Charity Highlights of Budget 2018

Authored By Philip A.S. Milley Associate Director, Legal Affairs

Today the Hon. Bill Morneau tabled Budget 2018, which includes supplemental information. Like Budget 2017, which we previously reviewed, Budget 2018 contains few references to charities.

The first, on page 189, relates to a pledge to clarify the rules on political activities to allow charities to do their work “free from political harassment.” Budget 2018 also contains a promise to clarify the rules governing political activity. This change comes as a result of the recommendations of the Consultation Panel on the Political Activities of Charities that recognized that charities make an important contribution to public policy. Budget 2018 provides no comment on what the changes to the political activity rules will be but indicates that the Government will provide a response to this report in the coming months.

The second reference relates to the possibility that Canadian newspapers may receive charitable status for the provision of journalism. Following the Public Policy Forum’s report on news in the digital age, the Government will explore new models for the delivery of journalism that may permit private giving and philanthropic support for non-profit journalism.

The third reference relates to a new reporting requirement for trusts, which is referenced on page 69. Budget 2018 proposes to require more onerous income tax reporting requirements for certain trusts, which will provide better transparency regarding beneficial ownership. While there is no discussion in Budget 2018, the supplemental information indicates that registered charities will be excluded from these requirements.

The fourth reference, at page 13 of the supplemental information, relates to the application of the revocation tax for registered charities. Budget 2018 proposes to amend the definition of “eligible donee” for the purposes of this tax. Specifically, the budget proposes to amend the Income Tax Act to permit transfers of property to municipalities as a qualifying expenditure for the purposes of the revocation tax, subject to the approval of the Minister of National Revenue on a case-by-case basis.

The final reference, at page 14 of the supplemental information, relates to the ability to claim donation tax credits for donations to qualifying universities outside of Canada. The budget proposes to simplify the administration of these rules and streamline the registration process for universities outside Canada as qualified donees. Budget 2018 proposes to remove the requirement that universities outside Canada be prescribed in the Income Tax Regulations, thus no longer requiring qualifying universities outside of Canada are required to be added to two separate, identical lists.

The full budget can be accessed here and the supplemental information can be accessed here.