Kelowna City Council is backing a plan that asks the federal government to provide tax breaks to companies that build affordable housing.

The proposal was initiated by Vancouver City Council.

A copy of a proposed letter to Finance Minister, Jim Flaherty, says in part, "We believe that providing significantly higher tax benefits for those philanthropists prepared to commit leadership to ending homelessness in fully justified."

The proposal goes on to say people are prepared to contribute to the solution if the appropriate tax incentives are provided.

"The federal government recognized this when it removed the capital gains tax from donations of publicly traded shares to charitable organizations and private foundations. These changes have resulted in significant increases in donations to charities and private foundations."

Kelowna City Councillor, Michele Rule, says the initiative is a key component to providing affordable housing.

"I think this is something that is really important. We have some wonderful philanthropists in this country, but they need to have some kind of a give back in order for it to make financial sense," says Rule.

"This isn't anything new, it's done in other countries in the world, and we're hoping that by moving it forward from our City and from other cities across Canada, that the federal government will look at those tax incentives."