Bill C-239: An Act to amend the Income Tax Act (charitable gifts)

Short Title Income Tax Act Coordinating Amendments First Session, Forty-second Parliament, 64-65 Elizabeth II, 2015-2016 HOUSE OF COMMONS OF CANADA BILL C-239 An Act to amend the Income Tax Act (charitable gifts) FIRST READING, FEBRUARY 25, 2016 Mr. Falk 421169 SUMMARY This enactment amends the Income Tax Act to increase the tax deduction an individual is entitled to in a taxation year with regards to charitable gifts to registered charities. Available on the Parliament of Canada Web Site at the following address: http://www.parl.gc.ca 1st Session, 42nd Parliament 64-65 Elizabeth II, 2015-2016 HOUSE OF COMMONS OF CANADA BILL C-239 An Act to amend the Income Tax Act (charitable gifts) Preamble Whereas federal tax credits for political contributions far exceed federal tax credits for donations to registered charities in Canada; Whereas Canadians are among the most generous people in the world and yet the percentage of Canadians donating to charities has been on a long-term decline; Whereas Canadian charities, both secular and faith-based, deliver critical social support for our communities and are well-equipped to remove some of the burden placed on government social services; And whereas there exists within the current charitable donation tax structure an unequal financial incentive to donate to political parties over registered charities; Now, therefore, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows: Short Title Short Title 1 This Act may be cited as the Fairness in Charitable Gifts Act. R.‍S. 1985, c. 1 (5th Supp.‍) Income Tax Act 2 (1) Subsection 118.‍1(1) of the Income Tax Act is amended by adding the following in alphabetical order: total charitable gifts to a registered charity, of an individual for a particular taxation year, means the total of all amounts each of which is the eligible amount — to the extent it is not otherwise included in determining an amount that is deducted under this section in computing any individual’s tax payable under this Part for any taxation year — of a gift (other than a gift any part of the eligible amount of which is included in the total cultural gifts or the total ecological gifts of any individual for any taxation year) that is made (a) to a registered charity after 2015, (b) in a taxation year that is not a year for which an amount is deducted under subsection 110(2) in computing the individual’s taxable income, and (c) if the individual is (i) not a trust, (A) by the individual, or the individual’s spouse or common-law partner, in the particular year or any of the five preceding taxation years, (B) by the individual in the year in which the individual dies if the particular year is the taxation year that precedes the taxation year in which the individual dies, or (C) by the individual’s graduated rate estate if subsection (5.‍1) applies to the gift and the particular year is the taxation year in which the individual dies or the preceding taxation year, or (ii) a trust (A) by the trust in the particular year or any of the five preceding taxation years, or (B) by the trust if the trust is a graduated rate estate, subsection (5.‍1) applies to the gift and the particular year is the taxation year in which the gift is made or a preceding taxation year of the estate; (total des dons de bienfaisance à un organisme de bienfaisance enregistré) (2) The formula in subsection 118.‍1(3) of the Act is replaced by the following: (A × B) + [C × (D - B)] + E (3) The description of B in subsection 118.‍1(3) of the Act is replaced by the following: B is the lesser of $200 and the individual’s total gifts for the year calculated without taking into account the individual’s total charitable gifts to a registered charity; (4) Subsection 118.‍1(3) of the Act is amended by striking out “and” at the end of the description of C and by replacing the description of D by the following: D is the individual’s total gifts for the year calculated without taking into account the individual’s total charitable gifts to a registered charity; and E is, with respect to the individual’s total charitable gifts to a registered charity for the year, (a) when that total does not exceed $400, 75% of that total, (b) when that total exceeds $400 and does not exceed $750, $300 plus 50% of the amount by which that total exceeds $400, and (c) when that total exceeds $750, $475 plus 331/3% of the amount by which the total exceeds $750. Application (5) Subsections (1) to (4) apply to gifts made after 2015. Coordinating Amendments Bill C-2 3 If Bill C-2, introduced in the 1st session of the 42nd Parliament and entitled An Act to amend the Income Tax Act, receives royal assent, then, on the first day on which both section 2 of that Act and section 2 of this Act are in force: (a) the formula in subsection 118.‍1(3) of the Income Tax Act is replaced by the following: A × B + C × D + E × F + G (b) the descriptions of D, E and F in subsection 118.‍1(3) of the Act are replaced by the following: D is the lesser of (a) the amount, if any, by which the individual’s total gifts for the year exceeds $200, calculated without taking into account the individual’s total charitable gifts to a registered charity, and (b) the amount, if any, by which the individual’s amount taxable for the year for the purposes of subsection 117(2) exceeds the first dollar amount (as adjusted for the year in accordance with section 117.‍1) referred to in paragraph 117(2)‍(e); E is 29%; F is the amount, if any, by which the individual’s total gifts for the year exceeds the total of $200, calculated without taking into account the individual’s total charitable gifts to a registered charity, and the amount determined for D; and G is, with respect to the individual’s total charitable gifts to a registered charity for the year, (a) when that total does not exceed $400, 75% of that total, (b) when that total exceeds $400 and does not exceed $750, $300 plus 50% of the amount by which that total exceeds $400, and (c) when that total exceeds $750, $475 plus 331/3% of the amount by which the total exceeds $750. Published under authority of the Speaker of the House of Commons