publication date: Jul 4, 2011
author/source: Terrance S. Carter
On June 6, 2011, the 2011 federal Budget (the "Budget") was
reintroduced by the Minister of Finance and was passed by the House of Commons the
next day. The original Budget was
tabled by the government on March 22, 2011 but it was not adopted as a result
of the dissolution of Parliament on March 26.
The 2011 Budget proposes sweeping changes to the regulatory
regime affecting registered charities and other qualified donees, and in
particular Canadian Registered Amateur Athletic Associations ("RCAAAs"). For an
overview of the various proposals contained in the Budget, refer to Charity Law Bulletin No. 245
This article outlines the differences in the Budget of June
6, 2011 compared to the proposed Budget from March 22, as well as providing a
brief summary of Canada Revenue Agency
(CRA's) recent commentary on the Budget.
Changes to the budget
The Budget remains the
same as the proposed March Budget except for the following changes.
559 The Budget now includes
Motion 559, which was adopted by the House of Commons on March 2, 2011. It
calls for the House Standing Committee on Finance to study charitable donation
incentives. The Government will ask the House Standing Committee on Finance to
undertake this study in the first session of this Parliament. What this review
will lead to remains to be seen, but the charitable sector will obviously want
to be involved in the ensuing discussion.
the section of the Budget, "Regulatory Framework for Registered Canadian
Amateur Athletic Associations - Exclusivity of Purpose and Function" the final
date for stakeholders to provide feedback on the introduction of an
‘exclusivity of purpose and function' test for RCAAAs has been changed. The
final date is now August 31, 2011 instead of June 30, 2011. Also, the date that
certain measures within the Budget will apply has been changed from ‘on or
after Budget Day' to ‘on or after March 22, 2011.
- Commentary by Canada Revenue Agency CRA recently posted an information resource for charities and qualified donees that are affected by the recent
changes to the Budget. CRA has stated that it will be responding to the Budget
changes as quickly as possible, and they are requesting comments from the
public in the process. CRA has listed several questions with answers on their Charities and Giving web pages dealing
with the relevant topics in the Budget affecting charities, and will continue
answering questions from the public through their Client Services Section.
there are still many questions concerning the Budget, the questions and answers
available on the Charities and Giving
web pages provide some clarification with respect to each of the matters
contained in the Budget previously outlined in Charity Law Bulletin
No. 245 referred to above.
the hard work of coming up with a reasonable interpretation of some of the more
difficult Budget provisions, in particular dealing with new governance
provisions on qualification requirements for directors, trustees, officers and
managers, still needs to be done. CRA may be seeking input from the charitable
sector, and it is a good opportunity for the charitable sector to express their
thoughts on these contentious issues.
The Budget remains
in essence the same as the proposed budget from March 22, 2011. All of the
proposals from the original Budget have reappeared in the current Budget, with
slight modifications. These changes will have a broad impact on the charitable
sector and bring sweeping changes to the regulatory regime affecting registered
charities, qualified donees and RCAAs in the future.
Terrance S. Carter is the managing partner with Carters
Professional Corporation, and Counsel to Fasken Martineau DuMoulin LLP on
charitable matters. He is a member of Canada Revenue Agency's Technical
Issues Group, past member of CRA's Charities Advisory Committee, Chair of the
National Charity and Not-for-Profit Section of the Canadian Bar Association,
and has been recognized as a leading expert in Canada by Lexpert and Best
Lawyers in Canada.
Mr. Carter is also editor of www.charitylaw.ca, www.churchlaw.ca and www.antiterrorismlaw.ca and
a consulting editor of Charities Legislation and Commentary 2009 Ed. Contact him