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Canada Revenue Agency (CRA) updates for charities and other not-for-profits

Canada Revenue AgencyCanada Revenue Agency recently released the following updates which are of interest to charities and other not-for-profits.

Transition to the new British Columbia (BC) Societies Act

CRA’s website includes a new webpage to assist BC not-for-profit corporations. BC’s new Societies Act (the “Societies Act”) came into effect on November 28, 2016. The Societies Act implements significant changes to the incorporation and governance of BC not-for-profit corporations. Not-for-profit corporations incorporated before November 28, 2016 have 2 years until November 28, 2018, to transition and become compliant with the Societies Act. This can involve a few steps, including obtaining the relevant documentation to complete the transition application and setting up an online account with Societies Online (the corporate registry service in BC). Charities who do not transition by November 28, 2018, will be dissolved and may ultimately lose their charitable status. You can access the new webpage here. CRA’s new webpage includes links to the Government BC webpage, which you can access directly here, for additional guidance.

CG-028 – Head bodies and their internal divisions

CRA has two updates relevant to head bodies and their internal divisions. The first is new guidance – CG-028, which clarifies the requirements for charitable registration of head bodies and their internal divisions. Read CG-028 here.

A head body is a registered charity, resident in Canada and created or established in Canada, with authority over internal divisions. An internal division is a branch, section, parish, congregation or other divisions of a registered charity that is established in Canada and that receives donations on its own behalf. An internal division is an extension of, and operates under the authority of the head body; it is not a legal entity and it must further the purposes of the head body.

The second update is a new webpage to explain changes to the Business Numbers (BNs) used by internal divisions. You can access the webpage here.

CRA intends to provide a new online service for registered charities. As a result, CRA will issue new BNs for all internal divisions, because it will no longer permit internal divisions to share BNs with their head bodies. The new webpage provides information on the implementation and the effect of the new changes on donation receipts (internal divisions will need to reprint, or hand-write the new BN on receipts); and T3010 Registered Charity Information Return filings (internal divisions will need to file their with the new BN), for example.

CG-014 – Community economic development (CED) activities and charitable registration

CG-014 now includes information about providing charitable funds to small businesses following a disaster. CG-014 replaces Guide RC4143, which was issued on December 23, 1999. You can read GC-014 here. GC-014 provides detailed guidance on registering and operating a charity which carries out CED activities. Organizations engaging in CED activities may be eligible to register as charities, if the activities directly further one of the 3 charitable purposes (that is, a purpose which relieves poverty, advances education, or benefits the community in other ways the law regards as charitable). CED activities generally fall into one of the following 5 categories: activities to relieve unemployment; grants and loans; program-related investments; social businesses for individuals with disabilities; and community land trusts. Among the requirements necessary to qualify as a charitable, CED activities must improve socio-economic conditions for the public benefit in an area of social and economic deprivation (which CG-014 describes as a “deprived area”). A deprived area includes geographic communities affected by a disaster and in need of disaster relief (which CG-014 describes as a “disaster area”).

Not-for-Profit PolicyPro (NPPP) contains sample policies, procedures and other documents, plus authoritative commentary in the areas of finance, corporate governance and administration, human resources, and marketing to save you time and effort in establishing and updating internal controls.

Apolone Gentles, JD, CPA,CGA, FCCA, Bsc (Hons)

Apolone Gentles is a CPA,CGA and Ontario lawyer and editor with over 20 years of business experience. Apolone is leveraging 20 years of business and accounting experience to build a commercial litigation practice with an emphasis on construction law. She has held senior leadership roles in non-profit organizations, leading finance, human resources, information technology and facilities teams. She has also held senior roles in audit and assurance services at a “Big Four” audit firm. Apolone has also lectured in Auditing, Economics and Business at post-secondary schools. Read more here

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