On March 14, 2024, the Charities Directorate of the Canada
Revenue Agency (“CRA”) released the Report on the Charities Program 2021 to
2022 (the “Report”). This document provides a
summary of the Charities Directorate’s activities during its
fiscal period from April 1, 2021 to March 31, 2022. The Report
notes that there are 74,615 charitable organizations in Canada, as
well as 6,368 private foundations and 4,908 public foundations, for
a total of 85,891 registered charities. Charities reported spending
$4 billion on activities outside of Canada.
The Report states that 82% of applicants used online services
for submissions in the 2021-2022 fiscal period. During this period,
the CRA received a total of 2,375 applications for charity
registration, along with 84 applications for registration as an
“other qualified donee” (“OQD”), with
a qualified donee being a registered charity, a registered Canadian
amateur athletic association, a registered journalism organization,
amongst others. These numbers differ from the previous fiscal
period as set out in the Report on the Charities Program 2020 to
2021, specifically during which 1,800 applications were
made and with 91% of those being made online. Of those applications
made in the 2021-2022 period, 10% were described by the CRA to be
of a “high risk/complexity level”, which is comparable to
the prior years.
Approval of the application was the most common outcome for
those seeking charitable status. Refusal of charitable status was
very low, totalling only 1% of applications. This was higher for
OQDs, where refusal made up 13% of the applications. The most
common reasons for refusal of charitable status were promotion of
sport, non-charitable activities, acting as a conduit, lack of
direction and control, and lack of information.
According to the Report, the CRA seeks to foster voluntary
compliance within the charitable sector, utilizing a risk-based
strategy to tailor interventions accordingly. Further to this, the
CRA completed 103 virtual Charities Education Program
(“CEP”) visits (i.e. one-on-one virtual visits
with registered charities to enhance their understanding of
compliance obligations) and 182 audits in the 2021 to 2022 fiscal
period. The outcome of these 182 audits consisted of 81 education
letters, 45 compliance agreements, 28 notices of intention to
revoke, 7 “no changes”, and 6 penalties/suspensions.
As well, there were 1,720 compliance revocations in the
2021-2022 period, including 974 voluntary revocations, 714
delinquent revocations for failure to file the T3010, and 29
revocations for cause. This was up from the 2020-2021 fiscal
period, which saw 841 compliance revocations, with a similar
breakdown for types of revocations. The most common findings in
audits of non-compliance in both periods included
incomplete/incorrect returns, incomplete/inaccurate donation
receipts and inaccurate books/records.
The Charities Directorate also supported the CRA administered
subsidy programs, such as the Canada Emergency Wage Subsidy
(“CEWS”) and the Canada Emergency Rent Subsidy
(“CERS”), with 236,322 approved CEWS applications and
44,302 approved CERS applications. These programs saw a large
increase from the earlier 2020-2021 period, which had 138,539 CEWS
and 12,307 CERS applications approved.
Among other consultations and stakeholder engagement, including
the Technical Issues Working Group and the
Federal/Provincial/Territorial Network of Charity Regulators, the
Report briefly summarizes the Advisory Committee on the Charitable
Sector’s (“ACCS”) work, which was also reviewed most
recently in the October 2022 Charity & NFP Law
Update. Since its inception, the ACCS has released three
reports, with the CRA reviewing each recommendation to assess
implementation requirements, lead responsibilities, resource needs,
and potential next steps. Notably, the CRA undertook an open call
for applications to appoint new committee members, emphasizing
inclusivity and diversity in representation. Following this
process, nine new members were appointed to the ACCS on April 5,
2022, with the intent of providing a comprehensive and varied
perspective within the Committee to address the diverse needs of
the charitable sector.
With regard to enquiries from the charitable sector, the Report
stated that in the 2021 to 2022 fiscal period, charities primarily
requested account updates, such as changes to directors, addresses,
legal names, and contact information, which reflects an increasing
trend toward utilizing online services for such requests in
response to the digital shift. Furthermore, alongside addressing
written inquiries, the Charities Directorate’s client service
representatives aided charities with various needs over the phone,
with common enquiries revolving around online services and My
Business Accounts, while also assisting with account modifications
and providing guidance on Form T3010, applications, and
receipting.
During the 2021 to 2022 fiscal period, the Report indicated that
the Charities Directorate received a total of 55,077 telephone
enquiries and 12,310 written enquiries. For written enquiries, the
service standards aimed for routine responses within 45 days and
complex responses within 120 days, both of which were met 99% of
the time. In terms of telephone service, the standard was to
respond within two minutes, which was achieved 88% of the time.
Additionally, the target of 85% of callers successfully reaching
the telephone service was exceeded, with a success rate of 98%.
The Charities Directorate undertook 38 audits in the 2021-2022
year related to potential terrorist abuse of Canadian charities.
The results of these included 14 notices of intention to revoke, 12
compliance agreements, 7 penalties/suspensions, 4 education
letters, and 1 pre-registration audit.
The Report provides a helpful snapshot of the activities that
the Charities Directorate undertook in its 2021 to 2022 fiscal
period. Charities are encouraged to review the Report and its
findings in more detail as a means of better understanding the
administrative landscape in which they operate.
​Read the March2024Charity& NFP Law
Update
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