- Charities - Enhancing Transparency and Accountability
- April 3, 2012
- Law Firm: Miller Thomson LLP - Toronto Office
The Budget proposes new rules relating to the ability of charities and registered Canadian amateur athletics associations (“RCAAAs”) to engage in political activities and the disclosure rules for their political activities. The principal change involves an expansion of the definition of “political activities” to include gifts made to other qualified donees where the purpose of the gift can be reasonably considered as supporting the political activities of the donee. The Tax Act permits a charity or RCAAA to engage in limited political activities that are ancillary and incidental to its charitable purpose, not exceeding 10% of the charity’s total resources. The revised definition of political activities has the potential to substantially expand the resources devoted to such activities.
The Budget also proposes to increase the reporting obligations of registered charities in respect of political activities and in particular with regard to foreign donors that may have supported political activities of a charity. The details of the increased reporting that will be required have yet to be determined.
The Budget also proposes to enable the CRA to suspend for one year the tax-receipting privileges of a charity or RCAAA that exceeds the limitations on political activities. Further, it is proposed that the CRA will be granted the authority to suspend the tax-receipting privileges of a charity or RCAAA that provides inaccurate or incomplete information in its annual information return until the charity provides the required information.