The Department of Finance has released the Notice of Ways and Means Motion to introduce an Act to implement certain provisions of the budget tabled in Parliament on April 7, 2022, and other measures. Here is a PDF. It is about 443 pages long so here are excerpts of the Notice of Ways and Means Motion relating to charities. Hopefully, we caught them all. We covered the Federal Budget in the article “Canadian Federal Budget 2022 and its impact on non-profits and charities.”
I was not sure when to expect the legislation dealing with Canadian charities providing grants to non-qualified donees that was mentioned in the Federal budget on April 7, 2022. So, I was pleasantly surprised that the draft legislation is already available.
The draft legislation provides some helpful clarifications that the summary in the budget did not contain. Here are some examples:
- It was not clear in the Budget what would happen to Bill S-216. The Notice of Ways and Means Motion provides some clarity “If Bill S-216, introduced in the 1st session of the 44th Parliament and entitled An Act to amend the Income Tax Act (use of resources of a registered charity), receives royal assent before or on the same day as this Act receives royal assent, then, on the day this Act receives royal assent, that Act is deemed never to come into force and is repealed.”
- There is more clarity on the transparency requirements in that they will apply to any “grantee organization that received total qualifying disbursements from the charity in excess of $5,000 in the taxation year.”
- In terms of books and records, I was concerned that non-qualified donees would be forced to keep books and records for six years after a project but the Notice of Ways and Means Motion clarifies that there are two options: “a requirement that the books and records relating to the use of the disbursement (containing information in such form as will enable the Minister to determine whether the disbursement is a qualifying disbursement) be transferred to the charity or be kept by the grantee organization for a minimum of six years following the end of the last taxation year of the charity to which the books and records of account relate, …”
It will be interesting to see the guidance from CRA on how they will interpret these changes.