By Terrance S. Carter and Adriel N. Clayton

Finance Re-Releases Draft Legislation for Trust Reporting

Readers of our Charity & NFP Law Updates may be familiar with the extensive new trust reporting requirements introduced under the Income Tax Act (ITA) in 2022. As most recently detailed in Charity & NFP Law Bulletin No. 528, the Department of Finance Canada (“Finance”) proposed draft legislation on August 12, 2024, to amend certain aspects of new trust reporting requirements. However, although the August 2024 Draft Legislation was not introduced or passed, Finance re-released the draft legislation with amendments on August 15, 2025 through Legislative Proposals Relating to the Income Tax Act and the Income Tax Regulations (Technical Amendments) (the “2025 Draft Legislation”).

Broadly speaking, the 2025 Draft Legislation is functionally similar to the 2024 Draft Legislation in its application to charities and not-for-profits. In this regard, the 2024 Draft Legislation had proposed, among other things, to: (1) extend the exemption for reporting bare trusts for one additional year, being the 2024 taxation year; (2) exclude bare trusts from the definition of a trust or estate in subsection 104(1) of the ITA, except in limited circumstances; and (3) identify certain trusts that are deemed to be express trusts, and therefore subject to filing requirements, together with exceptions to these “deemed trusts”.

While the 2025 Draft Legislation removes the “deeming” language with regard to “deemed trusts”, the effect of the provisions remains substantially the same –for the purposes of section 150 of the ITA (concerning returns and the filing thereof) and section 204.2 of the Income Tax Regulations (concerning additional reporting for trusts), a trust includes an express trust in which: (1) one or more persons (the legal owner) have legal ownership of property that is held for the use of, or benefit of, one or more persons or partnerships, and (2) the legal owner can reasonably be considered to act as agent for the persons or partnerships who have the use of, or benefit of, the property. The 2025 Draft Legislation also clarifies the types of bare trusts that would still need to meet the reporting requirements.

As we had previously outlined in our letter to Finance dated September 10, 2024, the 2024 Draft Legislation was exceedingly complex and left many questions unanswered. The 2025 Draft Legislation has unfortunately done little to alleviate those concerns.

Federal Bill C-9 Proposes Amendments to the Criminal Code to Protect Places of Worship

The federal government introduced Bill C-9, An Act to amend the Criminal Code (hate propaganda, hate crime and access to religious or cultural places), which passed First Reading in the House of Commons on September 19, 2025. The Bill introduces the Combatting Hate Act, which proposes to amend the Criminal Code to protect places of worship. The backgrounder to the proposed legislation states that the proposed amendments would:

• Make it a crime to wilfully intimidate and obstruct people from accessing places of worship, as well as schools, community centres and other places primarily used by an identifiable group.
• Make hate motivated crime a specific offence, ensuring such conduct is more clearly denounced and that offenders are held accountable.
• Make it a crime to wilfully promote hatred against an identifiable group by displaying certain terrorism or hate symbols in public.
• Codify a definition of ‘hatred’ to clarify when conduct constitutes a hate crime.
• Streamline the process for prosecuting hate crimes by removing the requirement for Attorney General consent for laying hate propaganda charges.

These amendments would address rising concerns regarding hate towards certain communities, such as places of worship, by clarifying what is permitted as freedom of expression and what is not permitted as a hate crime. Specifically, the changes do not criminalize safe and peaceful protests or assemblies where individuals voice their concerns. Rather, they focus on more clearly criminalizing behaviour that is intimidating, obstructive and hate motivated. Further, the removal of the requirement for Attorney General consent in laying hate propaganda charges is aimed at allowing law enforcement to act more quickly in responding to hate-motivated acts and better protect communities, such as places of worship.

Although the proposed amendments criminalize behaviour that intrude on places of worship, the backgrounder states that Bill C-9 “is carefully designed to make sure that it does not apply to people who are simply communicating information, peacefully protesting, or otherwise not engaging in criminal activity around religious and cultural centres and other specified places. These changes would not prohibit protest, assembly or unreasonably affect an individual’s freedom to voice their concerns in a safe and peaceful manner.”

​Read the September 2025 Charity & NFP Law Update