CRA News

Request for Proposals for the Social Finance Accelerator Initiative
The Employment and Social Development Canada announced on June 8, 2015, that it has issued a Request for Proposals (“RFP”) to award up to three contracts to establish a social finance accelerator to tackle persistent social problems in each of three regions: the Western provinces, Ontario, and Quebec and the Atlantic provinces. The Social Finance Accelerator Initiative was originally announced as part of the 2015 Federal Budget. Although this initiative is not directly related to Canada Revenue Agency (“CRA”), it will affect how CRA works with charities. The announcement indicates that successful bidders will work with organizations, such as charities and not-for-profit organizations to deliver enhanced assistance to more people in need, by addressing issues including unemployment, poverty and homelessness. Proposals may also address social isolation of seniors, and services targeting vulnerable youth to support their transition from education to work. The RFP will be open until July 17, 2015, and the awarded contracts are expected to be announced in August 2015, with the work starting by January 2016.
CRA Updated Income Tax Folio Chapter on Related Persons and Dealing at Arm’s Length
On June 9, 2015, CRA released an updated version of Chapter 1 of Income Tax Folio 5: Transfer of income, property or rights to third parties. Chapter 1 can be referenced as S1-F5-C1: Related persons and dealing at arm’s length. When it was first published on May 2, 2014, this Chapter replaced and cancelled Interpretation Bulletin IT-419R2, Meaning of Arm’s Length. The Chapter discusses the criteria used to determine whether or not persons deal with each other at arm’s length for the purposes of the Income Tax Act. This document will continue to have an impact on the operation of charities, since the arm’s length concept affects issues such as designation of charities and inter-charity transfers.
CRA Removes Guide on Keeping Records
As of May 12, 2015, CRA’s Guide RC4409, Keeping Records is no longer being made available. Currently, CRA provides limited information on keeping records on its website at: http://www.cra-arc.gc.ca/records/. It is unclear whether a new Guide will be released to replace RC4409.
Prime Minister Announces $10 Million for CRA to Detect and Suppress Terrorist Financing Prime Minister Stephen Harper announced on June 4, 2015, that CRA will invest approximately $10 million over five years to build on current efforts to detect and suppress terrorist financing activities in the charitable sector. This funding is made under Economic Action Plan 2015 for CRA to “better crack down on the financing of terrorist groups through registered charities in Canada.” This announcement was made alongside other provisions also mentioned in the 2015 Federal Budget (“Budget 2015”) , including $136.81 million being added to the budget of CSIS over five years, with $40.97 million per year being provided on an ongoing basis afterwards, to address the issue of terrorism.