By Terrance S. Carter, and Theresa L.M. Man

The Honourable Senator Ratna Omidvar’s Bill S-222, the Effective and Accountable Charities Act (“Bill S-222”), made its way through the Senate and passed Third Reading without amendment on June 17, 2021. It has now been introduced in the House of Commons and completed First Reading on June 23, 2021.

As reported in the May 2021 Charity & NFP Law Update, Bill S-222 proposes significant changes to several provisions in the Income Tax Act governing charities to eliminate the “own activities test” and the related Canada Revenue Agency (“CRA”) “direction and control” regime in order to permit charities to provide their resources to qualified donees, provided that charities take reasonable steps to ensure those resources are used exclusively for a charitable purpose.

Prior to the Third Reading in the Senate, the Bill had been sent to the Standing Senate Committee on National Finance (the “Finance Committee”) for consideration. The Finance Committee met with witnesses on June 1, 2021, hearing from representatives from the Department of Finance Canada, the CRA, Imagine Canada, and Cooperation Canada. It also heard from Terrance S. Carter, who spoke in support of Bill S-222 stating that the Bill would replace a burdensome regime with one that more effectively allows charities to achieve their charitable purposes. On June 8, 2021, the Finance Committee undertook a clause-by-clause consideration of Bill S-222 and agreed that the Bill would carry and be reported to the Senate for Third Reading.

As the House of Commons prorogued on June 23, 2021 for the summer break, it is anticipated that review and debate of Bill S-222 will resume in the fall when Parliament resumes.

Read the June 2021 Charity & NFP Law Update