2011 Federal Budget—The Charitable Sector

The federal Budget tabled on June 6, 2011 included no changes to the income tax measures originally announced in the Budget on March 22, 2011.

Budget 2011 targets some potential abuses in the charitable sector. Proposals include, among other measures: extension of rules applicable to a “registered charity” to certain other entities, such as amateur athletic associations; a requirement that qualified donees appear on a CRA-maintained list, so that donors can verify whether an organization is able to issue a proper charitable receipt; empowering the CRA to suspend the receipting privileges or revoke the qualified donee status of an entity if it fails to comply with the regulations applicable to the issuance of receipts; extension of the CRA’s rights to revoke registration in defined circumstances; introduction of a new concept that allows the CRA to reassess a donor in situations where the donated property is subsequently returned by the charity; and significant restrictions on the exemption from tax on capital gains relating to the donation of flow-through securities.

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