The March 17, 2016, Québec Budget provides good news for charities that receive donations from Québec residents and are registered as charities by the Canada Revenue Agency (“CRA”) under the Income Tax Act (“ITA”). Previously, the province required that charitable registration also be obtained in that province if donations were received from Québec residents. Otherwise, the tax receipts given by the charity for donations from Québec residents could be denied by Revenu Québec, the provincial tax authority.
Recognizing that Québec was the only province to require this double registration and in order to “ensure equivalent treatment”, the 2016 budget provides that, effective January 1, 2016, charities that have been registered by CRA under the ITA will no longer be required to file a separate application for charitable registration in Québec, but will be deemed to have also been registered in Québec. Donations made prior to January 1, 2016, to a charity registered by CRA will also be deemed to have been made to a charity in Québec. Notwithstanding this simplification of the registration process, Québec has retained its power to “refuse, cancel or revoke a registration or to modify a designation.” For more information on the 2016 Québec Budget please see The Québec Economic Plan: Additional Information.