The Budget proposes an amendment to expand the availability of
"qualified donee" status to certain foreign charitable
foundations. Entities that are "qualified donees"
are eligible to receive outright grants from registered Canadian
charities and can issue official donation receipts for gifts from
individuals and corporations, thereby allowing the donor to claim
charitable donation credits or deductions against Canadian
Under the current rules in the Act, which were introduced in the
2012 Budget, a foreign charitable organization that has received a
gift from the federal Crown within the previous 24 months can apply
for status as a qualified donee, provided that the charity is
carrying on disaster relief work, urgent humanitarian aid, or other
work in the national interest of Canada (effective for applications
made by foreign charitable organizations made on or after January
1, 2013). Whether a given foreign organization meets these
criteria is at the discretion of the Minister of National Revenue
in consultation with the Minister of Finance. Qualified donee
status is granted for a 24-month period that begins on a date
chosen by the Minister of National Revenue, and the organization is
included on a list of registered foreign charities maintained on
the Canada Revenue Agency's website.
The current rules are drafted such that this qualified donee
status is available only to foreign entities that would meet the
definition of "charitable organization" in the Act.
Among other things, this would generally mean that the organization
is spending more than 50% of its funds on its own charitable
activities, as opposed to gifts to other charities.
Charitable foundations, which spend more than 50% of their income
on grants to other charities, are not included.
Budget 2015 proposes to amend the Act to allow foreign
charitable foundations (in addition to foreign charitable
organizations) to be registered as qualified donees if they
otherwise meet the conditions for status above and are granted
qualified donee status by the Minister of National Revenue in
consultation with the Minister of Finance. It is not clear to
us that this change was necessary as a matter of statutory
interpretation, but it is a useful clarification.
It is unclear whether this will result in a significant number
of new foreign entities being registered. Relatively few
organizations have been granted qualified donee status since the
new criteria, introduced in the 2012 Budget, became effective in
2013. Nonetheless, the additional flexibility is
The Budget confirms that this measure will apply upon Royal
Assent to the enacting legislation.
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