PUBLICATIONS & NEWS RELEASES
Federal Budget 2024: Impact on Charities and Not-For-Profits
Finance Minister Chrystia Freeland tabled the eighth budget of the Liberal federal government ("Budget 2024") on April 16, 2024. Budget 2024 is comprised of eight chapters and three annexes, with the relevant proposed tax measures being summarized in "Tax Measures: Supplementary Information" that includes a Notice of Ways and Means Motion to Amend the Income Tax Act ("ITA") setting out the specific proposed amendments to the ITA.
Charity & NFP Law Bulletin No. 526 provides a brief summary and commentary on relevant provisions proposed in Budget 2024 that impact the charitable and not-for-profit ("NFP") sector. Budget 2024 includes a number of legislative proposals that will directly affect charities and NFPs, including a degree of relief to the Alternative Minimum Tax involving gifts to charities, as well as "improv[ing] the operations of the rules related to registered charities and other qualified donees" concerning the requirements to be a registered foreign charity, communication and services to charities, and donation receipts, as well as expanding the powers of the Canada Revenue Agency ("CRA"). In addition, Budget 2024 includes an announcement that legislative amendments will be made to expand the capabilities of the federal government to share information in order to combat money laundering and terrorist financing. Finally, of note, Budget 2024 includes program funding initiatives and grants of interest to the charity and NFP sector, including affordable housing, post-secondary institutions, community organizations, and not-for-profit child care.
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Legislation Update
Bill C-35, Canada Early Learning and Child Care Act
A federal bill intended to set out the federal government's "vision for a Canada-wide early learning and child care system" has finally been passed more than a year after its introduction. Bill C-35, Canada Early Learning and Child Care Act received Royal Assent on March 19, 2024 after first being introduced in the House of Commons on December 8, 2022.
The Act enshrines guiding principles for federal investments in a Canada-wide child care system, with a goal for Canadians to "have access to regulated high-quality, inclusive early learning and child care for an average cost of $10-a-day by March 2026" according to a March 20, 2024 news release from Employment and Social Development Canada.
Of note, the Act sets out guiding principles for Canada's early learning and child care system, including a system that aims to "support the provision of, and facilitate equitable access to, high-quality early learning and child care programs and services — in particular those that are provided by public and not for profit child care providers — that meet standards set by provincial governments or Indigenous governing bodies, that are reflective of other evidence-based best practices in high-quality service provision and that respond to the varying needs of children and families", and that is accessible to families of all income levels and inclusive of systematically marginalized grounds.
The Act also sets out the federal government's commitment to maintain long-term funding for programs and services, which will be provided "primarily through agreements with the provincial governments and Indigenous governing bodies and other Indigenous entities that represent the interests of an Indigenous group and its members."
CRA News
By Esther S.J. Oh and Cameron A. Axford
CRA Clarifies Issues Surrounding Remote Employees
The Canada Revenue Agency ("CRA") introduced significant changes regarding determination of the province or territory of employment for remote workers and changes that will apply to taxpayers claiming home office expense deductions for the 2023 taxation year. This will be relevant to charities and NFPs that have employees who work remotely.
Firstly, the CRA issued guidelines ("Guidelines") on April 10, 2024, for determining the province or territory of employment for remote workers for payroll deduction purposes, effective from January 1, 2024. A determination of the province or territory of employment (which CRA refers to as the POE) is required so that proper deductions are withheld on any employment income, including salaries, wages or commissions.
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