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The decline in charitable giving in recent years is one of the consequences of the short-term economic challenges facing the country. What should not be overlooked is the longer-term trend in which fewer Canadians provide the vast majority of the giving, volunteering, and civic engagement on which our social infrastructure relies. There are many critical issues facing the sector which deserve intelligent policy support, a matter made more urgent by the demographic, immigration, and urbanization trends which confront us. As governments consider the limits of its own capacity in dealing with social issues, the maintenance of a strong not-for-profit sector is important in order to maintain a prosperous and sustainable standard for all Canadians.
Although broader-reaching structural changes are urgent, immediate support is needed for charities to retain the capacity to meet the immediate demands for their services. We recommend the creation of an additional tax credits that will provide benefits primarily to that civic core of Canadians who are providing a hugely disproportionate share of the resources for the charitable sector, recognizing that those who already are giving are the most likely to respond to the short-term needs of this sector.
We recommend:
1. That in recognition of the immediate challenges facing Canadian charities, an additional category be added to the charitable tax credit to provide a 37% tax credit for donations greater than $450 per year from a taxpayer;
2. That steps be taken to initiate a national conversation regarding the rules and framework within which the not-for-profit sector functions within our society so that structural changes can be implemented which allow for this sector to continue its important contribution to our social fabric;
3. That a sunset clause of five years be introduced for the new tax category in order to emphasize the urgency of implementing a longer-term strategic solution.