Issuance of Tax Receipts for Toronto 2000

The Economic Development Committee recommends the adoption of the following report (September 11, 1998) from the City Clerk:

Recommendation:

The Millennium Task Force on September 9, 1998, recommended to the Economic Development Committee, and Council, the adoption of the report, dated September 3, 1998, from the Project Manager, Millennium Task Force, recommending:

"That the Treasurer and Chief Financial Officer, upon receipt of donations to the City which are accompanied by a request that the City use such monies to support Toronto 2000, report to City Council for instructions on the disbursement of any such monies.

Background:

The Millennium Task Force had before it a report, dated September 9, 1998, from the Project Manager, Millennium Task Force, respecting the Issuance of Tax Receipts for Toronto 2000.

The Millennium Task Force further reports having received a communication from Mr. E. McCullough, Executive Director, Toronto 2000 with regard to the subject matter.

(Report dated September 3, 1998, addressed to the

Millennium Task Force, from the Project Manager)

Purpose:

To address the request from Toronto 2000 respecting the issuance of tax receipts for individuals, businesses and organizations who may choose to make a donation to Toronto 2000.

Recommendation:

That the Treasurer and Chief Financial Officer, upon receipt of donations to the City which are accompanied by a request that the City use such monies to support Toronto 2000, report to City Council for instructions on the disbursement of any such monies.

Background:

Under the authority contained in the Income Tax Act in accordance with Sections 110.1 and 118.1, persons who make unconditional gifts to Canadian municipalities may receive a receipt from the municipality which is accepted by Revenue Canada as deductible for income tax purposes. If however, monies are paid to the City with a written condition, that same are to be used to support Toronto 2000, then such gifts may be considered "conditional", and therefore not qualified to receive a charitable receipt from the municipality for income tax purposes. Accordingly, since the gift to the Municipality must be unconditional to be tax deductible, the desire of the donor that the donation be applied to support Toronto 2000 should be limited to a request (i.e., rather than a requirement). In addition, City Council will need to make a determination that supporting Toronto 2000 is in the municipal interest to authorize that municipal funds (to the extent received in such gifts) be used to support Toronto 2000.

Staff had the opportunity to meet with the Finance Department to discuss the possibility of providing tax receipts for individuals, businesses and organizations that may choose to make a donation to Toronto 2000. The request to give this consideration came from Toronto 2000, and is attached.

As a Canadian Municipality the City of Toronto is in a position to issue tax receipts for funds raised in the form of donations. Council is at liberty to determine that the funds are being raised for a legitimate need, and may determine with how the funds raised are expended.

Toronto 2000 has requested that funds raised through donations potentially be receipted for income tax purposes by the City. This is possible in the event that the donations are made payable to the City of Toronto and are accompanied with a request that the funds be allocated to Toronto 2000. The City can then issue the tax receipt, and then determine how the amount donated is to be disbursed.

Administrative considerations include whether or not there will be large numbers of receipts that need to be issued thereby requiring significant staff time. It is difficult to determine at this time, but Toronto 2000 anticipates that the majority of funds raised will be through corporate sponsorships dollars as opposed to donations, and therefore would not require receipts.

The disbursement of the funds raised can be dealt with on a donation by donation basis, or City Council could direct, in advance, that all funds raised with the accompanying request by the donor that said funds be forwarded to Toronto 2000, shall all be disbursed to Toronto 2000.

The Task Force is being asked to consider the request by Toronto 2000 to issue tax receipts to donors. Depending on the decision of the Task Force, the request and recommendation will need to forwarded to Council for approval.

(A copy of the communication (August 11, 1998) from Mr. Ernie McCullough, Toronto 2000, attached to the foregoing report, was forwarded to all Members of Council with the agenda of the Economic Development Committee for its meeting on September 18, 1998, and a copy thereof is on file in the office of the City Clerk.)