The Foundation of Greater Montreal Applauds New Federal Tax Change
Montreal, May 4, 2006 – Charitable giving got a significant boost from the federal government in its recent budget, with a tax change that will benefit donors, community foundations and the local charities they support, said Kathleen Weil, President and CEO of The Foundation of Greater Montreal.
Canadians who donate stock to their local community foundation will now pay no capital gains tax on the growth of those shares, thanks to the new provision announced in Tuesday's budget.
"This is fantastic news for donors who want to make a difference in their community and are looking for ways to reduce their tax bill at the same time," said Ms Weil. "Community foundations saw a dramatic increase in donations when the capital gains tax on shares was reduced. Eliminating the tax on gifts of stock is an incredible incentive to give."
In 1997 the federal government reduced capital gains tax on donations of stock by 50 per cent. The result was a three-fold increase in gifts of publicly traded securities to charities — from $69.1 million to $200.3 million between 1997 and 2000. The percentage of stock donations jumped from 1.6% to 3.9% of all donations.
A recent TD Economics report shows that Canadians hold $1.3 trillion in stocks – almost half of which are unrealized capital gains.
"This change could translate into hundreds of millions dollars in new donations," said Monica Patten, President and CEO of Community Foundations of Canada.
In 2000, during the high-tech boom, more than 60% of community foundation donations came in the form of securities. Last year community foundations received more than $40 million in gifts of appreciated securities.
The Foundation of Greater Montreal is a non-profit charitable organization dedicated to promoting the well-being of the Greater Montreal community. It establishes and pools charitable gifts of many donors to create permanent, income earning endowment funds – a nest egg that will always be there for the community. The FGM offers donors many options. They may set up a permanent endowment in the field of interest of their choice (health, arts and culture, education, social services, the environment) or for the benefit of a cause or organization they care about.
For further information:
Foundation of Greater Montreal