Friday, November 27, 2009
The C.D. Howe Institute recently released a new paper by Adam Aptowitzer, Bringing the Provinces Back In: Creating a Federated Canadian Charities Council. The paper proposes replacing the Canadian Revenue Agency [CRA] with a “Charities Council” as the primary regulator of charitable organizations in Canada. The proposed structure of the Charity Council borrows certain aspects of the Charity Commission of England and Wales, but the paper acknowledges the impossibility of wholesale adoption in Canada due to constitutional difficulties.
The paper offers two primary arguments against the CRA’s continued role as the national regulator of Canadian charities; one based on organizational mandate, the other based on history. It asserts that the regulation of charities is directly at odds with the CRA’s mandate to protect the tax base because the nature of charities is to reduce the tax base through donation tax credits. Additionally, the CRA is the current regulator as an accident of history. The CRA’s role was a response to a failure of the provinces to provide regulation that was their Constitutional responsibility. The result has been a rigid regulatory system that impedes the formation of new charities and that favors the principles of tax law over those of the charitable sector.