This article originally appeared on the Blumbergs website. It is excerpted with permission.
On March 28, Canadian Finance Minister Chrystia Freeland introduced Budget 2023—A Made-in- Canada Plan: Strong Middle Class, Affordable Economy, Healthy Future for the Liberal Government of Justin Trudeau.
Last year’s budget had some major initiatives relating to registered charities including qualifying disbursements, directed donation rules, disbursement quota changes and some additional transparency. This year’s budget does not appear to have any particular initiatives relating to the regulation of non-profits and charities. There is one reference to the word “charity” in a 270- page document. The government seems to be focused on admittedly important topics such as child care, green energy, food support for low-income Canadians, dental care, Ukraine, etc.
For a charity and non-profit sector which is between 8-12% of the total economy, and which has such great importance in the lives of Canadians, it is a little surprising that it has garnered so little attention. If one is dissatisfied with this result, and I assume some are not, it would be fair to say that there should be some soul searching about the government relations activities of the sector and the representation by umbrella organizations.
As we have noted before there were many proposals from the Senate and the ACCS that have been ignored by the Liberal government – although some of the proposals would probably cause more harm than good.
Transparency
We were disappointed that there was no mention of increased transparency in the area of non- profits and charities. Currently, CRA is very limited in what information they can provide on registered charities, and they cannot provide any information on non-profit organizations that are not registered charities. Unfortunately, the government is not doing much to address the fact that trust in the charity sector is plummeting in Canada, and it is partly due to lack of transparency. Without good transparency, it is unlikely that the public is going to trust charities. Having robust transparency discourages the sort of inappropriate behaviours as the media has extensively covered (including but not limited to Hockey Canada and Soccer Canada) and makes it easier to hold problematic non-profits and charities accountable. We should note that just yesterday, Soccer Canada put up 9 years of financial statements on the Corporations Canada website. They are supposed to be filed every year for soliciting corporations. Once every nine years is not a good model for non-profit governance, compliance and transparency.
Non-Profit Regulation
The regulation of non-profits that are not registered charities has not changed since 1917; despite discussions about changes to the NPO regime, there was nothing in the budget indicating that it is even being considered.
Qualifying Disbursements and Donor Directed Gifts
Last year’s budget had some provisions on Qualifying Disbursements and Donor Directed Gifts. There were some concerns around these provisions including ambiguity with respect to these new rules, and we were wondering whether there would be any tweaks or revisions in this Budget. There were not.
Read the full article here.
Mark Blumberg, Jessie Lang and Tina Garbas-Tyrrell are lawyers at Blumbergs Professional Corporation. To find out more about legal services that Blumbergs provides to Canadian charities and non- profits please visit www.CanadianCharityLaw.ca
Blumbergs also maintains Canada's largest charity information portal at www.CharityData.ca with up to 19 years information on every Canadian registered charity. The portal is free and the aim is to increase transparency in the Canadian charity sector.
This article is for information purposes only. It is not intended to be legal advice. You should not act or abstain from acting based upon such information without first consulting a legal professional.
