On March 20, 2020, the Canada Revenue Agency (CRA) announced that its Charities Directorate had been closed down with all operations suspended until further notice in response to the COVID-19 pandemic. This news follows an earlier announcement on March 18, 2020, where the Canadian government announced certain economic measures to help stabilize the Canadian economy.
What do these announcements mean to Canadian charities?
The CRA's Charities Directorate call centre is now closed so it may be impossible to get responses from CRA on issues a Canadian charity may be facing during this challenging period. All applications that were sent to CRA for registration of a new charity will be delayed until further notice.
All ongoing audit activities of the Charities Directorate are suspended. This means that any ongoing dialogue with the CRA regarding any issues raised by the Charities Directorate including questions about a charity's status have been put on hold for the time being.
The CRA has extended the filing deadline to December 31, 2020, for all charities required to file a Form T3010, Registered Charity Information Return between March 18, 2020 and December 31, 2020.
Other Tax Proposals
The broader relief measures announced on March 18 contain a proposal to provide "eligible small employers", including not-for-profit organizations and charities, a wage subsidy for a period of three months. The proposed subsidy is to be equal to 10% of remuneration paid between March 18, 2020, and June 20, 2020, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. To receive this subsidy a not-for-profit or charity can start reducing remittances of federal, provincial (other than Quebec), or territorial income tax in the first remittance period that includes employee remuneration paid. This reduction does not apply to Employment Insurance or Canada Pension Plan remittances.
The legislation enacting these proposals were approved by Parliament and received Royal Assent on March 25, 2020.
Today, the Prime Minister announced that the amount of the subsidy would be increased from 10% to 75% and would be effective from March 15.