As described in detail in our March issue, the 2011 Budget included a number of charity tax changes. However, the government was then defeated and an election called. Despite these events, we suggest that prudent charities behave generally as if the budget changes will be coming back with their originally proposed effective dates.
The charities changes in the Budget were not policy changes driven by the Minister of Finance but were rather technical changes driven by Finance bureaucrats. None of the changes have become election issues. As a result, our expectation is that the Budget changes will come back after the election, regardless of election outcome. Furthermore, the likely effective dates of the changes will be as proposed originally. In 1980, the new Liberal government brought back the technical tax changes from the December 1979 defeated Progressive Conservative budget with December 1979 effective dates. While there is no guarantee that the same will happen this cycle (and Finance staff are not prepared to discuss the issue), we do so expect.
Charities should therefore begin to consider compliance with the 2011 Budget changes.