Connie Lunde Register file photo

Alberta Catholic charities critical of cut to provincial tax credit

By  Thandiwe Konguavi, Canadian Catholic News
  • April 26, 2015

EDMONTON - Catholic charities are crying foul at the recent Alberta budget cut to the tax credit for charitable donations. 

Once among the highest in the country, the credit has been reduced to 12.75 per cent from 21 per cent for donations of more than $200 — meaning less incentive to give money to charity, including the Church.

The province is looking at ways to tighten its belt as Alberta deals with the freefall in oil prices and its corresponding affect on provincial revenues. The province is running a deficit of $5 billion due to reduced oil revenues.

“I’m disappointed that the Alberta government would choose to do that,” said Connie Lunde, director of development at the Edmonton Archdiocese. “For Canada, Alberta’s was the most generous tax credit for charitable giving so it is disappointing that that’s one of the ways they want to save money.”

Those Albertans who donate to charity (and use the tax deduction) donate more per capita than anywhere else in Canada, and the giving is slowly increasing. However, the recent budget introduced by Conservative Premier Jim Prentice stated the credit has had “limited success” in encouraging higher total donations since it was increased in 2007.

The government added that decreasing the credit to 12.75 per cent will save $90 million annually — a conclusion Ted Bosse, a member of the fundraising committee for Edmonton’s Corpus Christi parish, finds “unconscionable and shortsighted.”

“I don’t believe that the direct attack on charitable donors is going to net the government any increased position because for every dollar they save in terms of tax rebates to charitable gifters, they’re going to increase the social cost of the province by probably $1.50.” 

In Alberta, donations over the first $200 used to receive a 50-per-cent tax credit when combined with the 29-per-cent federal tax credit for charitable giving.

With the cut to the provincial tax credit from 21 per cent to 12.75 per cent, Albertans will now have a combined tax credit of 41.75 per cent for charitable gifts.

“Charitable donations will, I’m convinced, they will go down, because there’s something beautiful about saying 50 per cent and when you have to start saying ‘Not quite 50 per cent’ now, it makes a difference,” Bosse said.

However, Lunde said many donors are not even aware of the tax credit when they give.

“Overall — not just within churches or religious organizations but across the general population — tax credits are a very low motivation for giving. It’s very low on the totem pole for reasons to give,” she said.

For those who are aware of the tax credit, the reduction for charitable donations will especially impact donors who have made multi-year pledges for major capital campaigns such as the new Corpus Christi Church, said Bosse. Construction on the church is well underway, with nearly $6 million of the committee’s $14-million target raised to date, including a number of five-year pledges.

“People have done their financial gifting planning based on a certain tax reality,” said Bosse.

The tax benefit that some people with normal incomes get for their contributions is part of what allows them to contribute as much as they do, he said.

Gerry Turcotte, president of St. Mary’s University in Calgary, said the cut in the tax credit will directly affect donors across all levels of the giving spectrum.

“Needless to say, we are disappointed at this decision,” Turcotte said in an e-mail. “We can only hope that the government reconsiders this decision, and that donors continue to support institutions like ours at such a difficult time.”

Bruce Klanke, vice president of community engagement at Catholic Social Services, said he is optimistic the reduction of the tax credit for charitable donations will not hurt the agency’s fundraising campaigns. Donors to CSS are mainly motivated by their desire to help vulnerable people, Klanke said, adding he doesn’t expect the change to have a significant negative impact on donations.

“Our donors share our mission of providing for those most in need and in being the hands of Christ to them,” he said.

Donations at the agency have remained steady over the years despite previous changes in the tax credit, he said.

“So I can’t see a strong link between donation levels and the tax credit, but that said, we just don’t know.

“We’re going to have a year that’s going to be tough economically and that’s going to have some taxation change so we’ll see how the numbers are affected but I think people will remain generous and they will continue to give.”

(Western Catholic Reporter)

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