FINA Recommends Tax Relief, Funding Flexibility for Charities and NFPs
February 2021 Charity & NFP Law Update
Published on February 25, 2021

By Ryan M. Prendergast


The House of Commons Standing Committee on Finance tabled its 2021 pre-budget consultation report on February 16, 2021 (“the Report”). Titled, “Investing in Tomorrow: Canadian Priorities for Economic Growth and Recovery,” the Report includes 145 recommendations organized into five diverse topics: People; Communities; Business; Fiscal Policy, Regulatory Framework and Trade; and Environment and Climate Change. It takes into account how “deeply affected” Canadians have been by the COVID-19 pandemic. The recommendations “focus on measures to provide ongoing assistance to Canadians during the COVID-19 pandemic and support the recovery of the Canadian economy” and to “contribute to the government’s deliberations for the 2021 federal budget.”

Among the recommendations for Communities, the Report includes three recommendations concerning charities and non-profit organizations:

Recommendation 56: Eliminate the capital gains tax on donations of shares in private corporations or real property to charities.

Recommendation 57: Establish a fund to provide bridge operating grants for up to 12 months to essential community service organizations. Funding should be flexible to allow organizations to maintain operations and respond to emerging needs. This support should be made available for a three to six-month period as organizations recover from the impacts of COVID-19. Applications should outline need or financial duress, and what other programs have been accessed (or are unavailable), such as wage and rent relief. Support could be differentiated by subsector or relevant need – as immediate humanitarian support may be gauged differently than longer-term institutional goals that can be addressed at a later time.

Recommendation 58: Review existing tax measures available to both individual and corporate donors and make appropriate amendments to encourage giving to, and supporting the recovery of, the health charities sector.

The Report also includes an infographic map with numbers for the spread of the pandemic. As of 28 January 2021, there had been 766,103 cases of COVID-19 in Canada, including 262,463 in Ontario, and nearly 20,000 Canadians died as a result.

The Report’s inclusion of recommendations concerning charities and non-profit organizations is an encouraging step, and will be of interest to the charitable sector. Charities and not-for-profits will therefore want to review the Report and monitor the federal government’s 2021 budget to see if these recommendations are taken into account.


Read the February 2021 Charity & NFP Law Update