Introduction

Today, the Honourable François-Philippe Champagne, Minister of Finance, tabled a new federal budget (the “2025 Budget”), setting out the Government of Canada’s spending priorities for the next year and beyond.

The 2025 Budget is a budget of many firsts: it is the first of the Carney Government, the first to distinguish between capital and operational expenses, and the first to be tabled in Parliament’s fall session – this timing is intended to continue on a permanent basis going forward.

The 2025 Budget is also the first budget to be released since the April 2025 federal election, the 2024 US presidential election, and—in what feels like a lifetime ago—the last federal budget of the Trudeau era (which was tabled in April 2024).

The Budget reflects and responds to these changes in governments and their priorities. It makes “generational investments” in defence, infrastructure, major projects, housing, and tariff-affected industries in the face of US protectionism and growing economic uncertainty.

What does the 2025 Budget propose for Canadian charities and non-profits?

The 2025 Budget proposes several measures that will impact, and be of interest to, Canada’s charities and non-profit organizations (NPOs). These proposals include:

  1. Revising the new NPO reporting requirements and delaying their application to the 2027 tax year or later;
  2. Extending anti-money laundering prohibitions to donations;
  3. Piloting a program that allows a duty drawback on donations of certain imported goods to a registered charity;
  4. Addressing integrity issues related to private educational institutions;
  5. Addressing the rise in hate-related crimes through reforms and engagement with impacted communities;
  6. Making it faster to dissolve federal corporations that are listed as terrorist entities; and
  7. Developing a regulatory framework governing stablecoins—a potential new way to give to charity.

Notably (but not surprisingly) absent from the 2025 Budget are two controversial recommendations from the Finance Committee’s Pre-Budget Consultations Report. These recommendations proposed that the Government (1) revoke the charitable status of “anti-abortion organizations” (Recommendation 429) and (2) remove the advancement of religion as a recognized charitable purpose under the Income Tax Act (Canada) (the “ITA”) (Recommendation 430). Their omission in this Budget was expected, reflecting the intense public pushback that these proposals had received. In response to an earlier public petition calling on the Government to reject both recommendations, the Minister of Finance indicated that the Government “is not considering amending the [ITA] to remove the advancement of religion as a qualifying charitable purpose, nor is it actively developing policy on this issue”. At this time, however, we are not aware of any similar official statement being made with respect to Recommendation 429.

The 2025 Budget also confirms that Ottawa will move forward with several previously announced measures and existing legislative proposals that are relevant to the sector. These include several technical amendments to the ITA, as well as draft legislation to extend the 2024 charitable donation deadline.

As with previous federal budgets, the 2025 Budget contains both new and ongoing funding opportunities for charities and NPOs operating in almost every sector. We have summarized these funding opportunities at the end of this article.

Below, we provide our highlights of the 2025 Budget affecting the charitable and NPO sector, beginning with new legislative proposals and measures that will directly affect and/or be of interest to charities.

New proposals and measures for charities and NPOs

1. Revising the new NPO reporting requirements and delaying their application to the 2027 tax year or later

The Government is going back to the drawing board with its new NPO reporting requirements. Ottawa is also pushing the application date of the new reporting requirements to the 2027 tax year, or possibly later.

Readers will recall that, in August, the Department of Finance released draft legislation that would enhance the reporting requirements for NPOs. Under the regime that was proposed at that time, all NPOs would face a new filing requirement. Organizations with over $50,000 in gross annual revenues would be required to file the current annual T1044 information return; those NPOs with revenues under that threshold would need to file a new short form return containing basic information, including a description of the organization’s activities. If passed in their current form, the new measures would apply to 2026 and subsequent taxation years. A public comment period closed on September 12, 2025.

In the 2025 Budget, the Government announced that it is reviewing the feedback it had received from consultations with stakeholders and that it will “release final proposals in due course”. The final proposals aim to “minimize any additional administrative burden and clarify which organizations are, or are not, subject to the new reporting requirements”.

As a result of its ongoing review, Ottawa is deferring the application date for the new reporting requirements to taxation years beginning January 1, 2027 “or later”.

2. Extending anti-money laundering prohibitions to donations

In the 2025 Budget, the Government announced proposed amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the “PCMLATFA”) and its regulations that affect organizations that receive cash donations. This announcement brings forward rules that were proposed earlier this year.

As outlined in a recent issue of our Social Impact Newsletter, the Government proposed a prohibition on cash payments or donations of $10,000 or more in Bill C-2, An Act respecting certain measures relating to the security of Canada’s border and the integrity of the Canadian immigration system. The prohibition makes it an offence for a person or entity to accept a cash donation of $10,000 or more in a single transaction or a series of related transactions. The Government received significant feedback raising concerns about measures included in Bill C-2.

In October 2025, the Government introduced a new bill, Bill C-12, Strengthening Canada’s Immigration System and Borders Act. Bill C-12 included some of the proposals from Bill C-2, but did not include the prohibition on cash donations. Bill C-12 was intended to expedite certain less controversial measures from Bill C-2. Our understanding was that the remaining provisions in Bill C-2 were still going to proceed through Parliament, but it remained to be seen whether those would pass.

By announcing the proposed amendments in the 2025 Budget, the Government has signaled that it intends to proceed with these amendments. As the draft legislation for the amendments was not included in the Budget, the actual wording of the changes is unknown. The Government could push Bill C-2 forward, or present new draft legislation dealing with the amendments announced in the Budget. This means that the amendments could change or, if separated from the rest of Bill C-2, the Government might be trying to expedite these changes.

The Budget also includes a proposal to amend the PCMLATFA so that certain provisions apply to all financial donations, regardless of whether those donations are charitable. This appears to be a new proposal that was not previously introduced in Bill C-2. It remains to be seen what specific provisions will apply to donations.

3. Allowing a duty drawback when surplus imported goods are donated to registered charities

The Government announced a pilot project to encourage the donation of imported surplus goods to registered charities. The Government proposes to amend the Customs Tariff to allow for a duty drawback where certain goods (described in the Budget only as “obsolete or surplus goods”) are donated to a registered charity, to be used in the organization’s charitable programs.

A duty drawback is an established mechanism that allows an importer who has paid tariffs or duties to import goods from a foreign jurisdiction to claim a refund of amounts paid in certain circumstances.

In this case, it appears that the pilot project will allow a Canadian importer to claim a duty drawback refund if they donate permitted surplus goods to a registered charity for use in charitable programs. The proposed duty drawback will not apply if the imported goods are for re-sale in Canada. No details are provided in the Budget regarding the amounts of the duty drawback, or any required timing of the donations to be entitled to claim it.

This pilot project is expected to benefit frontline charities and low-income people who use charitable services to meet their essential needs, including clothing. Beneficiaries of increased donation of surplus goods may include low-income individuals and families, as well as those who are unable to work due to mental or physical illness, work multiple part-time jobs, or are currently searching for work.

4. Addressing integrity issues related to private educational institutions

The Government plans to narrow the eligibility criteria for students applying for Canada Student Grants and Loans, a federal program responsible for providing financial assistance to full and part-time post-secondary students based on need. Following the planned change, this form of financial assistance will only be available to eligible students enrolled in public or not-for-profit private institutions within Canada. Eligible students pursuing their education abroad must be attending public institutions to receive this financial assistance.

The Budget indicates that these changes are aimed at addressing integrity issues with private, for-profit educational institutions. While declining to elaborate upon the nature of these integrity issues, we infer it relates to reported incidents among some bad actors regarding questionable student recruitment practices and poor educational quality. The forecasted changes to the Canada Student Grants and Loans program appear to tacitly recognize that similar integrity concerns do not exist for educational institutions operated by registered charities and not-for-profits.

The measure is designed to save the Government approximately $1.0 billion over four years, beginning in 2026–27, with ongoing annual savings of about $280.0 million.

5. Addressing the rise in hate-related crimes through reforms and engagement with impacted communities

To address the dramatic rise in hate and hate-related crimes, including numerous incidents of both Antisemitism and Islamophobia, the Government introduced the Combatting Hate Act in September. This piece of legislation aims to better protect the access of Canadians to places of worship, schools, and community centres and to more clearly address and denounce hate-motivated crimes.

The 2025 Budget announces that the Minister of Public Safety will engage with impacted communities to develop both a comprehensive and equitable approach to addressing hate and hate-related crimes. The Government plans to introduce reforms to the Canada Community Security Program to ensure that “Canadians are not afraid of who they are, how they worship, or where they gather”. The Government will provide more details of these changes in due course.

6. Making it faster to dissolve federal NPOs that are listed as terrorist entities

The Government proposes to amend the Canada Business Corporations Act, Canada Not-for-profit Corporations Act, and Canada Cooperatives Act to permit quicker dissolution of a federal corporation when it is listed as a terrorist entity under the Criminal Code.

7. Developing a regulatory framework governing stablecoins—a potential new way to give to charity? 

The Government plans to introduce new legislation to govern the issuance of fiat-backed stablecoins in Canada.

As its name implies, a stablecoin is a type of cryptocurrency that is designed to have a relatively stable price. Unlike other more volatile forms of cryptocurrency, stablecoins tend to avoid large swings in price because they are pegged to a stable asset (such as a fiat currency) or to a basket of assets, or because an algorithm regulates their supply.

The Government’s announcement follows in the footsteps of the United States, which had passed the GENIUS Act (the Guiding and Establishing National Innovation for US Stablecoins Act) earlier this summer. The GENIUS Act establishes a federal framework for regulating stablecoins in the US.

Canada’s proposed legislation will require issuers to maintain and manage adequate asset reserves, among other requirements. It will also include “national security safeguards to support the integrity of the framework so that fiat-backed stablecoins are safe and secure for consumers and businesses to use”.

The Canada Revenue Agency (“CRA”) currently treats cryptocurrency as a commodity, not as government-issued currency. Donations of cryptocurrency are thus treated as non-cash gifts (and subject to the customary rules regarding fair market value and deemed fair market value). Whether CRA’s treatment of stablecoins will differ remains to be seen.

Previously announced measures to be implemented

The 2025 Budget confirms that the Government intends to proceed with amendments to the ITA that were introduced on August 12, 2024 (and which had been proposed in the 2024 Federal Budget). Our newsletter on the 2024 Budget discusses these proposed measures. The 2025 Budget confirms that these measures will be implemented “as modified to take into account consultations and deliberations since their release”, although no details on any modifications are provided. Several of these amendments, most of which will take effect upon Royal Assent, will affect registered charities, NPOs, and other qualified donees:

Electronic notice

CRA will be permitted in certain circumstances to provide notices to charities and qualified donees electronically via My Business Account, where it was previously required to send notice by registered mail. This includes notices of refusal to register a charity or qualified donee, revocation of registration of a charity or qualified donee, annulment, re-designation, and notice of suspension of receipting privileges. In order for CRA to send such notices electronically, the notice must include certain information (i.e., the business or registration number of the organization) and the organization must have authorized CRA to send notices electronically. Such notices will be deemed to be sent and received on the day that they are posted to My Business Account by CRA.

This measure continues CRA’s transition from paper communication to the electronic My Business Account system.

“Registered foreign charity”

The amendments will introduce the new definition “registered foreign charity”. This definition refers to a category of qualified donee that has long been recognized under the ITA – specifically, a foreign charity that (i) has received a gift from the federal government, (ii) carries out disaster relief activities, provides urgent humanitarian aid, or carries out other activities in the national interest of Canada, and (iii) has been registered as a qualified donee by CRA. The period during which such registered foreign charities will be recognized as qualified donees will be extended from 24 months to 36 months, beginning from the date that the foreign charity receives its gift from the federal Crown. Registered foreign charities will also be required to file annual information returns. These provisions will be deemed to come into force on April 17, 2024 and apply to registrations beginning on that date.

This is a small category of qualified donee – at present, there are only two registered foreign charities.

Content of official donation receipts

The amendments will also make several changes to the required content of an official donation receipt:

  • it will no longer be necessary to indicate the place or locality where the receipt was issued;
  • it will no longer be necessary to indicate the name and address of an appraiser of a gift in kind;
  • it will no longer be necessary to include the donor’s middle initial;
  • receipts that are issued electronically can include digital signatures, provided that they contain a unique serial number and are issued and sent in a secure, non-editable format; and
  • spoiled receipts must be marked “cancelled” or “void”.

Registered charities and qualified donees should take note these changes – which will take effect upon Royal Assent – and ensure that their forms of official donation receipts are up to date.

Alternative Minimum Tax Changes

The Government will continue with the previously announced changes to the Alternative Minimum Tax released on August 12, 2024. These measures could be subject to change based on representations made to the original proposals.

The 2023 Federal Budget proposed significant changes to expand the application of AMT. In 2024 the Government introduced a few changes to the expanded AMT. One such change was to increase the charitable donation tax credit from 50% of the donation to 80% when calculating AMT. This is a change the charitable sector lobbied hard to achieve. It is hoped that the Government proceeding with the August 2024 changes mean this increase will be implemented.

Expanded CRA audit powers

The amendments to the ITA will augment CRA’s existing audit powers. This includes a power to issue a “notice of non-compliance” (with monetary penalties for organizations that are served with such a notice), and the ability to compel representatives of a taxpayer to answer questions and provide documents under oath. New monetary penalties will also apply for a failure to comply with a compliance order. Charities and NPOs will need to be aware of these powers, all of which add to CRA’s power to compel the provision of information and increase the potential consequences of non-compliance.

New and ongoing funding opportunities for charities and non-profits

Like past federal budgets, the 2025 Budget contains many new and ongoing spending promises that will be of interest to the charitable and NPO sector. We have organized the relevant funding proposals by sector/category below, and we encourage readers to look out for more details about these funding opportunities as they become available.

2SLGBTQI+ Canadians

Arts, Media and Culture

Defence

Education

Environment, Climate Change, Conservation, and Clean Technology

Gender Equality

Housing, Infrastructure and Communities

  • $51.0B over 10 years, starting in 2026-27, and $3.0B per year ongoing to new Build Communities Strong Fund to be administered by Housing, Infrastructure and Communities Canada to support a wide range of infrastructure projects and help local communities , broken down as follows:
    • $27.8B over ten years, starting in 2026-27, and $3.0B per year ongoing to the rebranded Community Stream (formerly the existing Canada Community-Building Fund), to support local infrastructure projects.
    • $17.2B, over 10 years, starting in 2026-27, to the new Build Communities Strong Fund, to be administered by Housing, Infrastructure and Communities Canada, to support provincial and territorial infrastructure projects and priorities, including supporting housing-enabling infrastructure and health-related infrastructure, and infrastructure at colleges and universities.
      • As part of this, $5.0B, over three years, starting in 2026-27, to the new Build Communities Strong Fund to be administered by Housing, Infrastructure and Communities Canada, dedicated for a Health Infrastructure Fund to ensure health infrastructure (such as hospitals, emergency rooms, urgent care centres, and medical schools) can respond to the health care needs of Canadians.
    • $6.0B over ten years, starting in 2026-27, delivered by Housing, Infrastructure and Communities Canada, for the Direct Delivery Stream to support regionally significant projects, large building retrofits climate adaption, and community infrastructure.
    • support for the following projects, with further details on each project expected to be provided in the coming months:
      • Filipino Community and Cultural Centre in Metro Vancouver, British Columbia.
      • White Rock Pier in White Rock, British Columbia.
      • Newton Athletic Park Artificial Turf, Practice Field, Tennis Court, and Walking Path in Surrey, British Columbia.
      • Royal Athletic Park in Victoria, British Columbia.
      • Rapid Fire Theatre in Edmonton, Alberta.
      • Bissell Centre in Edmonton, Alberta.
      • Lac La Ronge Indian Band – Kitsaki Hall in La Ronge, Saskatchewan.
      • RCMP Heritage Centre in Regina, Saskatchewan.
      • Riverview Community Centre in Winnipeg, Manitoba.
      • Dakota Community Centre in Winnipeg, Manitoba.
      • Victims of Flight PS752 Memorial in Unity Park in Richmond Hill. Ontario.
      • Hamilton Downtown Family YMCA in Hamilton, Ontario.
      • Bob MacQuarrie Recreation Complex in Orleans, Ontario.
      • Toronto Metropolitan University Medical School in Brampton, Ontario.
      • Exploramer Shark Pavilion in Sainte-Anne-des-Monts, Quebec.
      • L’Espace Hubert-Reeves in Charlevoix, Quebec.
      • Chantier Naval Forillon in Gaspé, Quebec.
      • Centre sportif de Montreal-Nord in Montreal, Quebec.
      • Place Marcel-François-Richard in Ville de Beaurivage, New Brunswick.
      • SeaRoots Alliance Wellness Centre in Souris, Prince Edward Island.
      • Breakwater Installation in Petty Harbour-Maddox Cove, Newfoundland and Labrador.
      • Baddeck Recreation Facility in Baddeck, Nova Scotia.
      • Inuit Nunangat University.
  • $213.8M over five years, starting in 2025-26, to the Major Projects Office to approve nation-building projects.

Immigration, Settlement, and New Canadians

  • $168.2M over four years, starting in 2026-27, and $35.7M ongoing for the 2026-2028 Immigration Levels Plan to establish permanent resident admission targets at 380,000 per year for three years, and increase the share of economic migrants from 59% to 64%. The Plan will reduce target of new temporary resident admissions from 673,650 in 2025 to 385,000 in 2026, and 370,000 in 2027 and 2028.
  • $120.4M over four years, starting in 2026-2027, to Immigration, Refugees and Citizenships Canada and the Canada Border Services Agency to support a one-time initiative to recognise eligible Protected Persons in Canada as permanent residents over the next two years.
  • $19.4M over four years, starting in 2026-2027, to Immigration, Refugees and Citizenship Canada and other departments to undertake a one-time measure to accelerate the transition of up to 33,000 work permit holders to permanent residency in 2026 and 2027.
  • $97.0M over five years, starting in 2026-2027, to Employment and Social Development Canada to establish the Foreign Credential Recognition Action Fund to improve fairness, transparency, timeliness, and consistency of foreign credential recognition, with focus on health and construction sectors.

Indigenous Canadians

  • $10.1M over three years, starting in 2025-2026, to the Federal Initiative on Consultation to Crown-Indigenous Relations and Northern Affairs Canada to support meaningful participation of Indigenous shareholders in consultation processes throughout the review cycle of national interest projects listed under Building Canada Act.
  • $40.0M over two years, starting in 2025-2026, to Indigenous Services Canada through the Strategic Partnerships Initiative to support Indigenous capacity building and consultation on nation-building projects.
  • $1.0B over four years, starting in 2025-26, to Transport Canada to create the Arctic Infrastructure Fund that will invest in major transportation projects in the North to support economic development and job creation in Northern communities, advance Indigenous economic reconciliation, and promote further trade diversification, with the Government recognizing that Inuit, First Nations, and other communities are best placed to identify both military and local needs.
  • $25.5M over four years, starting in 2025-26, to Crown-Indigenous Relations and Northern Affairs Canada to facilitate the Arctic’s Infrastructure Fund.
  • $41.7M over four years, starting in 2025-26, to Canadian Northern Economic Development Agency, to help accelerate regulatory processes in Canada’s north – including in consultation with Indigenous governments and organizations, and local northern communities.

Research, Development, Science, and Industry

Veterans

  • $184.9M over four years, starting in 2026-27, and $40.1M ongoing to Veteran Affairs Canada to stabilize and modernize processing and administration of disability benefits.  

Youth and Children

Editor’s Note (November 6, 2025): Since this article was originally published on Budget Day (November 4, 2025), we have edited this article for clarity and style and to provide additional context and information. Specifically, we have reported on the Minister of Finance’s position with respect to Recommendation 430 of the Finance Committee’s Pre-Budget Consultations Report.

Many contributors from Miller Thomson’s National Charities and Non-Profits Group helped to assemble this special issue of the 2025 Federal Budget.

Special thanks go to Michael Blatchford, Michelle Boatter, Sarah Fitzpatrick, Elena Hoffstein, Bryan Millman, Stephen Hsia, Dana Kriszenfeld, Emmanuelle Laliberté, Susan Manwaring, Daniel Szeto, Rebekah Timm, and Andrew Valentine.

Please also see Miller Thomson’s Tax Group’s companion article on the 2025 Budget’s tax proposals and changes more generally.

Have questions about the 2025 Budget and how it affects your organization? A member of our Charities and Non-Profits Group would be pleased to speak with you. For more insightful charity law perspectives and timely updates from our group, please subscribe to our Social Impact Newsletter.