By: Joel Secter
Gifts to Foreign Charitable Foundations
Donors in Canada often experience disappointment when wishing to give money to foreign charities because the Income Tax Act does not consider them to be qualified donees within the meaning of the Act. (Qualified donees are organizations that can issue official donation receipts for gifts they receive from individuals and corporations.) In order to meet the definition of qualified donee under the Act, a foreign charity must have received a gift from the Government of Canada and also applied for registration to appear on a list maintained by the Canada Revenue Agency. While the Budget does not propose to change these basic requirements, it does propose amendments to the Income Tax Act that will allow foreign charitable foundations to be registered as qualified donees as well. Again, these foundations will still need to have received a gift from the Government of Canada and met all the other requirements for registration on the list of registered foreign charities maintained on the Canada Revenue Agency’s website.
Expanding the Use of Business Numbers
In an attempt to “cut red tape” the federal government plans to streamline the registration process for Business Numbers. Anyone who has ever set-up a business, not-for-profit or charity will know first-hand that a Business Number is the unique nine-digit number that identifies the business to the Canada Revenue Agency. These nine digits, together with the two letters that identify the type of account and the last four digits which are the reference number, form the 15 character account number that people will be most familiar with from their correspondence with the Canada Revenue Agency. Some of the more common types of program accounts are
- GST/HST (RT)
- Payroll (RP)
- Corporation income tax (RC)
Though it is possible to register for all program accounts at once under the current system, for practical reasons few ever do. This can lead to multiple registrations, and corresponding headaches, as a business’ needs grow and expand. The idea behind the proposed change is that a business dealing with the Government will only have to register once to be able to access all of the programs.
The Budget also proposes to give the Minister of Employment and Social Development and the Minister of Labour the authority to collect, use and verify Business Numbers to administer the programs in their departments.
The overall objective here is to establish the Business Number as a Common Business Identifier, which, presumably will simplify dealings with the federal government and reduce the workload on both the public and private sides of the equation.
Cooperative and Non-Profit Social Housing
Furthering its commitment to affordable housing, the Budget proposes to provide $150 million in additional support to social housing providers by eliminating the mortgage prepayment penalty on long-term, non-renewable loans held with Canada Mortgage and Housing Corporation. According to the Budget, this initiative will enable eligible co-operative and non-profit housing providers to access private sector loans with more favourable interest rates, reducing their mortgage expenses.
The Government will also help ensure access to affordable housing by spending more than $2.3 billion across a variety of programs over the next four years. For example, according to the Budget, about $170 million per year will be provided to First Nations to support the construction, rehabilitation, and renovation of affordable housing on reserves and to enhance the management of the housing stock through Canada Mortgage and Housing Corporation and Aboriginal Affairs and Northern Development Canada.