Bill S-222 Proposes to Eliminate the “Own Activities” Requirement for Charities
February 2021 Charity & NFP Law Update
Published on February 25, 2021

By Terrance S. Carter and Theresa L.M. Man


A new bill introduced in the Senate will hopefully provide registered charities in Canada with much needed and long-awaited reform concerning how they can work with organizations that are not registered charities or other types of “qualified donees.” On February 8, 2021, the Honourable Ratna Omidvar, Senator for Ontario, and former co-chair of the Special Senate Committee on the Charitable Sector, tabled Bill S-222, the Effective and Accountable Charities Act (the “Bill”), which received first reading the same day. The Bill proposes significant changes to several provisions in the Income Tax Act (“ITA”) governing charities. In a social media posting published on February 14, 2021, Senator Omidvar said her intention for the Bill is to enable Canadian charities “to establish equal partnerships [with] non-charities, while still ensuring accountability.” Laws governing Canadian charities must “catch up with” the rest of the world, Sen. Omidvar added. The Senator’s efforts in this regard are expected to receive broad support from the charitable sector in Canada. As well, a number of charity lawyers in Canada (including the authors of this Bulletin) have signed an open letter explaining the need for reform to the ITA and to eliminate the “own activities” requirement.

This Bulletin explains the background for the problems that currently exist for registered charities in working with non-charities, because of archaic requirements in the ITA that charities must meet the “own activities” test. These provisions have been interpreted by the CRA to require that a charity must exercise onerous “direction and control” when working through third parties that are neither registered charities nor other types of “qualified donees.” The Bulletin also reviews the proposed changes in the draft Bill and the anticipated benefit that it will have on the operation of charities in Canada.

For the balance of this Bulletin, please see Charity & NFP Law Bulletin No. 486.


Read the February 2021 Charity & NFP Law Update