Lobbyists for charitable givers wanted a complete capital gains exemption for donations for publicly traded securities in this year’s federal budget. They didn’t get it.

In October, Ottawa announced its intention to provide permanent special tax assistance for donations of certain securities to public charities. This assistance was introduced as a temporary measure for a trial period, set to expire on Dec. 31, 2001.

“This measure has helped to significantly increase donations of securities over the past five years,” says Ottawa. A recent Deloitte & Touche report estimates that between 1996 and 1999 the average number of gifts of publicly traded securities increased 22-fold. The same report states that the average value of individual gifts increased to $251,626 in 1999, up from $13,022 in 1996.

Under the measure, only half of the income arising from donations of eligible securities to public charities is included for the purpose of taxable gains. Lobbyists were looking for a complete capital gains exemption.

Securities eligible for capital gains tax relief include: securities are shares; debt obligations and rights listed on a prescribed stock exchange; shares of the capital stock of mutual fund corporations; units of mutual fund trusts, interests in certain segregated fund trusts; prescribed debt of, or guaranteed by, Canada or a province.

For now, Ottawa is promising to continue to consult with the charitable sector on whether “broadening this measure beyond its current application” is warranted.