Jan 2019 Charity & NFP Law Update
Report on the Charities Program 2016 – 2018
In helping to fulfil the Federal Government’s pledge to share information about the regulation of charities, the CRA published its Report on the Charities Program 2016 to 2018 (the “Report”) on January 11, 2019. The Report provides an overview of the charitable sector across Canada by outlining various statistics of registered charities between 2016 and 2018, as well as programs and other resources implemented by the CRA. In terms of statistics, it indicates that during that time, the number of applications for charitable status decreased from 3,306 to 3,142; the number of charitable registrations decreased from 1,693 to 1,569; and total revocations increased from 1,372 to 1,562. An increase in revocations does not equate with an increase in enforcement related matters by the CRA, as the vast majority of revocations is a result of voluntary revocations or due to a registered charity failing to file their annual return when due, while revocations related to audits decreased from 28 to 26.
The Report also highlights the Charities Education Program (CEP), indicating its expansion in the 2017 – 2018 period with 277 visits to registered charities by CRA. It is indicated in the report that the CRA is considering further expanding the CEP to conduct more visits in the future.
Next steps for the CRA discussed in the Report include the launch of the Charities IT Modernization Project (CHAMP) in June 2019; administrative changes to help charitable registration; upcoming guidances, such as a guidance on advancing religion, advancing education, relieving poverty and carrying out related business activities; and additional educational tools for charities.
With respect to compliance-related projects, the Report highlights future focuses of the CRA, including a review of charity boards to identify whether there are concerns related to ineligible individuals and a review of real estate acquisition and construction activities to ensure they further a charitable purpose. The Report also highlights the Charities Directorate’s growing collaboration with other areas of the CRA in order to address “highly complex and offshore transactions.”