’s foremost experts in the law related to charities and non-profit organizations. Their team of bloggers is led by Adam Aptowitzer LLB. He is a lawyer practicing in the areas of charity and tax law. He is a member of both the bars of Alberta and Ontario. He has been speaking and writing on the topic of charity law for several years and been published in numerous publications including the Canadian Taxpayer, the Canadian Fundraiser and the Not-for-Profit News and has been cited as an expert in many publications including the National Post.Read more here
Follow me

Latest posts by Drache Aptowitzer LLP (see all)

, , , , , , , , , , ,

Comments are currently closed.