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e-4155 (Taxation)

Initiated by Colin O'Leary from Kamloops, British Columbia

Original language of petition: English

Petition to the Government of Canada

  • Community Land Trusts exist across Canada, are a proven vehicle to combat the affordable housing crisis in perpetuity, but they are crippled by current Federal tax law in their ability to acquire land donations.
We, the undersigned, citizens and residents of Canada, call upon the Government of Canada to:
1. Make amendments and additions to the Income Tax Act to incentivize the donation of land to Land Trusts, for the purpose of developing affordable housing, by utilizing the same mechanisms as those already provided in the Act for individuals and corporations to make donations to ecological land reserves; and
2. Allow for donations of land to Community Land Trusts to be capital gains exempt in addition to a tax credit or deduction which can be provided in exchange for the land, based on the fair market value.

Response by the Deputy Prime Minister and Minister of Finance

Signed by (Minister or Parliamentary Secretary): The Honourable Chrystia Freeland

The Government of Canada recognizes the urgent need to make housing more affordable for Canadians and continues to consider policies in this respect. Canada’s National Housing Strategy is an $82+ billion plan to give more Canadians a place to call home. This includes $13.2 billion through the National Housing Co-Investment Fund, $2.5 billion through the Rapid Housing Initiative, $8.6 billion through the Canada Community Housing Initiative, and $618 million through the Federal Community Housing Initiative, among other initiatives.

The Government of Canada encourages support through the tax system for registered charities via the Charitable Donations Tax Credit (CDTC). Registered charities are established for a variety of socially beneficial purposes, including charities that provide affordable housing for low-income individuals, and those that provide adaptive and assisted housing for persons with disabilities and seniors.

Tax support for charitable donations in Canada has been recognized as being among the most generous in the world.  For individuals that donate more than $200, the CDTC provides tax assistance at 29% (and can be as high as 33% for those with taxable income over $235,675 in 2023). Provincial and territorial governments also provide charitable donation credits. When these are combined with federal assistance, most donors receive a total assistance of about 46% when annual charitable donations exceed $200. Donors can claim donations up to 75% of their net income, and any unused donations can be carried forward for up to five years.

While donations of real estate are not currently eligible for an exemption from capital gains tax, they are generally eligible for the CDTC, which will more than offset the tax payable on any such donation. This is because generally only 50% of the capital gain arising from the donation of land is required to be included in a donor’s income, whereas the CDTC is provided on the full fair market value of the disposition.

The Department of Finance is continually reviewing the tax system to ensure that it is fair and effective, including ensuring that tax incentives for charitable donations are as effective as possible. With respect to the specific suggestion to modify the Income Tax Act to provide the same treatment for donations to land trusts as exists for donations of ecologically sensitive land, this proposal will be taken under consideration by officials of the Department of Finance as it considers these important public policy issues.

Open for signature
October 31, 2022, at 10:44 a.m. (EDT)
Closed for signature
February 28, 2023, at 10:44 a.m. (EDT)
Presented to the House of Commons
Frank Caputo (Kamloops—Thompson—Cariboo)
March 31, 2023 (Petition No. 441-01274)
Government response tabled
May 15, 2023
Photo - Frank Caputo
Conservative Caucus
British Columbia