AMT – We all need to reach out to government. This week’s federal Fall Economic Statement confirmed that the AMT changes will come into effect on January 1, 2024, but indicated that there may be room for continued public input. The exact words read “Previously Announced Measures: The 2023 Fall Economic Statement confirms the government’s intention to proceed with the following previously announced tax and related measures, as modified to take into account consultations and deliberations since their release….including …Alternative Minimum Tax for High-Income Individuals…” There is no indication as to what is being modified.
Your letter should speak to your own authentic experience. It should include an introduction to you and the work that you do, and the causes that you donate to. Many people have a personal reason for giving to the causes that they support, and including that reason will be an asset in your letter. It will be beneficial to our advocacy for the government to understand how many charities, nation wide, benefit from the Charitable Flow-Through Share Donation format. Finally, it would be helpful to share how much, and how often you give, alongside what you will be able to give following the implementation of the proposed changes to AMT. It is safe to say that your ability to donate will be reduced by 30% following the implementation of the new AMT rules.
The federal government dismisses the AMT impact, stating that it affects only the top 1% of all individual taxpayers. Unfortunately, the same top 1% subject to AMT, fund 41% of all donations or $4.1 billion annually, according to publicly available data on the CRA website. Under the new AMT rules, donation tax credits, including for cash donations, are cut in half. Industry associations estimate the impact at no less than $500 million annually. We and many others believe that number is at least $1.5 billion or about a third less by those who donate up to their AMT limit including through the PearTree platform. That’s $1.5 billion less for hospitals, food banks, universities, and the myriad of social causes from homeless shelters to religious organizations.
The new AMT legislation is published but has not yet passed. You still have time to make your views known to the government. The rules are complicated and impacts are highly dependent upon your specific situation. Whether you contact your representative or not, please consider meeting with your tax advisor. Create a proforma 2024 tax return based on your anticipated tax return in 2024.
If your ability to give is reduced, planning may help but all the more reason to contact your member of parliament and reach out to the Finance Minister.
How to address the letter:
Please address your letter to the Hon. Chrystia Freeland, Deputy Prime Minister and Minister of Finance, and cc your local MP. You can find your local MP’s email address and mailing address online here by typing in your postal code. Mail may be sent postage-free to any MP.
Hon. Chrystia Freeland, Deputy Prime Minister and Minister of Finance
House of Commons
Ottawa, Ontario, K1A 0A6
If you would prefer to send your letter by email, Deputy Prime Minister Freeland can be reached at the following email address: chrystia.freeland@fin.gc.ca. Using the same link as noted above you can find your local MP’s email address.
If you give to a cause with an associated Minister, such as health, or the environment you should also cc the relevant Minister. You can find a full list of Cabinet Ministers here.
Key messages to include in your letter:
Your letter should speak to your own authentic experience. It should include an introduction to you and the work that you do, and the causes that you donate to. Many people have a personal reason for giving to the causes that they support, and including that reason will be an asset in your letter. It will be beneficial to our advocacy for the government to understand how many charities, nation wide, benefit from the Charitable Flow-Through Share Donation format. Finally, it would be helpful to share how much, and how often you give, alongside what you will be able to give following the implementation of the proposed changes to AMT. It is safe to say that your ability to donate will be reduced by 30% following the implementation of the new AMT rules.
PearTree is advocating for the following amendments to be made to the proposed changes to AMT, and it would help our advocacy to have these recommendations echoed:
- Retain 100% of the charitable donation tax credit in the calculation of the AMT
- Retain the current 0% inclusion rate for capital gains on donations of publicly listed securities
- Amend the AMT calculation such that the capital gain on flow-through shares calculated from a deemed nil cost up to the original purchase price not be included in the AMT;
We would appreciate if you could send us a copy of your letter so we can reference it in our advocacy efforts.
Please direct questions or comments to Alanna Clark, Vice President of Government Relations, by email: alanna.clark@peartreecanada.com.
