What's New from the Charities Directorate of CRA
October 18, 2016
CRA has released a letter which discusses whether improvement districts, particularly in British Columbia, would be considered municipal or public bodies performing a function of government for the purpose of paragraph 149(1)(c) and therefore able to issue donation receipts as a qualified donee. CRA determined that improvement districts could qualify as a municipal or public body performing a function of government because they have a governance function, and exercise powers similar to those of municipalities (whether providing one or several services to the public). Here is a copy of the full CRA letter.
October 08, 2016
Blumbergs has created a very interesting new website called CharityData.ca. Here is a short video which provides an overview of this powerful tool with information on over 86,000 Canadian registered charities with up to 10 years historical information on each registered charity. This tool will be particularly important for donors, funders, journalists, volunteers, those staff responsible for financial management and regulators.
October 04, 2016
Imagine Canada has put out a very interesting report on a survey of Canadian charities and their answers relating to political activities. The Sector Monitor report is prepared by David Lasby of Imagine Canada and is well worth reading. One of the conclusions was "Likelihood of reporting negative effects increased with intensity of engagement in public policy. However, while negative effects are common, this does not appear to have resulted in decreased engagement in public policy."
September 30, 2016
Currently there are only two organizations on the "List of foreign charities that have received a gift from Her Majesty in right of Canada". They are the Aga Khan Foundation and the Woodrow Wilson International Center for Scholars, both of which were off the list and now are on again. No rhyme or reason why these groups are picked out of millions of foreign ngos. Meanwhile Auschwitz-Birkenau Foundation, The Rhodes Trust, and the Bill, Hillary & Chelsea Clinton Foundation are no longer on the list. Seriously this list needs a rethink and greater transparency.
September 27, 2016
The CRA today launched its political activity consultation. It reinforces the importance of charities being engaged in the political process. The CRA is looking for feedback on the rules and CRA's guidance. People or organizations have until November 25, 2016 to provide comments. We have provided a large amount of documents and analysis on the issue of charities and political activities in our political activities and Canadian charities directory.
September 27, 2016
The Canadian Charity Law Association is delivering some upcoming webinars. Registration is free but space is limited.
September 26, 2016
The CRA has issued a media advisory that the "Honourable Diane Lebouthillier, Minister of National Revenue, will launch public consultations to clarify the rules regarding the involvement of registered charities in political activities." She will make the announcement tomorrow, Tuesday, September 27, 2016 in Ottawa. This consultation will give the public an opportunity to express their views on charities and political activities.
We have provided a large amount of documents and analysis on the issue of charities and political activities in our political activity directory. We will be helping various organizations with their discussions and submissions on this important topic.
September 24, 2016
We recently obtained a copy of the CRA analysis of charities that disclosed on the T3010 they did political activities. In a note from Bryan McLean, Director of Policy, Planning and Legislation Division of CRA to Cathy Hawara the then current Director General of the Charities Directorate, Mr. McLean includes a summary of the percentage of Canadian charities that identified on the T3010 that they conducted political activities and also the names of those charities.
September 20, 2016
The work that charities do is extremely important to our society, so it is vital that various stakeholders, such as the public, the media, the government, donors, employees, boards, donors and others. have access to key information on what the charity is doing and how it is doing it. In general transparency will ultimately increase public trust and confidence in the sector by making the public more informed about the work of charities and making it more difficult for people to misuse charities. However, from a legal perspective registered charities have few requirements in terms of transparency. Registered charities must file a T3010 Registered Charity Information Return with a financial statement and various schedules with the CRA every year.
September 15, 2016
The Liberal Government has made some noises about modernizing charity law. Who could be opposed to modernization? As there is no idea as to what "modernization" means, it has opened up all sorts of calls for changes to charity law in Canada - many of the ideas would be expensive, counterproductive, stifling, or ultimately destroy the positive reputation of the charity sector. Wikipedia defines a Pandora's box as "a process that generates many complicated problems as the result of unwise interference in something." Although only time will tell, it appears that "modernizing charity law" has a small upside and a very large downside.
September 10, 2016
Here is a copy of the CRA Compliance Framework for Files with Identified Political Activities from the Charities Directorate of the CRA. It is dated October 9, 2012. It provides some answers to some of the questions around how were charities identified for audit. Next week we will post a follow up document namely the "Assessment of Charities Directorate Political Activities Audit Program against October 2012 Compliance Framework".
September 07, 2016
Here is a copy of a CRA Powerpoint presentation slide deck on the Regulation of Charities - Overview - September 2014. It provides some useful information including the CRA's audit plan. For example, the audit plan shows that CRA planned on auditing in 2014/15 32 registered Canadian amateur athletic associations (RCAAAs). That is a pretty large number as there are only 119 RCAAAs in total. Political activity audits in that same period only accounted for 2% of CRA audits. Only 4% of charities audited resulted in CRA issuing an notice of intention to revoke.
September 07, 2016
In the notes section of a CRA presentation "Regulation of Charities - Overview" the CRA notes that in 2012 the amount of receipts issued was $14.28 Billion and that "the federal assistance for charitable donations in 2012 exceeded $2.9 ... Individuals also claimed over $1 billion in provincial and territorial tax credits billion". Therefore the cost of having a tax subsidy just for donations to registered charities is almost $4 Billion.
September 04, 2016
We have uploaded a copy of the "secret" CRA Ministerial Transition Briefing Binder provided to the new Minister of Revenue Diane Lebouthillier in November 2015. It was obtained pursuant to access to information. It covers the mundane matters such as roles and responsibilities and an introduction/overview to the CRA and goes on to discuss top issues that the CRA has to deal with including the "tax gap", FACTA, BC and Ontario housing market, charities and political activities, international collaboration on tax avoidance etc. The document as a whole provides a good civics lesson and context from the CRA perspective as to the role and responsibilities the CRA which is an important agency within the Federal government. It is searchable if you are looking for something in particular. Over the next couple of months I will try to release every Saturday another CRA document on our website.
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