Announcing a plan to review and update the legal/regulatory framework governing charities
On page 107 of the Spring Economic Update 2026, there is a reference to “Modern Tax Rules for Charities.” Here’s the text of the announcement:
Modern Tax Rules for Charities
The Government of Canada’s tax incentives for charitable giving aim to mobilise private capital for public needs, creating an attractive environment for donors while supporting affordability, social security and our communities across the country. The government recognises that the charitable sector, and non-governmental organisations, are an important driver for the Canadian economy, create well-paying jobs and supplement the social safety net.
With advances in technology and digitisation, the government will undertake an exercise to modernise the framework for the charitable sector in 2026-27. As a first step, the government will undertake a consultation with key stakeholders and relevant agencies for them to provide feedback and align with best practices adopted by other G7 countries.
This statement from the 2026 Spring Economic Update signals that the Canadian federal government plans to review and update the legal/regulatory framework governing charities, but it does not provide any details.
The government is affirming that charities and NGOs are economically valuable — not just socially important — creating jobs and supplementing government services. If you review our Blumbergs’ Snapshot of the Canadian Charity Sector 2024 it is clear that the charity sector is a very large actor in the economy.
What they seem to be announcing is a consultation process in 2026-27 with charities, stakeholders, and government agencies to gather feedback on modernizing the regulatory framework. This seems to be a first step, not a final policy and no concrete changes are announced yet. The reference to technology and digitisation suggests the review may look at things like:
- How charities raise funds online / cross-border digital fundraising
- Crypto and non-traditional asset donations
- Digital service delivery by charities
- Possibly AI-related activities
- Exclusively online filing of the T3010, as is the case in the US for the Form 990. By the time CRA uploads some T3010s, they are already dealing with information that is 1 or 1.5 years old
- Current CRA rules around official donation receipts were designed for cheques, cash and receipting books – they are awkward in a digital-first environment
- Perhaps using the UK’s Gift Aid system rather than our donation tax incentive system. My understanding is that Gift Aid is far more streamlined digitally than our receipting regime
- Perhaps by improving the digital information provided by the CRA, other regulators make the legal purposes of charities available online. Perhaps having the financial statements filed by charities available online would mean that you don’t have to request them and wait months to receive them.
The G7 reference is interesting. They are suggesting that Canada’s rules align with best practices from other G7 countries (UK, US, France, Germany, Italy, Japan). I doubt that any of those countries have tax incentives for donations that are as generous as those in Canada. Some of them also have far better transparency than we have in Canada, such as in England and Australia.
But I increasingly feel that the lack of transparency is a feature of the Canadian charity system, not a bug. The framework is to provide very lucrative tax assistance for the wealthy and very limited opportunities for the public to understand what some charities are doing and to wonder or question why they are doing it; impolite questions such as why is around $200 billion in assets being held by private and public foundations when there is such great need in our society and around the world?
I always find the reference to “modernise” to be interesting. There are so many things we do in Canada in the charity sector that are by no means “modern.” Do we really want a modern charity sector? What does that mean? Some of the least modern aspects of charity in Canada are under provincial jurisdiction, like variation of restricted gifts. Will the Federal government encourage the provincial governments to get on board with modernization as well?
Re-published with permission from the Canadian Charity Law Blog.
Mark Blumberg is a lawyer at the law firm of Blumbergs Professional Corporation in Toronto and works almost exclusively in the areas of non-profit and charity law. He has a B.A. in Political Science from the University of Toronto, an LLB from the University of British Columbia and an LLM from Osgoode Hall Law School in Tax Law.
