Inside the Rapidly Organized ‘Hill Day’ For a Legislative Amendment on Non-Qualified Donees

BIA is Current “Direction and Control” Guidance “On Steroids”

Sitting on a bench just outside the senate chamber on Wednesday, Senator Ratna Omidvar was composed, but visibly frustrated.  

For more than three years, Omidvar has pushed to try and make it easier for non-profits to get money from Canadian funders. In 2019, after a senate report called for legislative change on this issue, she tabled private members Bill S-222 aiming to do just that. The bill had strong support, but the government was prorogued so she was forced to start “all over again,” she said.

Bill S-216 has been her second crack at it. With patience, she’s steered the private members bill through the Senate and through its first reading in the House of Commons.

All was well on track until April 7, when the Liberal government issued a surprise announcement in their annual budget: they too saw the importance of making it easier for non-profits to access support, and would take up Omidvar’s charge, implementing “the spirit” of her bill in their own legislation.

“We were all really thrilled,” she said. The best outcome [for any private member’s bill] is when the government says, ‘This is a sensible idea, I’m going to put it into my platform.’”

Omidvar and many sector advocates were also encouraged by what this would mean for the implementation timeline for the new legislation. (Every private member’s bill must undergo two years of consultation before it becomes law. Not so for legislation by the government, which comes into effect immediately.)

But what initially seemed like the best part of the government’s budget promise to act on Bill S-216 has come to seem like a curse.

In late April, the government released the Budget Implementation Act (BIA) – draft legislation to fulfill this and other budget promises. Omidvar hadn’t been consulted on the language, nor had other sector associations like Imagine Canada or Philanthropic Foundations Canada.

And upon reading the text, Omidvar was awestruck, realizing that the legislation would actually make it harder for non-profits to access funding, she said – a reality which would come into force immediately once the bill is given royal assent.

Under the current regime, the Canada Revenue Agency (CRA) issues instructions on how charities can work with non-profits in their “guidance” documents. By being in the guidance rather than the law, charities have some flexibility on how to achieve their stringent “direction and control” responsibilities with their non-profit partners – whether they ask for an annual written report or a bi-annual verbal one, for instance.

The BIA, however, would kill this flexibility, said Omidvar: “They have actually transported the direction and control guidance, put them on steroids and put them in the regulation.”

And, to make matters even clearer, the legislation clarifies that if the BIA passes, Omidvar’s Bill S-216 will be deemed “moot,” she said. “They really don’t like my bill.”