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Three years ago, the Special Senate Committee for the Charitable Sector published a report on how to improve Canada’s non-profit and charitable sector. It spoke to 160 different witnesses, reviewed dozens of submissions, and scrutinized every facet of the sector’s regulations. Fast-forward to today, and barely any of the Committee’s 42 recommendations have been implemented. 

Few are surprised. 

These 42 recommendations, ranging from large-scale tax reform to experimental initiatives to improve charitable giving, are less like arbitrary benchmarks for lawmakers and more like aspirational goals. Not that they aren’t seen as necessary by experts or social sector leaders — rather, many are too expansive to be accomplished anytime soon. 

Senator Ratna Omidvar, the co-chair of the Special Senate Committee on the Charitable Sector, isn’t worried. “In my experience on the Hill, getting 42 recommendations passed, whether they’re legislative or regulatory or policy — that’s a big mountain to climb,” she says. 

Between June 2019, when the report was first issued, and today, Canada endured a once-in-a-century pandemic that (so far) has killed 41,000 people. At the same time, it is battling the climate disaster. It is dealing with an opioid crisis that sometimes kills more people per day than COVID-19. The ongoing rediscovery of Canada’s genocidal treatment of Indigeous peoples, as well as anti-Black racism, have forced the federal government to act quickly. Then there are more mundane upheavals: two elections between 2019 and 2021 that forced the federal bureaucracy to suspend all work for months at a time. Also throw in an inflation crisis not seen in a generation. 

All in all, Canada’s government has spent the last two years making knee-jerk reactions to the latest crisis coming its way. 

Not all of these recommendations will be accomplished within the remaining years of the Liberal government’s term, either. Some may become multi-term projects, slogging along under guidance from multiple governments (and potentially multiple parties). Others may be diluted or rewritten to better suit the changing needs of the day, especially the recovery from COVID-19. Government moves slowly at the best of times. And other recommendations still might not require the government to take the lead at all. 

“Even if you don’t factor in COVID, it’s still a relatively short period of time to implement something of this nature,” says Reza Hasmath, a political science professor at the University of Alberta who studies the relationship between government and the social impact sector. 

The COVID-19 pandemic is not yet over, but the federal government is moving away from the ‘survival mode’ of the last two years into a more normal state of affairs. With that change in perspective comes an opportunity for Canada’s social sector to push for all 42 of the Committee’s recommendations to be realized. 

LEGEND: Each recommendation is rated on a six-colour scale

RED: No progress. The government or any advisory bodies charged with reviewing it are refusing to implement the recommendation as written. 

ORANGE: No progress, but the government or an advisory body have promised to at least consider it. 

YELLOW: Some progress has been made. Perhaps a committee has begun looking into it, or the very early stages of legislation are in the works. 

BLUE: Progress is coming along. Legislation or regulations are in the works, but nothing has been passed yet. 

GREEN: The recommendation has been fulfilled, in whole or in part. 

GRAY: Unclear. Not enough evidence to decide one way or the other.

The easy wins

Some of the Special Senate Committee’s recommendations can be moved on fairly quickly. They often include requests for the Advisory Committee for the Charitable Sector, a body that advises the Canadian government on social impact-related issues, to consider. 

While these requests might not lead to widespread change, they are a lot easier to set in motion than a complex overhaul of Canada’s charity laws. Moreover, some of these shorter-term recommendations act as building blocks for larger commitments down the road. Either way, these are goals the sector can advocate for (and see progress) within the next few years. 

That the Government of Canada encourage federal departments and agencies to develop and administer recognition programs for volunteers who assist in the delivery of their government services. 

Progress so far: The Canadian government’s response to the Senate Special Committee’s recommendations in March 2021 says recognition programs are up to the head of each federal department, but is supportive of the idea. It is unclear whether any volunteer recognition programs have actually been created.

That the Government of Canada, through the Canada Revenue Agency, include questions on both the T3010 (for registered charities) and the T1044 (for federally incorporated not-for-profit corporations) on diversity representation on boards of directors based on existing Employment Equity guidelines.

Progress so far: Senator Omidvar introduced a motion in February 2022 calling on the federal government to include these questions on the T3010 and T1044 forms. However, it hasn’t passed, and the CRA hasn’t yet implemented these changes. 

That the Government of Canada, through the Minister of Revenue and the Commissioner of the Canada Revenue Agency, direct the Advisory Committee on the Charitable Sector to review existing tax measures available to individual donors in order to strengthen the culture of giving among new and current charitable donors.

Progress so far: The ACCS’s public reports say nothing about reviewing tax measures to individual donors. 

That the Government of Canada’s procurement strategy be further modified to remove barriers to the participation of charitable and non-profit organizations, with a particular focus on suppliers with smaller staff complements.

Progress so far: The 2020 federal budget said Public Services and Procurement Canada (PSPC) would work on better access to procurement opportunities for nonprofits and charities. That said, it isn’t clear whether the Canadian government’s procurement strategy has actually been modified to help small suppliers. 

That the Government of Canada prioritize data about the charitable and non-profit sector in all Statistics Canada economic surveys, including the Satellite Account of Nonprofit Institutions and the General Social Survey on Giving, Volunteering and Participating; and that the Government of Canada support collaboration between Statistics Canada and the charitable and non-profit sector to determine what additional data could be collected and disseminated in a timely and consistent manner to support the evidence base for decisions by organizations in the sector.

Progress so far: When Statistics Canada developed the 2018 General Social Survey on Giving, Volunteering and Participating, the federal government said it embarked on an “unprecedented consultation progress” with sector leaders and academics. The results, according to its March 2021 letter, addressed many of the gaps in charitable data identified by experts. Statistics Canada also entered into an agreement with ESDC during the 2020-2021 fiscal year to gather detailed statistics about the non-profit sector. This agreement will also provide high level national estimates on a quarterly basis.

That the Government of Canada, through the Canada Revenue Agency, seek the advice of the Advisory Committee on the Charitable Sector on what additional information could be included in the Agency’s T3010 form that would support the work of the sector.

Progress so far: The ACCS has considered the question of using the T310 form to gather diversity data. Due to privacy considerations, the ACCS says this form may not be the best way to do so. The issue of making diversity questions optional (rather than mandatory) means any diversity data collected by the T3010 form would be incomplete. That said, the recommendation has arguably been fulfilled. 

That the Government of Canada establish a funding stream for projects to incent organizations to develop shared technologies to manage their administrative requirements.

Progress so far: According to the Canadian government’s 2021 letter, such funding streams already exist through Innovation, Science, and Economic Development Canada’s programming. For instance, it says, participants in the Strategic Innovation Fund’s networks can use operating or administrative funds to buy administrative technology for the entire ecosystem. 

That the Government of Canada through the Minister of National Revenue seek the advice of the Advisory Committee on the Charitable Sector with respect to modifying CRA restrictions on accessing other forms of capital by charitable and non-profit organizations; and that all federally funded initiatives with respect to innovation that are available to for-profit organizations be available to and promoted among charitable and non-profit organizations.

Progress so far: The Canadian government promised to ask the ACCS about modifying CRA restrictions in its March 2021 letter to the Special Senate Committee. If the ACCS was interested in examining the issue, the CRA “would consider any resulting recommendations from the ACCS and refer them to the appropriate department or agency if required.” No formal recommendations have been made by the ACCS. 

That the Government of Canada, through the Advisory Committee on the Charitable Sector, review the common law meaning of charity to determine whether Canada should follow the approach of other jurisdictions, such as Australia and England, and enact legislation to broaden the legal meaning of charity.

Progress so far: The Indigenous People’s Working Group, part of the ACCS, suggested the CRA update its guidance documents to make it clear that work on reconciliation can fall under the fourth ‘head of charity’ (“other purposes that benefit the community”). However, this interpretation of charity is already possible in Canada, and the three public reports of the ACCS do not offer a definitive answer. 

That the Government of Canada direct the Canada Revenue Agency to update policy statement CPS-019 (What is a related business) to provide greater clarity on permissible revenue generation activities for registered charities, particularly with regard to revenue generating opportunities arising from new technologies.

Progress so far: The ACCS advised the CRA to update its policy statement to “be more enabling” and make it public as soon as possible, according to the Advisory Committee’s latest report from July 2021. It has not yet been updated. 

That the Government of Canada, through the Canada Revenue Agency, study the extent to which the donation of non-environmental real estate could be incentivized without undermining the Ecological Gifts Program.

Progress so far: The Canadian government said it would ask the ACCS to review this recommendation, but no mention of it is to be found in any of the Committee’s three public reports. 

That the Government of Canada direct the Advisory Committee on the Charitable Sector to examine the advantages and disadvantages of amending the disbursement quota for registered charities; and the advantages and disadvantages of setting the disbursement quota in regulation, rather than statute.

Progress so far: The ACCS examined the disbursement quota question. In Sept. 2021, it concluded in a submission to Finance Canada that the disbursement quota should not be raised beyond 3.5 per cent. Nonetheless, starting in January 2022, Canada’s disbursement quota was raised to 5 percent. 

That the Government of Canada instruct the Advisory Committee on the Charitable Sector to consider means of ensuring that donations do not languish in donor-advised funds, but are instead used to fund charitable activities in a timely fashion.

Progress so far: The Canadian government promised to ask the ACCS about this recommendation. Based on all three public ACCS reports, the Committee does not appear to have seriously considered the proposal. 

That the Government of Canada direct the Canada Revenue Agency to revise its interpretation of the “not-for-profit purpose rule” to provide greater clarity and certainty for non-profit organizations (NPOs) regarding the extent to which it is permissible for them to hold surplus income; and to reflect the language of the Income Tax Act, which focuses on the purposes of the organization.

Progress so far: The Canadian government said the CRA would review its interpretation of the rules around surplus income to see whether it is consistent with the Income Tax Act. It is unclear whether that has happened, or if changes have been made. 

That the Government of Canada direct the Canada Revenue Agency to assess the merits of amending section 241 of the Income Tax Act to allow the Canada Revenue Agency to publicly disclose the information contained on the T1044 Non-Profit Organization Information Return.

Progress so far: The ACCS has reviewed the question of allowing the CRA to publicly disclose information on the T1044. The Committee’s public report from April 2021 says doing so would require changes to the Income Tax Act. 

That the Government of Canada direct the Advisory Committee on the Charitable Sector to review the treatment and regulation of non-profit organizations, including whether the Income Tax Act should distinguish between public benefit and member benefit non-profit organizations.

Progress so far: The Canadian government vowed to ask the ACCS to review it. As of yet, no mention of this issue has been made in any of the Committee’s three public reports. 

That the Government of Canada direct the Advisory Committee on the Charitable Sector to review the treatment and regulation of non-profit organizations, including whether the Income Tax Act should distinguish between public benefit and member benefit non-profit organizations.

Progress so far: The Canadian government vowed to ask the ACCS to review it. As of yet, no mention of this issue has been made in any of the Committee’s three public reports. 

Big changes on the horizon

Many of the Committee’s recommendations will not be accomplished before the next federal election. They’re simply too big. “I do think that it’s going to take, certainly, more than one term to get most of these through,” says Bruce MacDonald, CEO of Imagine Canada, a lobby group for the charitable sector. 

First of all, some of the Committee’s recommendations fiddle with the Income Tax Act, which governs the financial benefits afforded to charities. The Income Tax Act runs to about 3,000 pages in both official languages, with constant tweaks due to new pieces of legislation or court cases. In other words, changing anything in the ITA is neither easy nor particularly straightforward. 

Paloma Raggo, an assistant professor of philanthropy and non-profit leadership at Carleton University, says there is also a multi-level governance issue with many of the toughest problems facing the social impact sector. The federal government is responsible for the tax code, but many of the regulatory issues the sector faces must be addressed by provincial and territorial governments, too. “We call these ‘wicked’ policy issues,” Raggo says. “They are super complex…and across levels of government.” 

That isn’t to say addressing the following recommendations is impossible. Rather, they may require extensive coordination with provinces and territories that may drag on past the current federal term. Any provincial or territorial elections may also disrupt any consultations, as governments generally enter a ‘caretaker’ mode where very little proactive work is done. 

That the Government of Canada, through the Treasury Board of Canada Secretariat and the agencies and departments funding charitable and non-profit organizations, include in contribution agreements costs associated with the recruitment and retention of volunteers needed to deliver funded events and/or services.

Progress so far: The Canadian government is on board with covering “unique” eligible activities and expenditures related to recruitment and retention of volunteers. However, it isn’t clear if this has actually happened, nor did the government’s March 2021 letter specify what exactly those “unique” activities include. 

That the Government of Canada, through the Public Safety Minister, work with provincial and territorial counterparts and the Canadian Association of Chiefs of Police to seek ways to alleviate a financial burden on low-budget organizations for needed police checks on volunteers.

Progress so far: As it turns out, the RCMP doesn’t charge volunteers for police checks if they can prove they are seeking one to contribute to a charitable organization. In its March 2021 response, the federal government acknowledges that police forces in other parts of the country may have different policies. It is currently working with the Canadian Association of Chiefs of Police on this issue.

That the Government of Canada, through the Minister of Finance and federal-provincial-territorial meetings of Ministers of Finance, support the development of pensions for the charitable and non-profit sectors that are portable across provincial and territorial jurisdictions.

Progress so far: On top of the Canadian Pension Plan and Quebec Pension Plan, and Old Age Security, the federal government started Pooled Registered Pension Plans (PRPPs) in 2012 to cover workers without access to a workplace pension plan. PRPPs were developed in consultation with provinces and territories. “These vehicles and supports are available to service the retirement needs of workers in the charitable and non-profit sectors,” the federal government’s March 2021 letter reads.

That the Government of Canada, through the Treasury Board of Canada Secretariat, develop policies that require departments and agencies to compensate full administrative costs associated with delivering the services being funded in transfers to charitable and non-profit organizations.

Progress so far: The Canadian government agrees with this recommendation and said the Treasury Board of Canada Secretariat will begin providing guidance on how to pay charities and non-profits for administrative costs related to delivering services. 

That the Government of Canada, through Treasury Board of Canada, ensure that grants and contribution agreements cover a minimum of two years, renewable as appropriate; and that the level of information required for both application and reporting on these agreements be commensurate with the level of funding, minimizing complexity for smaller amounts.

Progress so far: The Canadian government says it already has “flexibilities” within its Policy on Transfer Payments to ensure reporting requirements for charities are proportionate to, among other things, “the value of funding in relation to administrative costs.” According to the Policy on Transfer Payments website, it was last updated in April 2022. Unfortunately, there is no mention of two-year minimum grant and contribution payments. 

That the Government of Canada develop and implement a standardized set of reporting categories and an on-line tool for charitable and non-profit organizations to submit financial reports based on these categories. The Treasury Board of Canada should be tasked with working with federal departments and agencies and federal/provincial/territorial working groups.

Progress so far: Given the vast array of reporting requirements for each activity the Canadian government funds, the March 2021 letter says, it wouldn’t be able to design such a tool until a centralized organization like a Charitable and Nonprofit Secretariat was created. Only then would it consider exploring the idea. 

That the Government of Canada, through the Minister of Innovation, Science and Economic Development, create a secretariat on the charitable and non-profit sector to:

  • establish and convene regular meetings of an interdepartmental working group, with representation from Finance Canada, the Treasury Board of Canada Secretariat, the Canada Revenue Agency, Employment and Social Development Canada and other departments with direct connections to these organizations;
  • convene meetings of appropriate groups of federal/provincial and territorial ministers with responsibility for various aspects of regulating and relating to the charitable and non-profit sectors; and
  • publish an annual report on the state of the charitable and non-profit sector. This report should include changes related to the sector by federal, provincial and territorial governments along with a more general overview of the economic and social health of the sector.

Progress so far: The Canadian government believes that ESDC is best suited to lead a ‘single window’ into government for the charitable and non-profit sector, according to its March 2021 letter. It suggests ESDC could leverage its current work on the Social Innovation and Social Finance Strategy to better inform the sector of what a Secretariat could and couldn’t do. The Strategy has recommended the federal government establish an Office of Social Innovation within its bureaucracy to, among other things, act as a ‘single window’ for social purpose organizations. 

That the Government of Canada propose amendments to the Income Tax Act to provide that all appeals from decisions of the Charities Directorate of the Canada Revenue Agency proceed to the Tax Court of Canada for a hearing de novo, following consideration by the Canada Revenue Agency’s Tax and Charities Appeals Directorate; and a right to appeal to the Tax Court of Canada for cases where the Canada Revenue Agency’s Tax and Charities Appeals Directorate (the Directorate) has not rendered a decision on an appeal by an organization that has had its application for registered charity status refused, or an existing charity that has had its registration revoked, within six months of it having been referred to the Directorate.

Progress so far: The Canadian government defended the current appeals process for charities stripped of their status, but said it would review its framework in light of the Committee’s recommendation. 

That the Government of Canada replace the current categories of registered charity with two new categories: public charity and private charity.

Progress so far: The Canadian government admitted that the differences between public foundations and charitable organizations are quite similar now, and vowed to review the rules. No major changes have been announced.  

That the Government of Canada direct the Canada Revenue Agency to develop, implement and evaluate a pilot project to allow registered charities to make gifts to non-qualified donees in certain limited circumstances, namely where the gifted funds are subject to careful monitoring and used for exclusively charitable purposes, in order to facilitate cooperation between registered charities and non-charities.

Progress so far: The House of Commons finance committee recently approved two amendments to the Budget Implementation Act that would loosen restrictions around providing charitable funding to non-qualified donees. That said, the sector’s concerns around ‘direction and control’, or requiring charities to provide rigorous oversight of all funds used by a non-charity, are not dead. 

That the Government of Canada consider which activities registered charities should not be allowed to carry out and proscribe them through precisely defined statutory prohibitions.

Progress so far: Unclear. Setting out regulations on prohibited activities isn’t a federal responsibility, according to the Canadian government’s March 2021 letter. It is up to provinces and territories to decide, and it isn’t clear to Future of Good how many have made alterations to their statutory prohibitions since the Special Senate Committee released its report.

That the Government of Canada review the “ineligible individual” provisions set out in section 149.1(1) of the Income Tax Act as part of a comprehensive review of the Income Tax Act provisions governing registered charities, other qualified donees and non-profit organizations.

Progress so far: A bit. The Canadian government defended these rules, describing them as a way to “prevent individuals who have a history of financial dishonesty or or that have abused the rules regarding charitable registration in the past from controlling or directing registered charities.” Nonetheless, in its March 2021 letter, it promised to review these provisions (although no major alterations appear to have been announced).

Ambiguous proposals

A few of the 42 recommendations are somewhat ambiguous. Raggo suspects this means the Committee wasn’t able to get a clear compromise on the wording of these recommendations. Take Recommendation 14, which calls on ESDC to support ‘innovation’. “By leaving it so broad, they kind of punt the issue a bit later,” Raggo says of those who drafted the recommendation. “So, some people will fight over what it actually means to implement it. That’s really problematic.” 

The lack of a concrete implementation plan to ensure the Committee’s 42 recommendations would be implemented in manageable, measurable steps is something sector leaders criticized. For the recommendations listed below, that is doubly the case. Without clear wording or precise goals, some of these recommendations are easily ignored or forgotten by the government. 

That the Government of Canada, through Employment and Social Development Canada, support innovation across charitable and non-profit organizations, including through the advisory group managing the Social Finance Fund.

Progress so far: ESDC already claims to support innovation in the charitable sector, through the Social Finance Fund, but the Fund hasn’t been launched yet. 

That the Government of Canada direct the Canada Revenue Agency (CRA) to take the following steps to improve its relationship with charitable and non-profit organizations:

  • communicate more clearly CRA’s decisions with respect to rejections of applications, revocation of registered charitable status, and results of internal appeals;
  • reduce wait times for responses on applications for status and other requests for information; and
  • increase collaboration with provincial and territorial counterparts with a view to reduce the reporting burden on charitable and non-profit organizations.

Progress so far: According to the Canadian government’s March 2021 response, the CRA already issues its decisions in plain language, rather than legalese, when denying charitable status applications. In June 2019, the CRA also launched a suite of digital services to help charitable leaders submit applications with all of the necessary paperwork. 

That the Government of Canada, through the Minister of National Revenue and the Commissioner of CRA, direct the Advisory Committee on the Charitable Sector to include a wide range of organizations on its working groups. This should include, but not be limited to, smaller organizations, organizations in rural and remote communities, organizations representing and serving newcomers to Canada and organizations supporting and serving Indigenous communities.

Progress so far: The last round of appointments to the ACCS did not include a significant change to the diversity of its membership, or the sub sectors said members work in. 

That, recognizing the importance of enabling the development of the common law definition of charity, the Government of Canada consider measures to assist organizations that have had their application for registered charity status refused, or existing charities that have had their registration revoked, in appealing decisions from the Canada Revenue Agency’s Charities Directorate.

Progress so far: The Canadian government promised in its March 2021 letter to review the framework for appeals to charitable status revocations. However, there isn’t any evidence to suggest any major changes to this framework are forthcoming. 

That the Government of Canada, through the Advisory Committee on the Charitable Sector, review the policy considerations relating to qualified donee and tax preferred status. This review should be conducted with a view to establishing a principle-based framework for new categories of qualified donee and other tax preferred entities.

Progress so far: The ACCS has asked the CRA’s Charities Directorate to review the potential benefits of qualified donee status for Indigenous-led organizations. One of the ACCS’ working groups looks at issues faced by non-qualified donees.

That the Government of Canada direct the Canada Revenue Agency to revise Guidance CG-002 “Canadian registered charities carrying out activities outside Canada.” The revised guidance should demonstrate a shift in focus from “direction and control” to careful monitoring through the implementation of an “expenditure responsibility test.”

Progress so far: The CRA did revise Guidance CG-002 in November 2020, according to the agency’s website. However, it does not appear to shift away from “direction and control” as the recommendation asked for. 

That the Government of Canada review the Income Tax Act provisions governing registered charities every five years, beginning no later than next fiscal year.

Progress so far: It is impossible to tell whether the Canadian government has fulfilled this review, based on publicly available information around the recommendations. 

Refusing to budge

Meanwhile, the Canadian government declined to pursue some of the recommendations given by the Special Senate Committee. A letter from then-Minister of National Revenue Diane Lebouthillier in March 2021 to Senator Terry Mercer, who chaired the Special Senate Committee, shows exactly where the federal government shied away. 

The federal government flat-out refused to implement some recommendations, while insisting others could be accomplished through pre-existing government bodies or sector organizations. In a handful of cases, the government said the Committee was asking it to do things that either could not legally be done, or that would require additional parliamentary authority. 

That the Government of Canada, through its departments and agencies, develop and implement a national volunteer strategy to encourage volunteerism by all Canadians in their communities, recognizing that the needs of northern, rural and urban communities are unique.

Progress so far: The Canadian government said in its response to the Special Senate Committee’s recommendations that sector organizations like Volunteer Canada are responsible for “strategic national leadership and expertise on volunteerism”. (In its defense, the federal government pointed to four national projects funded by Employment and Social Development Canada that encourage volunteerism across the country.) 

That the Government of Canada, through Labour Canada, work with the charitable and non-profit sector to develop and implement a human resources renewal plan to ensure the long-term sustainability of the sector workforce, recognizing that the needs of northern, rural and urban communities are unique.

Progress so far: The Canadian government believes its Social Innovation and Social Finance Strategy will “ensure the long-term sustainability of the sector and its workforce”, according to its March 2021 letter. While the Strategy’s Co-Creation Steering Group made reference to the HR challenges faced by social enterprises, the Canadian government’s October 2021 response to its recommendations does not include any mention of an HR renewal plan.

That the Government of Canada, in consultation with the charitable and non-profit sector, reinstate the Human Resources Council for the Voluntary Sector, or a similar body by which the sector can collaborate with government to fulfill aspects of the human resources renewal plan.

Progress so far: The Canadian government says the Social Innovation Advisory Council (SIAC), a 15-member body focused on growing social purpose organizations across Canada, could take on additional responsibilities like the sector’s HR renewal plan.  

That Government of Canada initiatives that support the sustainability of for-profit sectors, particularly with respect to overhead and infrastructure costs, be extended to the charitable and non-profit sector.

Progress so far: In fact, the Canadian government says non-profits are already eligible for most of Innovation Canada’s benefits and services. Its letter says some programs may be out-of-reach for non-profits because they are intended for businesses with long-term ambitions that can deliver a return to investors. 

That the Government of Canada direct the Canada Revenue Agency to develop and implement a pilot project to assess the viability of granting registered charities greater latitude in undertaking revenue-generating activities (provided the proceeds are used to further charitable purposes) through the implementation of a “destination of funds” test.

Progress so far: The Canadian government refuses to accept this recommendation. In its letter from March 2021, it says the Income Tax Act already allows charities to carry on a wide variety of revenue-generating activities, including businesses, so long as they fit within its charitable purpose. The letter goes on to say that charities looking to operate an unrelated business are allowed to establish a separate taxable corporation to do so while paying relatively low taxes. 

That the Government of Canada, through the Canada Revenue Agency, develop, implement and evaluate a pilot project on the impact on the charitable sector of exempting donations of private shares from capital gains tax.

Progress so far: The Canadian government said in its March 2021 letter that the CRA wouldn’t be able to implement this recommendation on its own. It would need “further parliamentary approval” to do so. A bill to exempt donees of private shares from capital gains tax died in the House of Commons during its second reading. 

Spearheading the Senate’s recommendations

The next three years will be critical for Canada’s social impact sector if it wants to see movement on the 42 recommendations. With the Liberals and NDP in a confidence-and-supply agreement until 2025, the federal government is unlikely to see a change in government for the foreseeable future. Meanwhile, the COVID-19 pandemic’s denouement is bringing government officials out of survival mode. 

Within the next three years, Canada’s social impact sector will need to get its act together and organize. As Hasmath pointed out, there isn’t any centralized mechanism to ensure the 42 recommendations are actually carried out. It’ll depend on sector leaders, advocates, and interested politicians working together to determine which of the recommendations are most critical, and then acting on them. 

“As the sector looks at various recommendations from that report,” says MacDonald, “and actually works shoulder-to-shoulder and creates enough weight to be heard, there is the opportunity to make progress. But if it is one organization on their own, it’ll be more difficult to advance these recommendations.” 

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