Thank you, Mr. Chairperson.
Honourable members and guests, good afternoon. My name is Teresa Douma. I'm senior director of legal affairs for the Canadian Council of Christian Charities, also known as the four Cs. We are a member-based association of over 3,100 faith-based charities. Of these, 130 are umbrella charities themselves, representing 25 to several hundred charities. Our membership includes inner-city missions, such as the Yonge Street Mission in Toronto and the Union Gospel Mission in both Vancouver and Winnipeg; faith-based colleges and universities, such as Trinity Western University in B.C. and Redeemer University College in Ontario; relief and development organizations, such as World Vision Canada and Compassion Canada; and disaster relief organizations, such as MSC Canada and the Mennonite Central Committee of Canada. As of October 29, 2010, and based on the most recent T3010s available, collectively our members account for 15.4% of all receipted donations made it Canada.
Our association provides two key functions to our sector. We provide practical resources, and every year we answer over 18,000 calls and e-mails from our members on a wide range of issues, including finance, charity log, governance, and human resources. Our second key function is a charities certification program where we confer a seal of accountability on charities who meet our standards.
We bring three recommendations to the committee.
First, we recommend that the current tax treatment for donations of publicly listed securities be extended to donations of real estate and land. Donations of real estate could include vacant land, vacation, industrial, commercial, and residential investment properties. Principal residences would not be included, given that they are already exempt from capital gains tax. The charities could receive donated land as cash proceeds or in kind. If a donor gave cash proceeds, the donor would be exempt from capital gains tax only on that portion of real estate proceeds donated. The donor could also make an in-kind real estate donation that would enable the recipient charity to liquidate the property itself or retain the property for its own use. The donor would be exempt from capital gains tax on the entire value of the real estate gifted. Both ways of giving parallel the treatment of donations of publicly listed securities. This suggestion was included in this committee's recommendations last year, and we would suggest it merits being recommended again.
Second, we recommend an increase in the federal charitable tax credit from 29% to 42%. For example, if a donor has already made a gift of $200, a further gift of $300 at 29% would give the taxpayer a tax benefit of $87. However, a gift at the 42% rate would make that $300 gift provide a tax benefit of $126 instead of $87. This measure could work to increase support from core existing donors and encourage new ones. It would require a simple and straightforward adjustment to Canada's tax laws.
Third, related to donations of publicly listed securities, we recommend that a taxpayer receive a federal charitable tax credit of 42% on the adjusted-cost-base portion and keep the existing federal charitable tax credit of 29% on the capital gains portion. You will recall that on the capital gains part the taxpayer also benefits from not paying capital gains tax, and that's worth about 23%.
This proposal would align the benefit received from the cost portion of the gift more closely with the benefit received from the capital gains portion. Also, adjusting the tax credit from 29% to 42% on this cost portion would align it with the treatment of donations, as per our second proposal.