Canada's Charitable Tax Credit 

Canada has one of the most generous charitable tax regimes in the world.

A non-refundable tax credit is provided for donations by individuals while a business may claim a tax deduction.

The income tax credit is a combined federal and provincial credit with a $200 threshold. Cumulative donations of $200 or less during the year earn a federal tax credit of 15 percent, plus a provincial credit at the lowest marginal tax rate.

All donations over $200 earn a federal credit of 29 percent plus a provincial credit at the highest marginal tax rate. Exceptions are Alberta, New Brunswick, Quebec and Ontario where the provincial portion of the credit is calculated differently.

How does Canada's generous tax credit add up?

For gifts up to $200 in Nova Scotia:
Federal tax credit - 15 percent
Provincial tax credit - 8.79 percent
Total credit - 23.79 percent

For gifts over $200 in Nova Scotia:
Federal tax credit - 29 percent  
Provincial tax credit - 21 percent *
Total credit - 50 percent

* Rates in other Atlantic Canadian provinces are slightly lower.

Effective January 1, 2016, the 29 percent federal rate will increase to 33 percent on the lesser of the amount of donations made in excess of $200, and the individual's taxable income over $200,000.

Need an example?

Susan’s taxable income in 2016 is $235,000. She contributes $50,000 in charitable donations. The new 33 percent donation federal tax credit rate applies to $35,000 of the donations made (the amount equal to Susan’s taxable income over $200,000), while the 29 percent rate applies to the remaining $14,800 of donations (above the first $200). The 15 percent rate remains on the first $200 of donations.

The provincial tax credit will be added to the above, which in Nova Scotia is 8.79 percent on donations up to and including $200, and 21 percent on the remaining donations.

First Time Donor Super Credit
Donation limits
Donors may claim up to 75 percent of net income for charitable gifts made during their lifetime. If there is a capital gain triggered by the gift, the limit is increased by 25 percent of that gain. For gifts left in the will, the limit is 100 percent of net income in the final two years of life. Until the 2017 tax year, first-time donors may claim an additional federal tax credit of 25 percent on up to $1,000 of cash donations. A first-time donor is someone who has not claimed a charitable donation tax credit in any of the five preceding tax years. The super credit can be shared with a spouse or common-law partner. The total amount of donations by both individuals claimed for the super credit cannot exceed $1,000.

Split Receipting
A charitable gift can be claimed for tax purposes even if the donor receives a material benefit from the gift. This benefit is referred to as an advantage and must be shown on the tax receipt. The value of the advantage is deducted from the value of the tax receipt. The advantage must not exceed 80 percent of the fair market value of the property transferred. This opens up planning opportunities for gifts such as a bargain sale of real estate.


Have questions? Contact us:

Charles O'Neil: 902 442 7196
Lori Scott: 902 442 7199
Katharine Berrington: 902 442 7146

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Resources for your practice

Professional Advisors Guide
A guide for financial advisors - CAGP
Ten articles that will make a difference in your practice.

Survey and report
CAGP report link
Understanding advisors' approaches and clients' perspectives.

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