The Sector Speaks Loudly on Budget Implementation Act, But Has it Been Heard?

This excerpt from The Philanthropist Journal discusses the disconnect between the Budget Implementation Act and the spirit of Senator Omidvar’s Bill S-216, the Effective and Accountable Charities Act.

The message has been delivered in personal meetings, on social media posts, through open letters and targeted appeals to key ministers in the Liberal government.

The philanthropic sector has been seized with a sense of urgency and has made it clear that proposed legislation, once trumpeted as embracing the spirit of progressive change, threatens to set back efforts by charities to more easily fund equity-seeking groups, baking into law a paternalistic and colonial system it seeks to end.

It is a full-throated pushback. But has it been effective?

“I think we’ve been heard,” says Bruce MacDonald, president and CEO of Imagine Canada.

“Our case has been understood – that there is a disconnect between the spirit of what was in the budget and the Budget Implementation Act. We’re hoping that translates into amendments.”

That conclusion will be put to the test as early as next week when the Commons Finance Committee is expected to begin clause-by-clause study of Bill C-19, the budget implementation bill.

MacDonald made the sector’s case directly in an appearance before the Finance Committee, but he had no shortage of allies who flooded Parliament Hill to meet with officials in Prime Minister Justin Trudeau’s office, government, and opposition MPs. He said the effort was effective because it involved a coalition of organizations with lived experience under the existing rules, ranging from those working in international development to non-qualified donees who have been hurt by the current system.

At issue is the sector’s attempt to eliminate the “direction and control” provisions in the Income Tax Act, which compel charities to take ownership of programs as if they were their own when dealing with organizations that do not have charitable status, known as non-qualified donees.

Senator Ratna Omidvar championed that cause; her legislation replacing direction and control with “resource accountability” passed the Senate, and her Bill S-216, now at second reading in the House of Commons, was taken up by Conservative MP Philip Lawrence.

The government has signalled that S-216 will die when the budget implementation bill is passed, adding more urgency to the sector’s lobbying efforts.

“This [bill] makes ‘direction and control’ look like a picnic,” says Bruce Lawson, president and CEO of The Counselling Foundation of Canada. “This is not written in the spirit of S-216. It makes things worse.”

There are signals that this message is landing in the capital.

Jessica Eritou, a spokesperson for Finance Minister Chrystia Freeland, told The Philanthropist Journal via email that the department was working “closely and collaboratively” with Omidvar – following criticism that the government proposals were crafted without any input from the senator or key stakeholders.

“Our tax rules should support the work of Canadian charities and minimize their administrative burdens, while still ensuring accountability for how charitable resources are used,” Eritou said. “The government is committed to supporting these objectives, while allowing greater flexibility for charities to support non-profit groups that may not have the ability to pursue charitable status of their own and will continue to work with them on this matter.”

Read the full article in The Philanthropist Journal