Budget 2021: Changes to rules affecting registered charities

The Canada Revenue Agency has the authority to revoke the charitable registration status of an organization where that organization fails to fulfill its legal obligations. The rules governing such revocation authority are to expanded, generally for the purpose of limiting the misuse of charitable registration status for terrorist financing purposes.

The new rules will permit the Minister of National Revenue to immediately revoke the charitable registration status of an entity as soon as it is listed as a terrorist entity under the Criminal Code of Canada.

Charitable registration status can also be revoked where an “ineligible individual” is the director or other officer of, or controls or manages the charity. For that purpose, the definition of an ineligible individual will be expanded to include individuals who are members of a listed terrorist entity, a director or other officer of such an entity, or someone who controls or manages such an entity.

Finally, a technical amendment is proposed to the rules governing the revocation of charitable registration. The Minister of National Revenue will be authorized to suspend the right of a charity to issue charitable donation receipts or to revoke the charity’s registration, where a false statement has been made for the purpose of maintaining the charity’s registration.

For more information on the 2021 Federal Budget, please click here.