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Amid charitable donations dip, federal government commits to further constrain giving

Amid charitable donations dip, federal government commits to further constrain giving

Press release

Toronto, April 16, 2024 — On Tuesday April 16th, Budget 2024 in large part reaffirmed the federal government’s commitment to decrease the value of current donations incentives for registered charities.  
Proposed changes to the Alternative Minimum Tax, a measure meant to ensure tax filers benefitting from credits and deductions remain subject to a minimum amount of income tax, includes a recalculation of the value of the Charitable Donations Tax Credit (80% of its value), and a capital gains inclusion rate of 30% (up from 0%) for donations of public securities, such as stocks and mutual funds.

Meaning, for certain, often high-income tax filers that become subject to this alternative way of calculating their annual income tax, incentives for their donations to charity are reduced.
Initially announced in Budget 2023, the charitable sector has responded to this proposal with concerns over how their revenues would be adversely affected and communicated the negative impact on community services and programs. For some organizations changes in donor behaviour are already evident, as some pledges are being renegotiated and donations held back, at least until the changes are confirmed through legislation.
In response to the sector’s advocacy, Budget 2024 amends the proposed cap on the donations tax credit to 80%, up from 50% as announced in Budget 2023. The capital gains inclusion rate increases from 0% to 30% for donations of stock, mutual funds and other securities remains unchanged.

“Over the years, charities have adjusted to a funding environment with increasingly fewer donors. Gifts from higher income Canadians have typically made up for this shortfall, driven in part by federal incentives for giving,” adds Bruce MacDonald, CEO & President of Imagine Canada. “This announcement comes as a blow to charities, many of which are already struggling with reduced capacity.”

“As has been previously stated, the charitable sector supports tax fairness; we support the flow of revenues to government for vital services and programs. This budget demonstrates there are innumerable ways to advance this goal: from taxes on luxury items to revenues from sales of tobacco and vaping. Limiting donations to charities working to address affordability & housing crises, the effects of climate change and an aging population, is short-sighted.” MacDonald adds.

Last March, Statistics Canada released taxfiler data showing a marked overall decline in donations to charities.



Imagine Canada  is a national, bilingual charitable organization whose cause is Canada’s charities and nonprofits. Through our advocacy efforts, research and social enterprises, we help strengthen charities, nonprofits and social entrepreneurs so they can better fulfill their missions. Our vision is of a strong Canada where charities work together alongside business and government to build resilient and vibrant communities.

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For additional information please contact:

Émilie Pontbriand
Senior Manager, Strategic Communications