Federal Government Launches Charitable Sector Consultation

Following the Federal Government’s announcement in the 2026 Spring Economic Update that it would modernize the charitable sector, the Department of Finance and Canada Revenue Agency (CRA) have launched a consultation to solicit feedback from stakeholders on these changes.

Key Consultation Questions

The consultation focuses on four areas, including:

1. The registration process for organizations applying for registered charitable status;
2. Digital service delivery, specifically the digital services offered by the CRA through My Business Account (MyBA);
3. Audit and compliance activities affecting charities, including topics like voluntary compliance and sanctions; and
4. Charitable revocation and objection processes for charities.

The consultation provides a series of specific, practical questions to guide stakeholders’ responses for each topic. For example:

Registration

• Are CRA resources about charitable registration clear and understandable?
• Is the online registration process easy? If not, what are they key problems?
• Are CRA decision letters clear and understandable?

Digital Service Delivery

• If your charity uses MyBA, is it simply and user-friendly?
• Are there particular areas that need improvement?
• If your charity does not use MyBA, why not?
• What challenges do you face in completing the T31010 and ensuring its accuracy?

Audit and Compliance

• What would help strengthen voluntary compliance and help charities better understand/meet their obligations?
• What would improve confidence in the procedural fairness, consistency and effectiveness of the audit process?
• Are intermediate sanctions (monetary penalties; suspending receipting privileges) an effective deterrent? Should they be applied more broadly?
• Should CRA provide more information to the public about its audit and compliance activities? What additional information should be available and when?

Revocation and Objections Process

• Do current revocation processes work well? What can be improved?
• Should CRA be able to take quick action against organizations misusing tax incentives or that present a risk to the tax system?

For the complete list of questions, be sure to review the Consultation Paper.

Consultation Paper

The consultation paper lists detailed questions and provides helpful background for the consultation topics. It also provides some interesting facts. For example, it notes the sector contributes $244B to GDP, which is about 8.4% of Canada’s overall GDP, and provides more than 2.5 million jobs. In terms of charity registrations, CRA received 3,077 applications in 2025-26, 79% of which were approved. As for the T3010, just under 31% of returns were filed electronically in 2025-26. And when it comes to audits, of 277 CRA completed in 2025-26, 52 resulted in revocation.

Opportunity to Contribute

Comments and feedback can be sent by email to charity-bienfaisance@fin.gc.ca with “Modernizing the Framework for the Charitable Sector” as the subject line, or by regular mail to:

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