Just over a year ago, on November 30, 2022, the draft version of the guidance was released for public feedback.

So, What’s Changed?

In sum, the new guidance is better organized, provides some clarifications, makes clearer links between the guidance and the Income Tax Act requirements it is meant to reflect, and confirms the scope or limits of the guidance.

Let’s look at a few of the key changes.

Scope & Limits of the Guidance

The guidance is very clear about what it is and what it is not:

“This guidance is not law.”

This seems to directly address concerns that the guidance was creating obligations or expectations of charities that went beyond the scope of the ITA requirements. It does not create legal obligations but “recommends ways a charity can meet the Income Tax Requirements” [emphasis added].

Or, as the guidance states elsewhere:

“A charity does not have to follow our granting recommendations. It can show in its books and records that it has used other measures to meet the accountability requirements.”

This position is reflected in small, but important word changes throughout the document. For example, many “shoulds” are now “coulds” and “The grant-making process” is now “CRA’s recommended grant-making process.”

Similarly, the guidance repeats in several places that it tries to take a “reasonable, flexible, and proportionate” approach toward charities meeting the ITA requirements.

Clearer Links Between Guidance and ITA

Another concern was that the draft guidance used terms and ideas not contained in the ITA.

The final version does not eliminate the phrases and terminology that were at issue (e.g. “risk”, “accountability tools”, etc.) but it does better explain why and how CRA uses them and better links them to the ITA requirements.

For example:

• “Accountability requirements” means ITA requirements for making a grant
• “Accountability tools” means CRA recommended tools to meet the requirements
• “Due diligence” means steps taken to satisfy legal requirements for grants under the ITA
• “Grant” means a qualifying disbursement to a grantee organization as defined in the ITA
• “Risk” means the risk of grant resources being misused – misuse could compromise the charity’s registration and the public’s trust in the sector

Before getting into CRA’s recommendations, the guidance sets out the ITA accountability requirements. The key is that a charity ensures that the grant is exclusively applied to activities in furtherance of a charitable purpose of the charity and that the charity maintains documentation sufficient to demonstrate those requirements are met.

Next, the guidance includes a chart that lists ITA requirements, CRA’s interpretation of the requirements, CRA’s application and recommendation and where to find more details about each topic.

First requirement: disbursement (grant) furthers a charitable purpose of the charity

CRA interprets this to mean that charities can only make grants that further one or more of their own stated charitable purposes that fall within the four recognized categories (relief of poverty, advancing education, advancing religion, other purpose beneficial to the public).

Second requirement: the charity ensures disbursement (grant) exclusively applied to charitable activities

CRA interprets this to mean a charity must make sure the resources are used only for charitable activities that further its charitable purpose(s). CRA recommends charities use various accountability tools in a way that responds to the level of risk that the resources could be misused.

Third requirement: the charity maintains documentation sufficient to demonstrate the requirements are met

CRA interprets this to mean a charity must keep adequate books and records, and specific document for disbursements (grants). CRA recommends charities maintain documentation for each of these requirements in a way that responds to level of risk that the resources could be misused.

What is the Recommended Process?

These are essentially unchanged from the draft version, but the organization and flow of the guidance makes them easier to follow. Paraphrased, the steps are as follows:

How does the grant further your charity’s purpose?

• What are your charity’s purposes?
• What is the grant activity?
• What is the link between the two?
• Does the activity comply with the law?
• Does the activity meet the public benefit test?
• Does the activity provide unacceptable private benefit?
• Does the activity support terrorist activities? Does it fall within the humanitarian exemption in the Criminal Code?

With the exception of “what is the grant activity” and “what is the link between the two” the other questions are ones that charities need to ask of any new activity they undertake, whether the activity is their own, done with intermediaries, or through grant activities.

What is the grant’s risk level, based on factors impacting your charity’s ability to meet ITA requirements?

This means asking what risks exist that would impact your charity’s ability to ensure the grant resources are exclusively applied to charitable activities that further your charity’s own purposes.

Factors include:

• Your charity’s experience
• Grantee’s experience
• Purposes and governing documents of grantee organization *NEW*
• Governance structure of grantee organization *NEW*
• Grantee’s regulation and oversight *NEW*
• Private benefit concerns
• Grant activity *MODIFIED* (was Grant Activity Location)
• Grant amount
• Nature of resources granted
• Grant duration *MODIFIED* (low risk was defined as less than 1 year; now less than 2 years)

How much due diligence needs to be applied based on the risk?

This section first explores each accountability tool – what it is and how it helps a charity meet its requirements. For more information on each of these tools, see the heading “What are the Accountability Tools?”, below. It then sets out the level of work (“due diligence”) that CRA recommends for each tool, based on the level of risk attached to the particular grant.

Apply the relevant accountability tools in collaboration with the grantee

This section provides an example of how a charity and grantee work together so that the charity can meet its accountability requirements.

Document your due diligence

This section explains the general ITA requirement for charities to maintain adequate books and records. When it comes to grants, books and records need to allow CRA to determine whether they meet the accountability requirements, the grantee’s use of the resources can be verified, and that the resources were and continue to be used for purposes and activities set out in the grant’s terms.

What are the Accountability Tools?

Again, these are essentially unchanged from the draft version, but they have been slightly revised and reorganized. This section begins with an explanation of each accountability tool, noting how each is intended to help a charity meet accountability requirements. This is an update from draft language that said the tools helped to “manage” or “mitigate” risk.  Risk is addressed more fully in a chart that explains how the tools would apply to different levels of risk; the risk being that the grant would not be applied exclusively to activities that further charitable purpose(s).

Research and review of the grantee

This was called “due diligence review” in the draft. The substance has not changed. It refers to assessing and documenting information about the grantee and how that can be done.

Description of grant activity, including intended outcome and charitable purpose

Written agreement, including minimum standards, milestones, outcomes and budgets

Reporting plan, including final reports and interim reports (if suitable)

This was called “monitoring and reporting” in the draft. The intention behind a plan is to help a charity track and document whether the resources were used for the intended purpose.

Transfer schedule for longer-term or higher-risk grants (if suitable)

Separately tracked funds such as a separate ledger

Clarifications & Special Topics

Foundations

Foundations with a purpose only to make gifts to other qualified donees cannot make grants. Grants must further a stated common law charitable purpose within one of the four categories of advancing religion, advancing education, relieving poverty or other purpose beneficial to the public.

A standalone grant-making purpose would not fall within one of the four categories.

This means that foundations may need to amend their purposes in order to make grants.

Directed Gifts

The ITA (s 168(1)(f)) prohibits charities from accepting gifts that are expressly or implicitly conditional on the charity transferring it to anyone other than a qualified donee.

The guidance now provides separate examples of explicitly and implicitly conditional gifts. The implicitly conditional example is:

A charity includes the name of a non-qualified donee in its own name, purposes, or other formal documents, indicating this would be the sole recipient of any grants the charity makes. Any funds the charity receives from a donor could be implicitly conditional on the charity granting it over to the specific non-qualified done, and could jeopardize the charity’s registration.

CRA’s recommendation to avoid concerns about directed gifts remains the same:

• Donors can indicate program preferences, but ultimate authority on use of resources must rest with the charity
• Donors do not receive their donation back if the charity does not use it in the donor’s preferred way

Pooled Grants

Most of this section remains the same, but with slight language edits. For example, regarding written agreements the draft preferred “a written agreement be in place with all parties when charities engage in pooled grants.” The final version recommends “the charity sign onto at least one written agreement with all parties.”

Another revision is that the special accountability considerations for pooled grants no longer contains instructions that when “a written agreement is not feasible [for pooled grants] a charity should document the reasons in its books and records.”

Grants of Real Property

This section no longer starts with the presumption that a “grantee may .. transfer [the property] to another non-qualified done.” It also replaces references to generic risk with a focus on potential non-charitable uses and unacceptable private benefit.

The special accountability considerations for real property grants no longer contains a section for a transfer schedule or separately tracked funds. There is a new section for a reporting plan and more detail about the written agreement.

The reporting plan is meant to confirm that the grantee is using (and continues to use) the real property for the agreed upon charitable activities and purposes.

The written agreement elements were (sort of) addressed in the draft’s example but are clarified in the special accountability considerations in the final version.

The written agreement should include provisions:

• That if activities furthering the charity’s purpose no longer possible, grantee must get instructions from the charity to either:
  • Sell the property and return the proceeds; or
  • Transfer ownership to another party that can continue the activities
• That require the grantee to track profit from the real property
• That require profits earned are spent on the charitable activities

Grants and Anti-Terrorism Considerations

This section has been updated to include the humanitarian exemption and authorization framework recently added to the Criminal Code. These changes allow certain humanitarian activities in geographic areas that are controlled by terrorist groups.

What’s Next?

Now that we have the final guidance, we’ll update our Member Knowledge Base resources to reflect these changes.

It’s also important to remember that this guidance, while “final,” is not forever written in stone. It will be periodically reviewed and CRA always invites comments or suggestions on existing guidance.

The post CRA Releases Final Granting Guidance appeared first on CCCC Blogs.

Feedback

If you have comments about the draft, you can send your comments and suggestions by email, mail or fax. The deadline is January 31, 2023.

Contact details area available on CRA’s Feedback on policies and guidance page.

Summary of the Draft Guidance

The guidance is a long document, and we list the significant elements in detail below. The 5-sentence takeaway is that sufficient documentation for grants is not too different from the documentation charities are required to show when exercising direction and control. However, one very significant difference introduced in the draft guidance is that charities use a risk-based analysis to determine what is necessary in the specific circumstances. High risk scenarios naturally require more due diligence, greater formality and structure to a grant agreement, and grantee reporting. Low risk scenarios, on the other hand, require a lot less background work and need not be as formal. While CRA makes very strong recommendations, there is more flexibility in how charities can demonstrate accountability for grants.

Remind Me, What are Grants?

The ITA answers this question in s 149.1(1), as part of the definition of “qualifying disbursement.” A qualifying disbursement is any transfer of resources from a charity to a qualified donee (gift) or a non-qualified donee (grant) that meets certain conditions.

That means a grant is the transfer of resources to a non-qualified donee, also called a grantee.

All qualifying disbursements, whether a gift or a grant, must further a charitable purpose of the charity; the charity must ensure it is applied exclusively to charitable activities in furtherance of (one of) its charitable purpose(s); and, the charity must maintain sufficient documentation to demonstrate the first two conditions are met.

We’ve answered these and many more basic questions in our Member Resource, Qualifying Disbursements. You can also take a look at our past blogs. They’re all listed at the end of the post Bill C-19 Has Passed – Impact on Direction and Control.

What Does the Draft Guidance Tell Us?

The ITA tells us the legal definition of qualifying disbursements (including grants) but it doesn’t tell us everything we need to know about making grants, most importantly, what documentation will be considered sufficient by CRA when a charity makes a grant. The draft guidance fills in these gaps and provides some context for how this impacts charities and how they operate.

LANGUAGE OF GRANTS

The ITA uses the term “qualifying disbursements.” This term includes both gifts to qualified donees and making grants to non-qualified donees. Charities could already make gifts to qualified donees (other charities). This guidance focuses on grants to non-qualified donees (non-charities).

DIFFERENCES BETWEEN GRANTS & OWN ACTIVITIES (DIRECTION & CONTROL)

The guidance lists 7 differences between rules for grants and rules for ‘own activities’ (direction & control):

• Granting opens new opportunities and new ways to work
• Granting allows for a collaborative, rather than a hierarchical relationship between the charity and grantee
• Granting does not make the grantee a representative of the charity; it carries on its own programs
• Granting does not require that the activity be the charity’s initiative; grants can support existing activities by a grantee
• Granting does not require ongoing instructions from the charity
• Granting does not require the charity to exercise direction and control
• Granting focuses on risk and accountability

RELATIONSHIPS CAN CHANGE FROM INTERMEDIARY TO GRANTEE

The draft guidance recognizes that “a charity’s relationship with a non-qualified donee may evolve, and the charity can convert its relationship with the non-qualified donee (for example, from an intermediary to grantee relationship.”

How? A charity needs to document the “change in its books and records and be sure to meet all requirements at the time of the change.”

SUFFICIENT DOCUMENTATION FOR MAKING GRANTS

CRA’S FLEXIBLE APPROACH

Charities have to ensure and demonstrate in their books and records that it meets accountability requirements.

CRA is taking a “reasonable and flexible approach when determining whether a charity has met the accountability requirements.” The accountability tools CRA identifies are “not exhaustive and their suitability depends on the circumstances of individual grants.” Where charities use different tools, they need to explain why in their books and records. Charities should also use a consistent approach to making grants.

CRA’S RECOMMENDED PROCESS

There are four main steps:

1. How does the grant further your charitable purposes?
2. What is the grant’s risk level – low, medium or high?
3. What accountability tools should you use based on the risk level?
4. How should those accountability tools be applied to each grant?

STEP ONE: CHARITABLE PURPOSES

This should be a familiar and consistent part of a charity’s operational decisions: does the proposed project, activity, grant, etc. further one or more of your organization’s charitable purposes? If yes, how? Be sure to record these considerations and conclusions in your charity’s books and records.

STEP TWO: RISK ASSESSMENT

Risk factors (higher risk listed first) include:

• Charity’s experience – no, some, or significant grant experience?
• Grantee’s experience – new grantee, some, or extensive programming experience?
• Grant activity location – outside or inside Canada? Stable or unstable? Lack of, unreliable, or reliable infrastructure (banks, internet)? No, some, or extensive experience in that location?
• Grant amount – high ($25,000+), moderate ($5,000-$25,000), or low (up to $5,000)?
• Private benefit concerns – significant, some or limited/little concern?
• Nature of resources granted – susceptible to non-charitable use (cash, crypto, real property), somewhat susceptible (mix of cash and others) or not susceptible (textbooks, medical supplies)?
• Grant duration – long term with no end date, long term with an end date (1-2 years) or short term (less than 1 year)?

Where the risk level changes during the course of a grant, charities should re-visit their due diligence process to determine what changes, if any, should be made to the terms of the grant.

Some examples of increased risk include: financial collapse in nation/region of activity, poor quality grantee reports, discovering private benefit, change in grantee’s leadership.

Some examples of decreased risk include: financial stabilization, peace established in nation/region of activity, strong track record with a grantee, grantee exceeds expectations, decreased value in charitable resources.

STEP THREE: ACCOUNTABILITY TOOLS

Due diligence review of the grantee

For due diligence, the higher the risk, the more extensive the review needs to be.

What should charities assess? Charities should assess the grantee’s purposes and mission, programs, history, reputation, staff, volunteers, associated people or entities, experience and capacity to carry on the grant activity, and the potential use of the grant.

How can the review be done? Charities can do independent research, make in-person visits, have virtual meetings, request information from the grantee, review past grant outcomes, and read letters of reference/support.

What if you already have a working relationship with the grantee? Charities that have “already formed a successful working relationship with a grantee” may not need to conduct an “extensive” review.

What if you can’t do an extensive review? Charities “may wish to consult with experts, community leaders, or other charities” about the risks and document the steps it does take.

Description of grant activity

For grant activity descriptions, the higher the risk, the more detailed the written description needs to be.

What should charities describe? Charities should consider including the activity and charitable purpose(s) it furthers, location of grant operations, start and end dates, public benefit, how to address unacceptable private benefit, deliverables/objectives, any third parties the grantee will use to carry out the activity, and any accountability tools that will be used.

Where should the description be kept? Charities should keep the description in their books and records, review it with the grantee, and include it in any written agreement.

Written agreement

For written agreements, higher risk requires a formal agreement, whereas lower risk agreements can be simple.Where less than $5000, documentation alone is likely sufficient.

Why should charities use written agreements? It documents the grant, its charitable purpose and budget, it clarifies expectations, it confirms terms and conditions, and it keeps grants on track. CRA recommends that charities have a written agreement for every grant.

What about grants less than $5000? For non-recurring grants written agreements may not be required. For “very low risk circumstances” other documentation may be enough (emails, meeting minutes). If the grants will be ongoing (e.g. annually), CRA recommends a written agreement.

What if charities can’t use written agreements? The charity should explain the reason in its books and records and have other documentation.

What should charities include in written agreements? Charities can include a myriad of information in a written agreement: legal names and addresses, signatures of authorized persons, signing date, intention to make a grant (versus intermediary), description(s) of activity, charitable purpose it furthers, location of activity, start and end dates of funding/the relationship, reporting requirements, a right to inspect, periodic transfer of funds with and any applicable conditions, right to require return of unused resources, requirement of separately tracked funds, limit use of resources for only charitable purposes, effective date, and termination provisions.

Monitoring and reporting

For monitoring and reporting, higher risk requires detailed, written, and final (and possibly interim) reports. Lower risk would only need a simple, written, final report. CRA recommends that every grant require a final written report with supporting documentation (where appropriate).

What kind of monitoring and reporting should charities do? Monitoring and reporting could include final reports with documentation, interim reports, expense receipts, financial statements, records of phone, email, and video communications, photos and videos, audit reports, and records from on-site visits by charity staff.

What should a charity do with the reports? Charities should record in their books and records that they have reviewed the final reports, and briefly explain why they are satisfied with them.

Transfer schedule

For transfer schedules: higher risk requires a transfer schedule; it should likely be used for medium risk; and is a consideration for lower risk.

Why should charities use a transfer schedule? Charities should use a transfer schedule because it allows a charity to mitigate losses if resources are not used according to the agreement.

What if charities don’t use a transfer schedule? The reason should be recorded in charities’ books and records.

Separately tracked funds

For separately tracked funds, all levels of risk should have this in place.

Why should charities require separately tracked funds? Charities should require separately tracked funds because it helps them document use of the grant.

What does it mean to have separately tracked funds? Separately tracked funds does not require separate books and records or a separate bank account. Instead, it means that the grantee can track the funds with enough detail to report back to the charity. It is preferable if the grant can be separately tracked in the grantee’s books and records.

LIMIT ON GRANTS

The guidance confirms that charitable organizations can disburse no more than 50% of their income by way of gifts to qualified donees (other charities). Disbursing more means that the charity would be re-designated as a foundation.

The guidance also confirms that charitable organizations can disburse unlimited amounts by making grants to grantees (non-qualified donees).

PROHIBITION ON DIRECTED DONATIONS: CLARITY

The ITA requires that charities cannot accept gifts that are expressly or implicitly conditional on the charity granting it to a specific recipient.

The guidance confirms that “provided a charity ensures it retains authority on the use of its resources, it will not be considered to be engaged in directed giving,” even if a donor has indicated a preference for how the donation will be used.

How does a charity ensure it retains authority on the use of its resources? Charities should clearly communicate that (1) they retain ultimate authority on how it uses its resources, and (2) they will not return the donation to donors if the donation is not used the way the donor prefers.

What’s the point of this prohibition? The purpose is to prevent a charity from existing “solely … as a fundraising arm in Canada of an affiliate organization in another country.”

REPORTING GRANTS

The ITA already set out the requirements for reporting: for every grant over $5,000, the granting charity must report the name of the grantee, the purpose of the grant, and the total yearly amount granted to the grantee.

What about security concerns? Charities can apply to CRA to request that some of the information not be publicly disclosed “if its release would place the charity, grantee, their staff, or volunteers in danger.”

POOLED GRANTS

The draft guidance outlines specific accountability tools that are expected of charities participating in pool grants. It also provides additional factors to determine whether the pooled grant is higher risk. If charities cannot use the recommended accountability tools, CRA “recommends approaching pooled grants cautiously” and that legal advice may be prudent.

GRANTING CHARITABLE GOODS

The draft guidance outlines specific accountability tools that are expected of charities granting charitable goods. It is a low-risk activity so long as the resources could only reasonably be used for charitable purposes.

GRANTING REAL PROPERTY

The draft guidance outlines specific accountability tools that are expected of charities granting real property. It is a high-risk activity because it is very difficult to ensure that the property will be permanently used for charitable purposes. Where the risk of non-charitable use is “greater than the benefit that may be provided” CRA’s position is that the charity should not grant the property. CRA also recommends contacting the Charities Directorate before granting any real property.

The post CRA Draft Guidance on Making Grants to Non-Qualified Donees appeared first on CCCC Blogs.

Bill C-19 Budget Implementation Act (BIA) Changes: Qualifying Disbursements

The BIA amends the Income Tax Act (ITA) to allow charities to work with non-charities. How? It adds a new category of permitted resource expenditures called “qualifying disbursements.”

To make “qualifying disbursements” charities need to maintain documentation sufficient to demonstrate:

1. The purpose for the disbursement and
2. That it is exclusively applied to charitable activities in furtherance of a charitable purpose

This brings the BIA more or less in line with Bill S-216, Effective and Accountable Charities Act.  The focus is on the purpose of the disbursement and ensuring the activities are charitable, rather than a focus on means of control.

The BIA does not eliminate “own activities” and direction and control from the ITA like Bill S-216 proposed. Instead, as explained above, it creates a new category of “qualifying disbursements.”

Bill C-19 Budget Implementation Act (BIA) Changes: Reporting

The BIA requires charities to report on every qualifying disbursement greater than $5,000, including the name of the grantee organization, total amount received and the purpose of the disbursement. As others have noted, this section creates problems because it requires disclosure of potential sensitive information (e.g. charities working in areas with security risks or potential persecution).

Bill C-19 Budget Implementation Act (BIA) Changes: No Directed Giving

The BIA prohibits charities from receiving donations that are expressly or implicitly conditional on the charity making a gift to another organization other than a qualified donee. As others have noted, this section creates problems because it precludes charities “from fundraising for programs being run by grantee organizations.”

What happened to Bill S-216?

Bill S-216 is repealed.

What’s Next?

Now that the BIA has passed, CRA will undoubtedly prepare guidance as to what it considers “sufficient documentation.” Charities need this clarity. It helps ensure compliance and consistency.

In an earlier version of the BIA, there was a long list of requirements charities had to meet in order to make qualifying disbursements. The Finance Committee deleted the list at the urging of the charitable sector. Even though the mandatory list is gone, we shouldn’t be surprised to see some of the same elements appear in a guidance document.

What Can You Do? Tell Us What You think!

What do you want to see (or not!) in CRA Guidance? What would be most helpful for you? Do you think a $5000 threshold for reporting is reasonable? We’re talking about this right now in The Green – join us! Your input and feedback is essential and will help us represent you – our members – as we have opportunity to engage with government on this topic.

Looking for More? Check out our Direction & Control series…

Direction and Control – Advocacy Update, Bill C-19 Amendments (6 June 2022)

Direction and Control – Advocacy Opportunity (26 May 2022)

Budget Implementation Act, Bill S-216 and Direction & Control (6 May 2022)

Update: Bill S-216 on Direction and Control (3 March 2022)

Bill S-216 on Direction and Control – Different Name, Same Aim (9 December 2021)

What’s Happening with Bill S-222? (30 June 2021)

Bill S-222: From Direction and Control to Reasonable Steps (10 February 2021)

For more information on direction and control, see our Resource Page in CCCC Knowledge Base.

The post Bill C-19 Has Passed – Impact on Direction & Control appeared first on CCCC Blogs.

The Finance Committee reviewing the BIA listened to concerns from the charitable sector, including those expressed in an open letter that CCCC and many of you signed. The result was amendments that improve the BIA.

Bill C-19 Budget Implementation Act vs Bill S-216 Effective and Accountable Charities Act

Recall that Budget 2022 pledged to make changes to the Income Tax Act (ITA) that were “in the spirit” of Bill S-216. But when the BIA was released, the proposed changes looked very different from Bill S-216.

In brief, the two proposals for change were:

1. Bill S-216, Effective and Accountable Charities Act – remove “own activities” from the Income Tax Act and require charities to take reasonable steps to ensure resources are used for only charitable activities
2. Bill C-19, Budget Implementation Act, 2022 No. 1(BIA) – keep “own activities,” keep direction and control, and add a new category of “qualifying disbursements” that allows charities to transfer resources to non-qualified donees (basically non-charities), subject to mandatory conditions

If you need more context and background, we’ve talked about how they are different in our blog Budget Implementation Act, Bill S-216 and Direction and Control.

Advocacy Update – What Changes Were Made?

Amendments to the BIA eliminate the list of mandatory conditions for making “qualifying disbursements.” Instead of having to meet mandatory conditions, charities need to maintain documentation sufficient to demonstrate (1) the purpose for the disbursement and (2) that it is exclusively applied to charitable activities in furtherance of a charitable purpose.

This brings the BIA more in line with S-216 by removing a mandatory list that was reminiscent of direction and control requirements. The focus is on the purpose of the disbursement and ensuring the activities are charitable, rather than a focus on means of control.

You can see the changes in the amended (second reading) version of the BIA, or you can see the amended definition of “qualifying disbursement” at the bottom of this post.

What’s the Same?

The BIA does not eliminate “own activities” and direction and control from the ITA. Instead, as explained above, it creates a new category of “qualifying disbursements.”

The BIA will still require charities to report on every qualifying disbursement greater than $5,000, including the name of the grantee organization and total amount received, and the purpose of the disbursement. As others have noted, this section creates problems because it requires disclosure of potential sensitive information (e.g. charities working in areas with security risks or potential persecution).

The BIA will still prohibit charities from receiving donations that are expressly or implicitly conditional on the charity making a gift to another organization. As others have noted, this section creates problems because it precludes charities “from fundraising for programs being run by grantee organizations.”

The BIA will repeal Bill S-216 if it were passed into law before the BIA.

What’s Next?

First the amended BIA needs to pass through the House of Commons and the Senate.

Once passed, we will likely see guidance from CRA as to what it considers “sufficient” documentation. Without the mandatory list, charities will want some parameters as to what will be accepted or rejected. Even though the mandatory list is gone, we shouldn’t be surprised to see some of the same elements appear in a guidance document.

Looking for More?

Direction and Control – Advocacy Opportunity (26 May 2022)

Budget Implementation Act, Bill S-216 and Direction & Control (6 May 2022)

Update: Bill S-216 on Direction and Control (3 March 2022)

Bill S-216 on Direction and Control – Different Name, Same Aim (9 December 2021)

What’s Happening with Bill S-222? (30 June 2021)

Bill S-222: From Direction and Control to Reasonable Steps (10 February 2021)

For a deep dive on the BIA and Bill S-216, you can also check out Carters recent Charity & NFP Law Bulletin.

For more information on direction and control, see our Resource Page in CCCC Knowledge Base. And for members interested chatting about the topic, you can head over to our dedicated discussion space in The Green.

Amendment Details: Definition of “Qualifying Disbursement”

Before Amendments

Qualifying disbursement means a disbursement by a charity, by way of a gift or by otherwise making resources available,

(a) subject to subsection (6.‍001), to a qualified donee, or

(b) to a grantee organization, if

(i) the disbursement is in furtherance of a charitable purpose (determined without reference to the definition charitable purposes in this subsection) of the charity,

(ii) the charity ensures that the disbursement is exclusively applied to charitable activities in furtherance of a charitable purpose of the charity, and

(iii) the disbursement meets prescribed conditions;

After Amendments

Qualifying disbursement means a disbursement by a charity, by way of a gift or by otherwise making resources available,

(a) subject to subsection (6.‍001), to a qualified donee, or

(b) to a grantee organization, if

(i) the disbursement is in furtherance of a charitable purpose (determined without reference to the definition charitable purposes in this subsection) of the charity,

(ii) the charity ensures that the disbursement is exclusively applied to charitable activities in furtherance of a charitable purpose of the charity, and

(iii) the charity maintains documentation sufficient to demonstrate;

(A) the purpose for which the disbursement is made, and

(B) that the disbursement is exclusively applied by the grantee organization to charitable activities in furtherance of a charitable purpose of the charity;

The post Direction & Control – Advocacy Update, Bill C-19 Amendments appeared first on CCCC Blogs.

But first, some context.

Proposals for Change

There are currently two proposals for change:

1. Bill S-216, Effective and Accountable Charities Act – remove “own activities” from the Income Tax Act and require charities to take reasonable steps to ensure resources are used for only charitable activities
2. Bill C-19, Budget Implementation Act, 2022 No. 1(BIA) – keep “own activities,” keep direction and control, and add a new category of “qualifying disbursements” that allows charities to transfer resources to non-qualified donees (basically non-charities), subject to mandatory conditions

We’ve talked more about how they are different in our blog Budget Implementation Act, Bill S-216 and Direction and Control.

Many in the charitable sector, CCCC included, are concerned that the BIA will create confusion and could increase the burden on charities; we support the aim of Bill S-216 and are concerned that the BIA will not effectively accomplish those goals.

If you have similar concerns, we want to share an advocacy opportunity through Cooperation Canada. They have drafted an open letter on the BIA and are inviting stakeholders to sign on. It’s a quick turnaround time – you’ll need to sign by Friday, May 27. Yes, that’s tomorrow!

The letter expresses concern that, among other things, the BIA reinforces a paternalist approach to charitable activities, takes a prescriptive approach, creates confusion, and limits opportunities for collaboration. It proposes several amendments to the BIA which you should review, but here is a summary:

1. Amend the definition of “qualifying disbursement” to be more like the “reasonable steps” proposed in Bill S-216
2. Amend language related to directed giving (“expressly or implicitly conditional” gifts)
3. Delete proposed Regulation 3703 entirely – this regulation lists the mandatory conditions for “qualifying disbursements”

The BIA proposes significant changes for charities! Make sure you know what they are, and if they raise concerns for you, now is the time to advocate for change.

Looking for More?

Budget Implementation Act, Bill S-216 and Direction & Control (6 May 2022)

Update: Bill S-216 on Direction and Control (3 March 2022)

Bill S-216 on Direction and Control – Different Name, Same Aim (9 December 2021)

What’s Happening with Bill S-222? (30 June 2021)

Bill S-222: From Direction and Control to Reasonable Steps (10 February 2021)

For a deep dive on the BIA and Bill S-216, you can also check out Carters recent Charity & NFP Law Bulletin.

For more information on direction and control, see our Resource Page in CCCC Knowledge Base. And for members interested chatting about the topic, you can head over to our dedicated discussion space in The Green.

The post Direction & Control – Advocacy Opportunity appeared first on CCCC Blogs.

The recently tabled Budget Implementation Act, 2022, No.1 (BIA) and its accompanying Explanatory Notes Relating to the Income Tax Act and Other Legislation show that Budget 2022 will take a very different approach than S-216.

Procedural sidenote: the BIA was preceded by a Notice of Ways and Means Motion. This motion “seeks to approve the budgetary policy of the government” and is a required step before taxation legislation can be read (introduced) for the first time.

Bill S-216 would amend the ITA to eliminate the “own activities” test. It aims to end the requirement that charities have to exercise “direction and control.” Instead, charities would have an obligation to take “reasonable steps” to ensure resources are used for only charitable activities.

The BIA, in contrast, does not eliminate “own activities” from the ITA. Instead, it adds a new category, called “qualifying disbursements.” In brief, qualifying disbursements are resource transfers from a charity to a non-qualified donee that are subject to mandatory conditions.

How does all of this work? Let’s walk through the definitions, conditions and distinctions.

What is a Qualifying Disbursement?

“Qualifying disbursements” are disbursements or gifts or resources from a charity to a “grantee organization” that are subject to certain conditions:

• The disbursement furthers a charitable purpose of the charity
• The charity ensures the disbursement is exclusively applied to charitable activities in furtherance of a charity purpose of the charity
• The disbursement meets prescribed conditions

What is a Grantee Organization?

A “grantee organization” is “a person, club, society, association or organization or prescribed entity, but does not include a qualified donee” [emphasis added].

Qualified donees are organizations that can issue official donation receipts. That usually means registered Canadian charities but also includes registered entities like journalism organizations, municipalities, amateur athletic associations.

By default, then, a grantee organization is not a registered charity.

What are the Prescribed Conditions?

The prescribed conditions that make a disbursement, gift or resource a “qualifying disbursement” are listed in a new section of the Income Tax Regulations (3703). 

All of these conditions must be met:

Written agreement that includes:

• Terms and conditions, including a requirement that all resources be used exclusively for charitable activities in furtherance of a charitable purpose
• Description of activities the grantee will undertake
• Requirement that resources not used for the intended purpose be returned
• Requirement that the grantee make period reports (at least annually) with details on the use of resources, compliance with terms and conditions, and progress made
• Requirement that the grantee provide a final written report, including a summary of results achieved, how resources were used, evidence that resources were used for intended purposes
• Requirement that books and records be given to charity or kept by grantee for minimum 6 years
• Requirement that books and records for disbursement be made available to the charity to inspect, audit, examine or copy

Preliminary inquiry

Before making disbursements, the charity makes inquires to be reasonably assured that the grantee will comply with all the requirements of the written agreement; this includes reviewing the grantee organization (and it’s directors, officers and like officials):

• Identity
• Prior history
• Practices
• Activities
• Areas of expertise

Charity provides ongoing monitoring, including

• Receiving periodic reports
• Verifying the disbursement is being applied for its intended purpose

Charity receives, reviews and approves the final report

Charity undertakes adequate remedial action when it becomes aware that any part of the agreement is not being complied with

What are the Reporting Requirements?

Another new regulation (3704) adds to the existing reporting requirements in ITA s 149.1(14). As part of their public information return, charities have to report:

• The name of each grantee organization that received more than $5000 from the charity
• The purpose of each reported qualifying disbursement
• The total amount disbursed by the charity to each named grantee organization

What else is Different?

Charitable Purposes

The BIA would change the definition of charitable purposes.

• Current definition: “charitable purposes includes the disbursement of funds to a qualified donee”
• BIA definition: “charitable purposes includes making qualifying disbursements”

Bill S-216 would not change anything related to charitable purposes but focuses instead on charitable activities.

• S-216 definition of charitable activities adds a new subsection to include: “making resources – including grants, gifts or transfers – available through transactions, arrangements or collaborations of any kind whatsoever in furtherance of a charitable purpose to a person that is not a qualified donee if those resources are made available by a charity that takes reasonable steps to ensure that those resources are used exclusively for a charitable purpose in accordance with subsection (27)”

Charitable Organization

The BIA would keep the terminology of “own activities” whereas Bill S-216 focuses on removing that phrase from the definition of charitable organization.

• Current: charitable organization is one where (a.1) all the resources … are devoted to charitable activities carried on by the organization itself
• BIA: charitable organization is one where (a.1) all the resources … are devoted to charitable activities carried on by the organization itself or to making qualifying disbursements.
• S-216: charitable organization is one where (a.1) all the resources … are devoted to charitable activities.

What Will Happen to S-216?

If S-216 is passed and receives royal assent before (or on the same day as) the BIA receives royal assent, S-216 is deemed never to come into force and is repealed.

How will this Impact Charities?

Right now the BIA is at second reading in the House of Commons and is being pre-studied by the Senate. Assuming the BIA passes in its current form it will mean charities can make qualified disbursements to non-qualified donees without the formal requirement of it being the charities “own activities.” In other words, charities can give funds to non-charities.

However, the conditions that have to be met are, in essence, the same as those under the “own activities” / direction and control requirements. Some have argued that the conditions for qualified disbursements are actually more onerous than under “own activities” /direction and control: Robert B. Hayhoe, Stephen Hsia, “The new qualifying disbursement rules: An improvement?” (2 May 2022), Miller Thomson Social Impact Newsletter.

Others have expressed concern that the new “qualifying disbursement” changes “don’t really appear to take us where we need to go”; see Aidan Macnab, “Ottawa proposes changes to how charities can fund third-party organizations”, Canadian Lawyer (3 May 2022).

The BIA changes raise a number of questions: will the conditions be too onerous? Will the reporting requirements add to the administrative burden? Will having a third category for the use of resources be unnecessarily complex and confusing? Will the distinction between “qualifying disbursements” and “own activities” though intermediaries be one without difference? Will it muddy the waters and expectations as between the two?

CCCC is concerned that these changes will indeed create confusion and that the changes, at best, will not decrease administrative burdens and at worst, will increase those burdens. The changes proposed in the BIA are not the changes proposed in Bill S-216. We support the aim of Bill S-216 and are concerned that the BIA will not effectively accomplish those goals.

One thing is clear – it’s too early to definitively state whether the BIA will actually make positive changes. We’ll be watching closely.

Looking for More?

For more information on Bill S-216, see

• Update: Bill S-216 on Direction and Control (3 March 2022)

• Bill S-216 on Direction and Control – Different Name, Same Aim (9 December 2021)

• What’s Happening with Bill S-222? (30 June 2021)

• Bill S-222: From Direction and Control to Reasonable Steps (10 February 2021)

For more information on direction and control, see our Resource Page in CCCC Knowledge Base. And for members interested chatting about the topic, you can head over to our dedicated discussion space in The Green.

The post Budget Implementation Act, Bill S-216 and Direction & Control appeared first on CCCC Blogs.

There is big budget news in the Federal Budget, 2022! Two key pieces relate to direction and control and the disbursement quota. We’ve summarized these two items along with other information relevant to charities from both the Budget and the Supplementary Information.

Below each summary is a link to the source documents. Note that the Budget links are as close to the topic as possible, but aren’t pinpoints, so you might have to scroll just a bit to find the precise section.

Direction & Control

Proposed changes are made to implement “the spirit of Bill S-216, the Effective and Accountable Charities Act” which is currently scheduled for second reading on May 13 in the House of Commons. A total of $165M from 2022-2027 has been allocated to fund stronger partnerships in the charitable sector.

Budget 2022 would allow charities to transfer resources (“make qualifying disbursements”) to non-qualified donees if they further the charity’s purposes and the charity ensures the funds are used for charitable activities.

Resource Accountability

How would a charity show accountability for its resources? Budget 2022 proposes these requirements:

• A pre-grant inquiry that provides reasonable assurances the resources will be used for purposes set out in a written agreement; it would include the following information about the recipient:
  • Identity
  • History
  • Practices
  • Activities
  • Areas of expertise
• A written agreement
  • Terms and conditions of funding
  • Description of charitable activities by recipient
  • Requirement that funds not be used for any other purpose
  • Requirement that records relating to the use of the funds be maintained and accessible for at least 6 years after the relevant tax year
• Monitoring
  • Periodic reports (at least annual)
  • Details of how funds spent
  • Sufficient evidence to show funds used for intended purposes
  • Show review and approval by granting charity of the reports
• Full and final reports
  • Outline results achieved
  • Details of how funds spent
  • Sufficient evidence to show funds used for intended purposes
  • Show review and approval by granting charity of the final reports
• Disclosure
  • Public disclosure on information returns of information relating to grants over $5,000

Additional Changes for Direction & Control

There are a couple additional changes to support the move away from direction and control:

• Books and records – Budget 2022 would require charities, when asked by Canada Revenue Agency (CRA), to take all reasonable steps to obtain receipts, invoices or other documentary evidence to show grantees spent the funds appropriately
• Directed donations – Budget 2022 would address concerns about charities acting as conduits by prohibiting registered charities from accepting gifts that are expressly or implicitly conditional on making a gift to a person other than a qualified donee

Budget: Stronger Partnerships in the Charitable Sector (PDF p 195)

Supplementary Information: Charitable Partnerships (PDF p 15-16)

For background on S-216: Update: Bill S-216 on Direction and Control

Disbursement Quota (DQ)

The DQ would increase from 3.5% to 5% for the portion of property not used in charitable activities or administration that exceeds $1M. The Income Tax Act will be amended to clarify that management and administration expenditures do not count toward satisfying the DQ.

CRA would have discretion to reduce a charity’s DQ for a particular tax year. The Budget proposes to publicly disclose information related to these decisions.

It also proposes to remove the accumulation of property rule.

These measures would be effective on or after January 1, 2023 and would be reviewed after five years.

Additionally, CRA will improve its collection of information as to whether charities are meeting their DQ and information about donor-advised funds.

Budget: Boosting Charitable Spending in our Communities (PDF p 196)

Supplementary Information: Annual Disbursement Quota for Registered Charities (PDF p 14-15)

For background on DQ: Disbursement Quota Consultation

CRA Funding

The Budget would give $1.2B more funding to CRA over five years, beginning 2022-23 to:

• Expand audits of large entities that engage in aggressive tax planning
• Increase investigation and prosecution of suspected tax evasion
• Expand education outreach programs

Revenue recovered through these efforts is projected to be $3.4B over five years.

Budget: A Fair Tax System (Reinforcing the Canada Revenue Agency) (PDF p 211)

Anti-Racism Strategy & National Action Plan on Combatting Hate

The Budget would provide $85M over four years, starting in 2022-23 to Canadian Heritage to launch a new Anti-Racism Strategy and National Action Plan on Combatting Hate.

The intent is to support community projects that ensure Black and racialized Canadians, and religious minorities have access to resources to raise awareness of issues related to racism and to support full participation in the Canadian economy.

It would also provide $11.2M over five years to Canadian Heritage and Global Affairs Canada in response to religious discrimination. The funds would be allocated to:

• Special Envoy on Preserving Holocaust Remembrance and Combatting Antisemitism ($5.6M)
• Special Representative on Combatting Islamophobia ($5.6M)

Budget: A Diverse and Inclusive Canada (Fighting Systemic Racism, Discrimination and Hate) (PDF p 184-185)

Supporting Black Canadian Communities

Employment and Social Development Canada would receive $50M over two years for the Supporting Black Canadian Communities Initiative (see, for example Federal Black-Led Philanthropic Endowment Fund). The Minister of Families, Children and Social Development is responsible for exploring more options to continue its support of capacity building within Black-led and Black serving community organizations.

Budget: A Diverse and Inclusive Canada (Supporting Black Canadian Communities) (PDF p 185)

GST/HST Health Care Rebate

Charities and not-for-profits that provide health care services like those available in hospitals are eligible for an 83% GST/HST rebate if the health care service is being delivered with the active involvement of a physician or in a remote community, a nurse practitioner.

Budget 2022 would expand eligibility for charities and not-for-profits by removing the “remote community” restriction to include those with active involvement of a nurse practitioner regardless of location.

It would apply to rebate claim periods ending after Budget Day.

Budget: Tax Fairness and Effective Government (Table, Additional Actions) (PDF p 217)

Supplementary Information: GST/HST Health Care Rebate (PDF p 53-54)

For All the Details…

Budget 2022

Tax Measures: Supplementary Information

The post What the Federal Government’s 2022 Budget Means for Charities appeared first on CCCC Blogs.

Also known as the Effective and Accountable Charities Act, Bill S-216 would amend the Income Tax Act (ITA) to eliminate the “own activities” test. It would end the requirement that charities exercise “direction and control” and replace it with “reasonable steps” to ensure resources are used for only charitable purposes.

The status of the bill was raised in question period on February 14, 2022, but no clear answer as to the government’s position on the bill was provided.

What is Direction and Control?

What are we talking about when we say direction and control? This term doesn’t even appear in the ITA! 

What does appear in the ITA is a definition of “charitable organization.” Among other characteristics, a charitable organization is one devotes all of its resources to either (1) charitable activities “carried on by the organization itself” or (2) gifts to qualified donees.

For a charity to show that it is carrying on charitable activities itself, the charity must exercise direction and control over the funds it spends.  Charities can meet the test by using their own staff to carry out their activities or by working through an intermediary. It is usually straightforward to demonstrate direction and control when a charity uses its own staff, volunteers, etc., but it becomes a bit more complicated when intermediaries are engaged to carry out the charity’s activities, particularly when the activities are outside of Canada.

Direction and control means that charities need to have intermediary agreements and exercise operational control over projects. That means there are additional policy documents, protocols, processes, and periodic payment. Pooled funding agreements are basically impossible for Canadian charities unless they can exercise direction and control over the funded activities. That is difficult, if not impossible, when the Canadian charity is not the majority contributor.

Why is S-216 Important?

The current approach to accountability is “costly, inefficient and inconsistent with contemporary values of equal partnership, inclusion and local empowerment” (Senate Debate on December 1, 2021).

At first reading in the House, the purpose of Bill S-216 was enthusiastically summarized by the Member of Parliament as:  

…help[ing] charities do their great work around the world. Currently, charities are unfortunately encumbered by significant red tape and bureaucracy. This legislation would go from granular control, where charitable organizations in Canada have to okay nearly every decision of the partners they work with around the world or in Canada, to a system of accountability and transparency that will increase accountability for charities while giving them the autonomy to do their great work.

The move away from direction and control toward resource accountability provides the necessary transparency and flexibility to charities to accomplish their charitable purposes, a change that CCCC supports.

What are the Specifics?

The Bill would make this change in three ways:

1. Replace “charitable activities carried out by the organization itself” with “charitable activities” in the ITA
2. Expand the definition of charitable activities so that charities that take reasonable steps before using funds will fall within the definition
3. Set out what reasonable steps are, including:
   • Collect information to ensure resources will be used for charitable purposes (if not a qualified donee)
   • Use measures, restrictions or conditions, or other actions to ensure resources are used exclusively for charitable purposes

Next Steps

The bill will be scheduled for second reading in the House of Commons. At that point, most bills are referred to a committee for a thorough review and to receive input from the public. We’ll continue to monitor its process and update you on key developments, including any opportunity to make submissions to committee.

Details on how resource accountability will be determined through CRA consultations after the bill is passed.

Want to Know More?

For more on the Bill, you can check out our past blogs. You’ll see that some of them refer to Bill S-222. Bill S-222 is Bill S-216’s predecessor. Bill S-222 died when the federal election was called, and when the bill was introduced in the new Parliamentary Session it was given a new number, S-216. They are substantively identical.

Bill S-216 on Direction and Control – Different Name, Same Aim (9 December 2021)

What’s Happening with Bill S-222? (30 June 2021)

Bill S-222: From Direction and Control to Reasonable Steps (10 February 2021)

On direction and control, see our Resource Page in CCCC Knowledge Base. And for members interested chatting about the topic, you can head over to our dedicated discussion space in The Green.

The post Update: Bill S-216 on Direction and Control appeared first on CCCC Blogs.

Why a New Bill?

The new Bill S-216 was introduced because the old Bill S-222 died when the federal election was called. Because they’re basically identical, our blogs covering the substance of Bill S-222 are still relevant: Bill S-222: From Direction and Control to Reasonable Steps (10 February 2021) and What’s Happening with Bill S-222? (30 June 2021).

What is the Status of Bill S-216?

Bill S-216, formally called An Act to amend the Income Tax Act (use of resources of a registered charity), was introduced in the Senate on November 24. It is at second reading, when Senators debate and discuss the Bill.

Why is it Important?

Debate on December 1 gave context and background for the bill.

The bill amends the language in the Income Tax Act which currently limits registered charities to spend their charitable dollars on their own activities. Charities can, of course, make gifts or grants to other charities, but the act as it is currently worded limits them otherwise to spending their charitable dollars on activities that they undertake themselves.

… there are times when the best way for a charity to pursue its charitable purpose is to work through non-charities, such as not-for-profit groups, social enterprises, co-ops, civil society groups, even businesses and others who are on the ground and may well be the best partner for the charity to achieve its impact. 

This approach to accountability is “costly, inefficient and inconsistent with contemporary values of equal partnership, inclusion and local empowerment.”

These rules apply equally in Canada as they do internationally. Direction and control means that charities need to have intermediary agreements and exercise operational control over projects. That means there are additional policy documents, protocols, processes, and payments. Pooled funding agreements are basically impossible for Canadian charities unless they can exercise direction and control over the funded activities. That is difficult, if not impossible, when the Canadian charity is not the majority contributor.

What does it Propose?

The Bill moves away from direction and control to resource accountability. The Senate Special Committee on the Charitable Sector recommended this change (see p 97 of its report, Catalyst for Change), as has the Advisory Committee on the Charitable Sector in its First Report (January 2021). CCCC has also expressed support for this change, as noted in the Senate debate.

The Bill would make this change in three ways:

1. Replace “charitable activities carried out by the organization itself” with “charitable activities” in the ITA
2. Expand the definition of charitable activities so that charities who take reasonable steps in providing funds fall within the definition
3. Set out what reasonable steps are, including:
   • Collect information to ensure resources will be used for charitable purposes (if not a qualified donee)
   • Use measures, restrictions or conditions, or other actions to ensure resources are used exclusively for charitable purposes

Next Steps

The bill will make its way through the Senate process. If the Senate approves, it goes to the House for a similar process before it becomes law. We’ll continue to monitor its process and update you on key developments and milestones.

Details on how resource accountability will be determined through CRA consultations after the bill is passed. For more on direction and control, check out our Resource Page in CCCC Knowledge Base.

The post Bill S-216 on Direction & Control – Different Name, Same Aim appeared first on CCCC Blogs.

For a full review of the bill, check out this post, Bill S-222: From Direction and Control to Reasonable Steps (10 February 2021).

Where is S-222 now? And what’s next?

Stage in the Parliamentary Process

The Bill was introduced in the Senate in February 2021. It passed third (final) reading at the Senate on June 17 without any amendments being made to the bill. The sponsoring Senator highlighted the bill’s two objectives:

First, it provides accountability; and second, it provides for empowering partnerships. It is not an ‘either-or.’ Accountability and empowerment, and accountability and partnerships, are not mutually exclusive concepts.

On June 23, S-222 moved to the House of Commons for first reading. Speaking to the bill, an MP explained that the bill would:

…fix a problem due to the archaic legislation in the Income Tax Act that restricts the ability of Canadian charities to do good work around the world.

The MP went on to describe how it will reduce “bureaucracy and redundancy” while at the same time providing “greater accountability” and “giving charities in Canada the ability to do greater work.”

A Petition

Before the House adjourned for the summer a petition was tabled in the House of Commons calling on the government to take action by:

1. Replacing the “original regime and ‘own activity’ test in the ITA that requires registered charities to devote all of their resources to charitable activities carried on by themselves with a regime that permits registered charities to operate in furtherance of their charitable purpose; and
2. Replace current administration requirements around ‘direction and control’ with a requirement for registered charities to establish reasonable and practical parameters for ensuring resource accountability when working to achieve a charitable purpose through a third party that is not a qualified donee.”

The petition was by paper only and not posted for electronic signature. It may be that when the next session begins (bearing in mind the rampant election speculation!) a similar petition can be revived and tabled when the House comes to debate S-222. 

What’s Next?

It’s hard to say what’s next. If an election is called, S-222 may die on the order paper. That means another bill – identical or similar in substance – would have to be introduced after the opening of a newly elected Parliament, meaning the process would start all over. If no election is called, the House can pick up where it left off and the process will resume. Only time will tell.

In the meantime, members interested in the topic can hop over to The Green where there’s a dedicated space for discussion about direction and control.

The post What’s Happening With Bill S-222? appeared first on CCCC Blogs.