On March 5, 2026, the Charity and Not-for-Profit Law Section of the Canadian Bar Association (CBA Section) made a submission to the Minister of Finance and National Revenue, the Honourable François-Philippe Champagne, requesting that action be taken to remedy problems created by amendments to paragraph 168(1)(f) of the Income Tax Act (ITA) that came into force on June 23, 2022 (the Anti-Directed Giving Rule).
By way of background, the Anti-Directed Giving Rule was introduced in 2022 in conjunction with legislative reforms to establish the qualifying disbursement regime, which reforms were intended to provide charities with greater flexibility in working with non-qualified donees. However, concerns have arisen that the Anti-Directed Giving Rule in paragraph 168(1)(f) of the ITA is unnecessarily restricting the ability of charities to raise funds for grant-making projects under the new qualifying disbursement regime. For a discussion of those concerns, see Charity & NFP Law Bulletin No. 524.
The submission from the CBA Section explains the extent of the problems being encountered by the charitable sector in working with the Anti-Directed Giving Rule and requests that the provision either be deleted or amended to address the problems. In particular, the CBA recommends that paragraph 168(1)(f) should be repealed in its entirety or, if that is not possible, then to amend the provision so that it does not apply to qualifying disbursements (i.e. grants to non-qualified donees) made in compliance with the existing legislative framework.
The submission provides compelling reasons for its request, including the inconsistency of the amendment with the qualifying disbursement legislative regime and the challenges it poses for charities to work with non-qualified donees. The submission highlights that there are already existing CRA rules in place to effectively address any legitimate abusive conduct concerns that paragraph 168(1)(f) was intended to address, and that the amendment as it currently reads undermines the legislative reforms it accompanied by making it more difficult for charities to raise funds for programs that they wish to fund as grants under the new qualifying disbursement regime.
To read the full text of the submission from the CBA Section, including a discussion of the background and the particular wording of paragraph 168(1)(f) of the ITA, please click here. It is hoped that the Government will act quickly on the request by the CBA Section. In this regard, umbrella organizations within the charitable sector as well as individual charities may wish to consider writing to Finance in support of the important submission made by the CBA Section.