By Jennifer M. Leddy

CRA Reminder about Confirming a Representative

The CRA published a reminder to individuals and organizations that they can authorize representatives through a digital process. The reminder, published on February 24, 2022, sets out common examples of who a representative may be, such as an accountant, lawyer, or family member. Once a representative has been authorized, they may be able to view, get information about and update some or all of a person’s tax information.

Generally, the steps to confirm a new representative using the CRA’s online process are as follows:

1. Make sure you have an online account with the CRA.
2. Have your representative sign in to Represent a Client to submit a new authorization request.
3. Sign in to your online account and either confirm or deny the pending authorization request within ten business days.

Revenu Québec Publishes Guide for Charities Completing Information Return

Revenu Québec has published an updated guide for 2021 to help registered charities, registered national arts service organizations, registered museums, registered cultural or communications organizations and recognized political education organizations that carry on activities in Québec complete the Information Return for Registered Charities and Other Donees (TP-985.22-V). The Guide, Donees Required to File an Information Return, sets out general information and explanations regarding tax reporting for charities and similar organizations. It then provides further information about charities involved in limited partnerships, valuing gifts and issuing official receipts, and the circumstances in which Revenu Québec may impose sanctions or special taxes on organizations that have not fulfilled their obligations. The final two parts of the Guide provide instructions for completing the information return and associated schedules.

Registered charities or similar organizations that carry on activities in Québec may find this guide to be helpful in completing Form TP-985.22-V, especially with regards to obligations that are unique to Québec. For example, gifts of a public work of art or a building for cultural purposes require the Ministère de la Culture et des Communications to determine the fair market value of the work of art or building, unless the proposed gift is cultural property.

CRA Publishes Report on Charities Program in 2020-2021 Fiscal Year

On March 10, 2022, the CRA published its Report on the Charities Program 2020 to 2021 (the “Report”), an annual report which highlights the activities of the CRA Charities Directorate for the period between April 1, 2020 and March 31, 2021. The Report provides valuable insight into the charitable sector and the activities of the Charities Directorate during an unprecedented time of global pandemic. Charities should read the report for a full recounting of the statistics pertaining to the charitable sector as well as the Charities Directorate’s activities. Charities are also encouraged to take note of the CRA’s goals for the current fiscal year which demonstrate a greater focus on improved data collection.

The first part of the Report provides an overview of the charitable sector by the numbers and some of the effects of COVID-19. In 2020, there were over 85,000 charities registered with the CRA, with the majority (almost 75,000) being charitable organizations and the remainder either private or public foundations. The data in the Report relating to the amount of assets, revenue and expenditures for charitable organizations and foundations is from 2019, so it does not fully capture the effects of the pandemic. However, other information shows that as of March 31, 2021, charities had received $3 billion and $39 million from the Canada Emergency Wage Subsidy and the Canada Emergency Rent Subsidy respectively.

The Report also sets out some of the activities of the Charities Directorate between 2020 and 2021. For example, representatives of the CRA were involved with the Advisory Committee on the Charitable Sector, which released Reports #1, #2 and #3 during 2021. In addition, the Minister of National Revenue, Hon. Diane Lebouthillier, tabled the government response to the report of the Special Senate Committee on the Charitable Sector in which the government agreed to either support, refer for study, or further consider 37 of the 42 recommendations from the Senate’s report. Thirdly, the Charities Directorate developed and published the registered journalism organizations application and associated guidance. And finally, the Charities Directorate provided significant input into the Financial Action Task Force’s (“FATF”) review of Canada’s technical compliance with the FATF recommendations.

In the 2020 to 2021 fiscal year, the Charities Directorate received 1800 applications for registration as a charity. The Report outlines that 91% of these were submitted online. In the same fiscal year, the CRA registered 79% of applications for charitable status. 20% of applications were abandoned or withdrawn, while only 1% of applications resulted in a refusal to register. Common reasons for refusal to register were non-charitable activities, private benevolence, acting as a conduit, indirect protection of the environment, and providing resources to non-qualified donees. Overall, there was a decrease from 2017-2018 in the need to file an amendment prior to registration, with this happening in about 35% of applications in 2020-2021, down from 49% in 2017-2018.

The last section of the Report looks ahead to the Charities Directorate’s plans for the 2021 to 2022 fiscal year. The directorate anticipates that it will continue to administer emergency measures and recovery benefits, and to address and assess the impact of charities-related measures announced in Budget 2021 and the recommendations of the Advisory Committee on the Charitable Sector. As of January 2022, the Directorate will begin work to improve T3010 completeness, timeliness, and accuracy and will consider ways to increase charity data integrity.

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​Read the March 2022 Charity & NFP Law Update