Canada Revenue Agency

Canada Revenue Agency

June 26, 2008 14:49 ET

Minister of National Revenue Welcomes Recommendations From the Small and Rural Charities Consultation Initiative

OTTAWA, ONTARIO--(Marketwire - June 26, 2008) - The Honourable Gordon O'Connor, Minister of National Revenue, met with representatives of the charitable sector yesterday for the release of the report Small and Rural Charities: Making a Difference for Canadians.

The report includes an ambitious action plan, developed jointly by a panel of representatives from the Canadian charitable sector and by the Canada Revenue Agency (CRA), aimed at helping small and rural charities meet their legislative and regulatory obligations more simply and easily. The report follows a series of consultation sessions and panel discussions held across Canada in the fall of 2007, as part of the CRA's Small and Rural Charities Initiative. Specifically, the joint action plan proposes activities to be undertaken by the CRA to:

- provide tailored services to the sector;

- reduce compliance burden;

- improve awareness and access to information;

- provide educational tools;

- lead collaborative initiatives with federal, provincial and territorial partners; and

- advance sector roles and responsibilities.

For more details about the joint action plan, see the attached backgrounder, titled Small and Rural Charities Initiative: Making a Difference for Canadians.
http://www.cra-arc.gc.ca/newsroom/releases/2008/jun/nr080626b-e.html

The CRA regularly consults with the charitable sector, as well as with other federal, provincial and territorial partners, to find new ways to enhance its services and administrative processes.

Copies of the report are available on the CRA Web site at www.cra.gc.ca/charities. If you are unable to access the report online, you can call 1-800-267-2384 to obtain a copy.

Related documents:

News release: Canada Revenue Agency launches consultations with small and rural charities (October 9, 2007)
http://www.cra-arc.gc.ca/newsroom/releases/2007/oct/nr071009-e.html

Fact Sheet: Small and Rural Charities Initiative (June 26, 2008)
http://www.cra-arc.gc.ca/newsroom/factsheets/2008/jun/fs080626-e.html


BACKGROUNDER

Small and Rural Charities: Making a Difference for Canadians

The report Small and Rural Charities: Making a Difference for Canadians outlines and highlights the joint action plan developed collaboratively by the panel members and the Canada Revenue Agency (CRA). Sixty-six action items aimed at improving services and reducing the administrative burden for small and rural charities have been identified in the joint action plan.

Of these items:

- 19 action items, or 29 percent, have been completed;

- 16 action items, or 24 percent, will be initiated this fiscal year (2008-2009);

- 17 action items, or 26 percent, will be initiated in 2009-2010; and

- 14 action items, or 21 percent, require further study to determine feasibility.

The activities highlighted in the joint action plan are divided into six main themes:

Provide tailored services to the sector

- Recognizing the distinct challenges of small and rural charities, and understanding their information needs, the CRA will develop and deliver services that are tailored to the charities' specific needs, rather than a "one-size-fits-all" approach to regulating charities.

- The CRA will implement additional training for new and existing officers who provide information to the public and charities through the Charities Directorate's toll-free number to better meet callers' needs and ensure their questions are answered accurately and consistently.

- The CRA will work with registered charities and non-profit organizations serving the charitable sector, through the Charities Partnership and Outreach Program, to deliver educational programs including community based, in-person service for small and rural charities.

Reduce compliance burden

- Recognizing the limited capacity of volunteer support to meet compliance obligations for small and rural charities, the CRA will work towards reducing compliance burden through a number of administrative and educational activities. These include:



- providing charities with a glossary of technical terms;
- increasing the amount of information about compliance requirements in
outreach programs and products; and
- distributing a new checklist tool to ensure that charities are aware
of their reporting obligations, reporting timelines and how to
maintain their registered status.


- To assist charities, particularly small and rural charities, the CRA will also review, simplify, and enhance the annual information return and companion guide, in order to reduce paperwork burden.



Improve awareness and access to information

- To improve awareness of, and access to, information for small and rural charities, the CRA will ensure that revised materials, publications, newsletters and Web site content are clearly written and easy to understand, and that the content and quality of these products are consistent in French and English.

- The CRA will also continue to improve and provide Charities Information Sessions to charities across Canada by tailoring sessions to the needs of specific audiences such as small and rural charities.

- Through the Charities Partnership and Outreach Program, the CRA will increase both the number of educational products available to charities and the communication channels used to deliver them. The CRA commits to examining the costs and utility of creating and distributing a DVD version of the Charities Information Session to identified charities, and will also experiment with Web-based seminars in the future.

Provide educational tools

- The CRA will improve existing educational tools to align with the needs of small and rural charities and create new tools to ensure charities and applicant organizations are informed, and aware of, registered charities' obligations under the Income Tax Act.

- The CRA will investigate how best to develop a way for charities to keep pertinent information, which could include the development of a resource binder. This new tool will allow charities to pass on information to new volunteers with their organizations.

- The CRA has recently updated the Charities and Giving Web site based on input received throughout the consultation process. Information is now organized and displayed in a clear and concise manner that is easily accessible. There are two current action items for the Web site; the first is to make the Web site more accessible for the visually impaired and the second is to provide links to sector resources. These items require further study to determine the implications as the Web site supports all the programs and activities of the CRA.

- The CRA is providing funding to six organizations through the Charities Partnership and Outreach Program. The recipients are, and will be developing and delivering innovative education and training on regulatory compliance for the charitable sector. This will complement and support information provided by the CRA.

Lead collaborative initiatives with federal, provincial and territorial partners

- The CRA acknowledges the challenges faced by small and rural charities in reporting to regulators and will continue to work with the provinces and territories through the Federal/Provincial/Territorial Network of Charity Regulators in support of ongoing dialogue between regulators. Collaborative efforts with the province of Ontario have resulted in an agreement for the CRA to take over the regulation of charities incorporated in the province of Ontario.

- Some of these action items have been identified as requiring further study because of broader public policy issues. The CRA commits to communicating those issues to the appropriate government organizations for their consideration.

Advance sectors roles and responsibilities

- As the regulator of registered charities, the CRA has a leadership role to play in helping large umbrella organizations better understand the unique challenges facing small and rural charities and how these umbrella organizations can be valuable resources to small and rural charities.

- The CRA recognizes the value provided by volunteers working with registered charities and their contribution to Canada. The CRA will help the sector promote the value of the voluntary sector by encouraging the creation of community networks and providing online links to government departments involved with volunteerism, such as Human Resources and Social Development Canada.

- The CRA will also provide a forum for charities to promote and highlight the contributions of their volunteers to the public through the new Form T3010A, Annual Charity Information Return.

The report is also intended to be an educational resource for the sector. The CRA has included a section on the voluntary sector, highlighting its unique challenges and its contribution to our communities, a section describing how charities are regulated in Canada, and a description of government and sector resources available to the voluntary sector to assist it in both fulfilling its charitable purposes and meeting its administrative and legislative requirements.


FACT SHEET

Small and Rural Charities Initiative

The Canada Revenue Agency (CRA) recognizes that small and rural charities make significant contributions to the well-being of their communities and to all Canadians through their dedication and service. The CRA also understands that small and rural charities face unique challenges that may constrain their ability to meet their regulatory obligations under the Income Tax Act. In particular, small and rural charities have limited resources and rely mostly, if not solely, on volunteers to carry out their activities.

The Small and Rural Charities Initiative was undertaken to gain a better understanding of these challenges, thereby improving services and processes and reducing the administrative burden for small and rural charities. This initiative reflects the CRA's commitment to transparency and to the reduction of the administrative burden for the charitable sector.

The first phase of the Small and Rural Charities Initiative consisted of six one-day workshops in October 2007 with participants representing a cross-section of the small and rural charities. The workshops were held in Toronto (October 3), Saskatoon (October 11), Lethbridge (October 13), Kelowna (October 15), Trois-Rivieres (October 19), and Moncton (October 24).

The workshops were open forum and designed to allow participants to share their experiences, their best practices, and their concerns with the CRA. The workshop discussions included:

- Education - assessment of information provided in publications, on the Web site, and in the information sessions to determine if it is comprehensive and understandable.

- Reporting - discussion of annual returns, forms and obligations.

- Registration - application, model objects.

- Service delivery - telephone and correspondence services and standards.

- Compliance and enforcement - educational letters, compliance approach, compliance agreements, audits, sanctions, revocations, and barriers to compliance.

- Tools - frequently asked questions, checklists or other tools that could assist charities, electronic forms, etc.

- Rules - identify which rules, whether based in legislation, regulation, or policy, are too complex, misunderstood, or pose compliance challenges.

The second phase of the Small and Rural Charities Initiative consisted of three meetings with nine panel members who participated in the first phase. Brian McCauley, the Assistant Commissioner of the Legislative Policy and Regulatory Affairs Branch, chaired the panel which met in November and December 2007 to review and validate the outcomes of the first phase and work collaboratively to develop a joint action plan for the Minister of National Revenue.



The action plan contains 16 main action items divided into the following 6
themes:

- provide tailored services to the sector;
- reduce compliance burden;
- improve awareness and access to information;
- provide educational tools;
- lead collaborative initiatives with federal, provincial and territorial
partners; and
- advance sector roles and responsibilities.


The panel's final report, including the joint action plan, is available on the CRA Web site at www.cra.gc.ca/charities. You can also request a copy of this report by calling the Charities Directorate at 1-800-267-2384.

Profile of small and rural charities

For the purposes of the Small and Rural Charities Initiative, small charities are defined as registered charities with total revenues under $100,000, as reported annually on Form T3010A, Registered Charity Information Return. Rural charities are registered charities that have a postal code where the second character is a "0," for example, K0A 1A1 (coding used by Canada Post to identify rural areas).

Small and rural charities depend more on earned income from non-government sources and donations than on government funding. Small and rural charities also tend to have few, if any, employees and rely mainly on volunteers to deliver their services, leading to concerns for both retention and recruitment.

In 2006, there were 83,372 registered charities in Canada. Small charities accounted for 54% and rural charities accounted for 22% of all registered charities. In all, 14% of charities met the definitions of both small and rural charities.

Contact Information

  • Canada Revenue Agency
    Beatrice Fenelon
    Media Relations
    613-941-6269