The CBA’s Charities and Not-for-Profit Law Section welcome the Senate’s newly appointed Special Committee on the Charitable Sector.
The committee’s broad mandate includes studying the impact of laws and policies governing the sector, which the Section says are “arcane and difficult to understand,” and report back by Dec. 31, 2018.
The rules regulating charitable organizations, and public and private foundations are different from those regulation non-profit organizations. “In addition, there is no single set of rules that govern provincial/territorial entities,” the Section says in a letter to the committee. “As a result, there is a patchwork of rules and regulations between the federal rules and those of the various jurisdictions. There is also significant confusion in the applicable terminology.”
It notes a difference in perspective between Canadian laws and those governing the sector in other countries – broadly, outside of Canada the laws focus on ensuring the purposes of the charities are promoted, while Canadian rules focus on the activities of the charities themselves. “As a result, Canadian charities must expend considerable time and resources on compliance rather than on accomplishing their charitable mission, resulting in less effectiveness and inefficiency.”
Given the breadth of the committee’s mandate, and the relatively short time it has to accomplish it, the CBA Section advises that it would be most effective to focus its work on “modernizing the federal income tax rules for regulating charities. This would involve a review of the effectiveness of such rules on the manner in which charities can carry out their activities to achieve their purposes, both locally and abroad, fundraising and volunteerism.”