Budget 2012 – Transparency and Accountability
On March 29, 2012, the Minister of Finance presented the 2012 federal budget which proposes several measures related to compliance and transparency with respect to political activities carried on by registered charities and registered Canadian amateur athletic associations (RCAAAs). Changes were also introduced to the qualified donee provision for charitable organizations outside Canada to which Her Majesty in right of Canada has made a gift.
As explained in the Budget, in recognition of the important contribution that registered charities can make to the public policy development process, they are specifically permitted to devote some of their resources to ancillary and incidental non-partisan political activities. This allowance was extended to RCAAAs in the 2011 federal budget. While there are no changes in this regard, Budget 2012 does propose certain amendments to ensure that all funding intended for political activities is reported in a charity’s annual information return. Budget 2012 also proposes to increase transparency by requiring more information about political activities, including the extent to which funding from foreign sources is used to carry on political activities.
In addition, Budget 2012 will provide the Charities Directorate with additional resources to allow us to enhance our education and compliance activities in the area of political activities. Also, new intermediate sanctions will apply where the rules are not followed, as is already the case for other types of non-compliance. As the rules relating to political activity apply to all registered charities, the CRA's educational and compliance efforts in this regard will extend to the charitable sector as a whole.
Changes have also been proposed to the provision for charitable organizations outside Canada to which Her Majesty in right of Canada has made a gift. Budget 2012 proposes that only those charitable organizations carrying on certain types of activities may be registered. An organization must be:
These changes are intended to ensure that Canadians receive tax relief for donations made to organizations carrying out activities of significance to, and in the interest of, the Canadian public.
The new measures for political activities will come into effect when the implementing legislation receives Royal Assent. The other measure will be effective on or after the later of January 1, 2013 and Royal Assent. Some changes such as revisions to information returns will take some time to implement. Complete details on all of the proposals can be found at www.budget.gc.ca.
Our Client Services Section is ready to answer questions about the new measures and can be reached at 1-800-267-2384. In addition, questions and answers on the new proposed measures will be posted on our Charities and Giving Web pages, and more information will be provided as it becomes available.
Please continue to check the Charities and Giving Web pages for updates.