Mar 23, 2020
COVID-19: Update From the Charities Directorate of the Canada Revenue Agency (CRA)
By Linda J. Godel and Lauren Crosby
Last week, we wrote an article about key regulatory considerations for charities and non-profits arising from COVID-19, and noted that not much information was available at that time from the regulators about how the virus would affect their service delivery.
Late Friday evening the Charities Directorate of the CRA released a statement about COVID-19 and its services (Statement). The Statement will be of interest to registered charities and to applicants for charitable registration (Applicants) as it clarifies the impact on charities’ annual reporting obligations, ongoing CRA audits, and applications for charitable registration (Applications).
The key points to take away from the Statement are as follows:
- All operations of the Charities Directorate are suspended until further notice, including its call centre (Suspension Period).
- During the Suspension Period:
- All registration activities (i.e., the review and approval of Applications) are on hold. We assume that for Applicants who were asked to provide further information about their Applications by a date that falls within the Suspension Period, these Applications will not be closed if they do not provide this information by the applicable deadlines. We also assume that extensions to provide this information will be granted once the Suspension Period is over.
- All requests for the approval of changes (such as requests for approval to change charitable purposes, year ends or charitable designations) are on hold.
- All audit activities are on hold (e.g. all audit appointments, visits, deadlines, etc. will be rescheduled.)
For charities required to file a Form T3010, Registered Charity Information Return (T3010 Return) between March 18, 2020 and December 31, 2020, the deadline for filing is extended to December 31, 2020. (This extension applies to charities with a fiscal year end between September 18, 2019 and June 30, 2020.) No mention was made of charities whose registrations were revoked, and who must also file their Form T2046, Tax Return Where Registration of a Charity is Revoked between March 18, 2020 and December 31, 2020, but we assume that similar extensions would apply.
- The Charities Directorate will provide further updates as the situation evolves.
The Statement did not specifically address whether charities that were issued a revocation notice (for any reason) or a notice of proposed sanctions before March 18, 2020 would receive an extension for the deadline(s) to, as applicable, file their outstanding T3010 Return(s) and/or object to the revocation or sanctions. The Statement also did not provide information about specific extensions that may be granted after the Suspension Period. We do, however, anticipate that the CRA will be flexible in regard to these matters.
During the Suspension Period, we will be helping our clients take proactive steps to protect their rights and meet their obligations when the Suspension Period ends. We will also be closely monitoring for any updates and will continue to be in regular contact with government agencies that regulate charities and non-profits to keep informed of the potential impacts that COVID-19 may have on our clients.
We would be happy to answer any questions that charities and non-profits may have about how COVID-19 may impact them from a regulatory perspective, or otherwise.
For legal advice on issues arising from COVID-19, please contact your Torkin Manes lawyer. For more information about dealing with COVID-19, please visit our COVID-19 Resource Center.