{"id":34482,"date":"2022-06-27T14:35:22","date_gmt":"2022-06-27T18:35:22","guid":{"rendered":"https:\/\/www.cccc.org\/news_blogs\/?p=34482"},"modified":"2022-06-29T11:08:08","modified_gmt":"2022-06-29T15:08:08","slug":"bill-c-19-has-passed-impact-on-direction-control","status":"publish","type":"post","link":"https:\/\/www.cccc.org\/news_blogs\/legal\/2022\/06\/27\/bill-c-19-has-passed-impact-on-direction-control\/","title":{"rendered":"Bill C-19 Has Passed \u2013 Impact on Direction & Control"},"content":{"rendered":"\n

Bill C-19 has passed. Also known as the Budget Implementation Act, 2022 No. 1<\/em><\/a> (BIA), the BIA means significant change for charities.<\/p>\n\n\n\n

Bill C-19 Budget Implementation Act (BIA) Changes: Qualifying Disbursements<\/h2>\n\n\n\n

The BIA amends the Income Tax Act<\/em> (ITA) to allow charities to work with non-charities. How? It adds a new category of permitted resource expenditures called \u201cqualifying disbursements.\u201d<\/p>\n\n\n\n

To make \u201cqualifying disbursements\u201d charities need to maintain documentation sufficient to demonstrate:<\/p>\n\n\n\n

  1. The purpose for the disbursement and<\/li>
  2. That it is exclusively applied to charitable activities in furtherance of a charitable purpose<\/li><\/ol>\n\n\n\n

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

    The BIA does not eliminate \u201cown activities\u201d and direction and control from the ITA like Bill S-216 proposed. Instead, as explained above, it creates a new category of \u201cqualifying disbursements.\u201d<\/p>\n\n\n\n

    Bill C-19 Budget Implementation Act (BIA) Changes: Reporting<\/h2>\n\n\n\n

    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<\/a>, this section creates problems because it requires disclosure of potential sensitive information (e.g. charities working in areas with security risks or potential persecution).<\/p>\n\n\n\n

    Bill C-19 Budget Implementation Act (BIA) Changes: No Directed Giving<\/h2>\n\n\n\n

    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<\/a>, this section creates problems because it precludes charities \u201cfrom fundraising for programs being run by grantee organizations.\u201d<\/p>\n\n\n\n

    What happened to Bill S-216?<\/h2>\n\n\n\n

    Bill S-216 is repealed.<\/p>\n\n\n\n

    What\u2019s Next?<\/h2>\n\n\n\n

    Now that the BIA has passed, CRA will undoubtedly prepare guidance as to what it considers \u201csufficient documentation.” Charities need this clarity. It helps ensure compliance and consistency. <\/p>\n\n\n\n

    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<\/a>. Even though the mandatory list is gone, we shouldn\u2019t be surprised to see some of the same elements appear in a guidance document.<\/p>\n\n\n\n

    What Can You Do? Tell Us What You think!<\/h2>\n\n\n\n

    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<\/a>! Your input and feedback is essential and will help us represent you \u2013 our members \u2013 as we have opportunity to engage with government on this topic.<\/p>\n\n\n\n

    Looking for More? Check out our Direction & Control series\u2026<\/h2>\n\n\n\n

    Direction and Control \u2013 Advocacy Update, Bill C-19 Amendments<\/a> (6 June 2022)<\/p>\n\n\n\n

    Direction and Control \u2013 Advocacy Opportunity<\/a> (26 May 2022)<\/p>\n\n\n\n

    Budget Implementation Act, Bill S-216 and Direction & Control<\/a> (6 May 2022)<\/p>\n\n\n\n

    Update: Bill S-216 on Direction and Control<\/a> (3 March 2022)<\/p>\n\n\n\n

    Bill S-216 on Direction and Control \u2013 Different Name, Same Aim<\/a> (9 December 2021)<\/p>\n\n\n\n

    What\u2019s Happening with Bill S-222?<\/a> (30 June 2021)<\/p>\n\n\n\n

    Bill S-222: From Direction and Control to Reasonable Steps<\/a> (10 February 2021)<\/p>\n\n\n\n

    For more information on direction and control, see our Resource Page<\/a> in CCCC Knowledge Base<\/a>. <\/p>\n","protected":false},"excerpt":{"rendered":"

    Bill C-19 has passed. Also known as the Budget Implementation Act, 2022 No. 1 (BIA), the BIA means significant change for charities. 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… More<\/a><\/p>\n","protected":false},"author":10,"featured_media":34294,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ts_fic_featured_image_caption":"","footnotes":""},"categories":[137],"tags":[240,204,506,163,498,424,408,284,429],"series":[],"class_list":["post-34482","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-charities","tag-charity","tag-charity-law","tag-cra","tag-direction-and-control","tag-federal-government","tag-income-tax-act","tag-legislation","tag-regulation"],"yoast_head":"\nBill C-19 Has Passed \u2013 Impact on Direction & Control - CCCC Blogs<\/title>\n<meta name=\"description\" content=\"Bill C-19 has passed. 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