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Cooperative and Non-Profit Social Housing
The Budget proposes to provide support to affordable housing providers by eliminating mortgage prepayment penalties on long-term, non-renewable loans with the Canada Mortgage and Housing Corporation (CMHC). This measure is intended to enable social housing providers to access private financing at more favourable interest rates, thereby freeing up capital for needed repairs and to improve the quality of affordable housing units. It responds to an identified concern that many co-operative and non-profit housing providers are currently holding long-term, non-renewable loans with CMHC at high interest rates.
This measure will be introduced in 2016. Entities that provide social housing and that are currently holding high interest loans with CMHC may wish to investigate refinancing options made possible by this change.
The Budget also contains an announcement of new money for social housing, some of which is to be delivered by the non-profit sector.
Expanding Use of Business Numbers
The Budget announces that the government proposes to simplify the federal business number registration regime. Currently, organizations (including registered charities and non-profit organizations) may need to apply for multiple business numbers with different federal departments (e.g., CRA, Ministry of Labour, ESDC). The Budget proposes the implementation of a common business number that would apply across multiple federal programs. This is designed to reduce paperwork and simplify the process of interacting with government.
While this measure appears designed primarily with businesses in mind, it may also be valuable to charities and non-profit organizations that interact with multiple federal agencies.
The Budget noted recent announcements related to the reduction of credit and debit card fees, as well as the introduction of an enhanced Code of Conduct for the Credit and Debit Card Industry in Canada. The reduction of the average effective interchange rate to 1.5% for the next five years represents a nearly 10% reduction in fees. The enhanced Code of Conduct provides for new fee disclosure, dispute resolution mechanism, and branding requirements.
Charities that receive donations or otherwise accept payments by credit and debit cards will benefit from these measures through a reduction in fees as well as more flexibility and options in dealing with credit and debit care providers. The Budget noted that the government is currently consulting on the oversight of retail payment systems to support competitive and innovative ways to meet the payment needs of Canadians while ensuring that the payment system remains safe.
The Budget contains a variety of specific funding announcements for advanced research, some of which will flow to hospitals and universities. “Economic Action Plan 2015 proposes to provide more than $1.5 billion over five years to advance the renewed science, technology and innovation strategy’s objectives, including long-term sustained advanced research support through the Canada Foundation for Innovation and the federal granting councils.”
The Budget announces changes to for-profit corporate law designed to improve gender diversity on boards and make other transparency related improvements. The announcement, which is not specific, states that “Amendments to related statutes governing cooperatives and not-for-profit corporations will also be introduced to ensure continued alignment among federal laws.” While gender diversity is clearly desirable in the non-profit world as elsewhere, it will be interesting to see how gender diversity (on a “comply or explain” basis) will be promoted as a matter of corporate law in the non-profit world.
International Development Finance
The Budget announces a new development finance initiative designed to encourage private sector investments in low and medium income jurisdictions where the federal government (through Canadian charities, we assume) is already providing development assistance. It is possible that some Canadian charities will be able to invest in the for-profit sector in a way that will engage with this new program. As well, the new program gives Canadian development charities an opportunity to consider cooperation with Canadian businesses investing in the developing world.