Congratulations on an excellent editorial (“Getting a leg up on a legacy,” T.N.M. May 6-12) on an important policy issue. I have taken the liberty of sending a copy of your editorial to each of the 307 Members of Parliament and 102 senators. The message to the Liberal Party is that it should incorporate the elimination of capital gains on gifts of stock in a stand-alone bill now that the budget bill is being passed. The message to the Conservative Party is that it should include the measure as part of its election platform whenever the next election is called.
Your editorial captures all of the relevant information required to persuade MPs to back the proposal. All stakeholders in the charitable sector appreciate you taking the time to prepare and publish such a piece.
On a minor technical point, I recently learned that, based upon an analysis of gifts and shares from 1997-2000, the Department of Finance has calculated that a typical gift of shares has an adjusted cost base (ACB) of 40% of the market value. This assumption is used in calculating the tax revenue cost of a complete capital gains exemption.
Using the Finance Department’s assumption, under a complete capital gains exemption, the cost of a typical gift of stock would be born 40% by the donor, 40% by the federal government, and 20% by the provincial governments. The 60/40 sharing of costs between the donor and governments is certainly reasonable. (The 60% share born by governments is based on an ACB of 0%.)
Hopefully, the measure will be introduced in a stand-alone bill or in a budget immediately after the next election.
Donald K. Johnson
Toronto, Ont.
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