A year ago, Senator Ratna Omidvar tabled a bill (originally Bill S-222) proposing changes to the Income Tax Act (Canada). The changes would allow charities to collaborate with other organizations more efficiently, furthering the potential to create positive impact in both local and international communities. The Social Impact Group at Miller Thomson has been following this Bill through the legislative process with keen interest.
The proposed changes, as described in detail in our previous article, would eliminate the requirement for charities to exercise “direction and control” when providing resources to “non-qualified donees”, such as non-profit organizations. The Bill, if accepted into law, would allow a charity to make a transfer to a non-qualified donee, so long as the charity takes reasonable steps to ensure that the transferred resources are used exclusively for a charitable purpose. If approved, the changes to the Income Tax Act would come into effect two years after the Bill receives royal assent.
Bill S-222 passed its third and final reading in the Senate on June 17, 2021. It then moved to the House of Commons of Canada for its first reading on June 23, 2021. Shortly after, the House of Commons adjourned for the summer… then the snap federal election was called. As a result, Bill S-222 died on the order paper, and a new bill was needed to bring the proposed changes before the newly elected Parliament.
Senator Ratna Omidvar introduced Bill S-216, which is identical in substance to the previous Bill S-222. Bill S-216 made its way through Senate of Canada and passed its third and final reading on December 9, 2021. The Bill was introduced to the House of Commons by Conservative MP Philip Lawrence (Northumberland—Peterborough South) and passed its first reading on February 3, 2022.
We will continue to monitor the progress of the Bill with anticipation. If you have any questions about the possible impacts of these proposed legislative changes on your charity, please feel free to reach out to any member of our Social Impact Group.