On June 6, 2011, the Minister of Finance re-introduced the 2011 federal Budget. The Budget was originally released on March 22, 2011, but was not passed due to the dissolution of Parliament and the subsequent election. The updated Budget includes all of the measures affecting charities that were previously introduced in the March 22 Budget, subject to a couple of minor technical changes. The new measures in the Budget consist largely of rules intended to increase the transparency in the sector and to limit what are viewed as unintended or excessive benefits available to donors. We reported on these measures in the March issue of this Newsletter.
As expected, the measures in the Budget are generally effective as of the date of the original release of the Budget on March 22, 2011. Thus, charities and donors need to be aware that these rules will apply to gifts and other transactions occurring on or after March 22. The other technical change from the March 22 Budget is that the deadline for public submissions commenting on the proposed “exclusivity of purpose and function” test for Registered Canadian Amateur Athletic Associations is extended to August 31, 2011.
As noted, this year’s Budget focuses on curbing perceived excessive benefits and increasing transparency. It does not include additional support for the charitable sector through new donation incentives or the lessening of the regulatory burden. The updated Budget indicates that the Government supports a motion calling for the House Standing Committee on Finance to study charitable donation incentives, and will call on the Committee to undertake this study in the first session of Parliament. It may be hoped that the Committee’s study leads to new measures improving the incentives for charitable giving.