Yesterday the Minister of State (Finance) Kevin Sorenson and National Revenue Minister Kerry-Lynne D. Findlay announced that in order to reduce administrative costs associated with charitable lotteries and to allow charities to modernize their lottery systems, there is a proposal in Economic Action Plan 2014 which will amend the Criminal Code to allow charities to sell their lottery tickets online. The current system forces registered charities that conduct lotteries as part of fundraising to process all sales manually and send tickets by mail rather than electronically.
The full announcement is below:
"Harper Government Supports Charities to Create Stronger Communities
Charities to be allowed to conduct lotteries using modern technology
March 26, 2014 – Ottawa, Ontario – Department of Finance
Minister of State (Finance) Kevin Sorenson and National Revenue Minister Kerry-Lynne D. Findlay today highlighted the Government's investment in stronger communities through support for the charitable sector. In order to reduce administrative costs associated with charitable lotteries and allow charities to modernize their lottery systems, Economic Action Plan 2014 proposes to amend the Criminal Code to allow charities to sell their lottery tickets online.
Each year, charities in Canada raise hundreds of millions of dollars to support worthy causes through lottery sales. However, outdated legislation forces registered charities across Canada that conduct lotteries as part of their fundraising to process and activate all sales manually, and then send customers their tickets by mail rather than electronically. The use of new technologies will allow charities to use modern e-commerce methods for the purchasing, processing and issuing of lottery tickets and issuing of receipts to donors.
Prominent Canadian charities, including the Heart and Stroke Foundation, the Canadian Cancer Society, the Children's Hospital of Eastern Ontario Foundation and SickKids Foundation, report that allowing the use of new technologies could save millions of dollars each year in administrative costs for all Canadian charities that run lotteries. For example, the Heart and Stroke Foundation has identified significant savings in annual administrative costs related to the use of computers in its lottery alone. Charities will be able to use these savings to support their important work.
These actions build on a number of important steps the Government has taken since 2006 to support the charitable sector, including:
Providing a complete exemption from the capital gains tax for donations of publicly listed securities, donations of ecologically sensitive land to public conservation charities, as well as certain donations of exchangeable shares;
Introducing a temporary First-Time Donor’s Super Credit on cash donations of up to $1,000 made before 2018;
Reducing the administrative burden on charities by greatly simplifying the disbursement quota requirements, allowing charities to focus more time and resources on their charitable activities; and
Reassuring Canadians that their donations are used to support legitimate charities engaged in charitable activities by introducing several new measures that improve accountability and transparency in the charitable sector.
"Our Government is investing in stronger communities by supporting the important work of charities by reducing their administrative burden, encouraging charitable giving and allowing charities to use modern electronic tools."
- Kevin Sorenson, Minister of State (Finance)
"Our Government has made it a priority to reduce red tape for Canadians. Giving charities the opportunity to reap the benefits of e-commerce in their lottery activities helps free them to devote more resources to the important work they do in our communities—contributing to the social and economic well-being of all Canadians."
- Kerry-Lynne D. Findlay, Minister of National Revenue
"The charitable sector plays a critical role in ensuring Canadians have access to some of the best health care and public health services in the world. I am confident that charities like CHEO will continue to play a leading role in driving innovation and uncovering new ways for Canadians to live longer, healthier lives."
- Rona Ambrose, Minister of Health
"We applaud the Government's effort to amend the Criminal Code to enable charities to more fully utilize modern technology in the operation of our lotteries. This will clear the path for all levels of government to eliminate barriers that will improve the efficiency of our operations and improve the customer experience for our loyal supporters. It is a very positive step forward in gaming modernization and supporter satisfaction."
- Kevin Keohane, President and CEO, Children's Hospital of Eastern Ontario Foundation
"We were very pleased to see important health-related measures included in the 2014 federal budget announcement. In particular, the commitment to amend legislation to allow charities to use computers and other modern technologies to run our lotteries will result in millions of dollars in savings each year. We will be able to invest this money in life-saving research and programs that will tangibly improve the health of Canadians."
- David Sculthorpe, CEO, Heart and Stroke Foundation of Canada
"This amendment will result in substantial savings each year for Canadian charities that run lotteries. These funds can instead be used to support important programs, services and research that will benefit Canadians."
- Pamela Fralick, President and CEO, Canadian Cancer Society
"The amendment to the legislation will help SickKids Foundation to reduce lottery costs and also better serve the needs of our donors, resulting in increased investment in children's health."
- Ted Garrard, President and CEO, SickKids Foundation"
Director of Communications
Office of the Minister of State (Finance)
Department of Finance
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Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.