Feb 2018 Charity & NFP Law Update
On February 27, 2018, Finance Minister Bill Morneau tabled the third budget of the Liberal Federal Government (“Budget 2018”). Like the previous two budgets, Budget 2018 once again emphasizes the Liberal election platform to focus on economic growth, job creation and supporting a strong middle class, but this time with a focus on gender equality and Indigenous peoples. However, and also similar to the previous two budgets, Budget 2018 does not include any new tax incentives for the charitable and not-for-profit (“NFP”) sector. In addition, Budget 2018 does not make any mention of the consultation on non-profit organizations (“NPOs”) that was originally proposed in Budget 2014 but has never materialised.
While Budget 2018 contains little of significance with regard to charities and NFPs, it is expected that more will be forthcoming from the Government over the next year as indicated by the Federal Government’s commitment in Budget 2018 to provide a response to the May 2017 report on political activities by charities, reviewed in Charity & NFP Law Bulletin No. 403, as well as an anticipated report of the newly formed Senate Special Committee on the Charitable Sector reviewed in the January 2018 Charity & NFP Law Update.
What Budget 2018 does include are proposed amendments to the Income Tax Act (Canada) (“ITA”) to permit property transfers to municipalities as qualifying expenditures for revocation tax purposes; removal of the requirement that registered universities outside of Canada be prescribed in the Income Tax Regulations; new reporting requirements for trusts subject to an exemption for charities and NPOs; support for local journalism, including possible charitable status for NFP journalism; as well as funding of various charitable and NFP sector initiatives. This Bulletin provides a summary and commentary of these and other provisions from Budget 2018 that impact charities and NFPs.
For the balance of this Bulletin, please see Charity & NFP Law Bulletin No. 417.