Canadian Bar Association Makes Submission About CRA’s Draft Grant-Making Guidance

By Jennifer M. Leddy

Mar 2023 Charity & NFP Law Update
Published on March 30, 2023



In response to the CRA’s request for comments on its draft guidance CG-032 “Registered charities making grants to non-qualified donees (draft)”, the Charities and Not-for-Profit Section of the Canadian Bar Association (“CBA Section”) has sent a letter with comments to improve the draft guidance’s accessibility and application to the charitable sector.

The letter, dated February 6, 2023, highlights five areas where changes can be made to the draft guidance, namely: (1) the risk assessment approach, (2) the use of terms, (3) the effective continuation of direction and control, (4) the explanation of directed giving, and (5) the charitable purposes for foundations that make gifts to qualified donees.

•           First, the CBA Section states that the risk assessment found in the draft guidance goes “beyond the legislation’s objectives” and “undermines the intention of Parliament” in part because it includes mandatory accountability requirements that would increase the administrative burden for most Canadian charities working with non-qualified donees.

•           Second, the letter highlights how “some of the terms or words used in the [d]raft guidance are not included in the legislation’s relevant provisions or are used differently”.

•           Third, when compared with the current “direction and control” regime, the risk assessment framework is “arguably more administratively onerous” and does not align with Parliament’s intention   to minimize the administrative burden on charities without reducing their accountability.

•           Fourth, the letter points out that the wording in the draft guidance on directed donations causes confusion because it does not align with the wording of the Income Tax Act and that, among other measures, the draft guidance should be modified to further explain what will be sufficient for a charity to show compliance with directed giving provisions.

•           Finally, the letter from the CBA Section suggests that it would be helpful to have guidance about whether charities that currently have a purpose of “granting to qualified donees” will have to amend their purposes to offer grants to non-qualified donees.

Though the deadline for submissions to the CRA on its draft guidance has now passed, it will be interesting to see how the submissions from various groups, including the CBA Section, are reflected in the revised guidance on qualifying disbursements which is expected to be released in mid-2023. To read Carters’ submissions, please see Charity & NFP Law Bulletin, No 518 and Charity & NFP Law Bulletin, No 519.


Read the March 2023 Charity & NFP Law Update