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.

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