Charity tax credit cut a disappointment

Written by Admin, published on March 31, 2015 Donate Today
Brian Foster, Executive Director

As an organization that relies on the support of Canadians in our mission to eliminate avoidable blindness, we are concerned by the cut to the tax credit for charitable donations in the 2015 Alberta provincial budget. We know that the generosity of Albertans won’t change, but it’s a worry that this will impact how businesses and organizations donate.

According to the Calgary Herald, the tax credit cut applies to all donations over $200, and the tax credit will be reduced from 21 percent of the donation, to 12.75 percent. The Herald estimates that this move will save the government of Alberta $90 million a year. Donations under $200 will not be affected.

At Operation Eyesight, good stewardship of donor funds is hugely important to us, so we understand the move by the government to set Alberta on a healthier fiscal path. But that $90 million is money that won’t be going back to the province’s most generous individuals, organizations and businesses, at a time when taxes and fees are also increasing.

For example, a donation of $1,000 in 2016 (above the $200 threshold) will result in a combined federal and provincial tax credit of only $417.50. This is a reduction of $82.50, compared to the $500 tax credit that a donation of $1,000 would have received in 2015.

We are concerned that this will affect not just Operation Eyesight’s work, but all non-profit and charity organizations that fundraise or operate in Alberta, and that the most needy, be they here in the province, or elsewhere in the world, will be the ones who are most impacted. We know our supporters donate because they want to give the gift of sight, not because they want tax savings, but the tax credit makes the decision to donate much easier.

This move reverses an Alberta tax credit increase that came in 2007, when the tax credit jumped from 12.75 percent to 21 percent. We hope that the tax credit cut is just a temporary measure, and we urge the provincial government to restore the 21 percent tax credit as soon as is fiscally possible.

Have questions? Contact your Alberta MLA.