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's (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.

• Motion 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.
• Date changes Under 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.
  

Although 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.

However, 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.

Conclusion

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