The Minister of National Revenue has suspended the activities of the Charities Advisory Committee, along with all other advisory committees to Canada Revenue Agency, pending a review of each body’s role and mandate.

This unexpected suspension is an unfortunate decision that should be reconsidered. The CAC has provided valuable advice, assistance, and feedback to the Charities Directorate of CRA on matters related to the regulation of charities since it was established in March 2004.

The CAC was created as a result of a recommendation made by the Joint Regulatory Table, a group of voluntary sector and federal government officials, after a three-year review of the regulation of charities. The Joint Regulatory Table recommended that a “charities advisory group with membership from the voluntary sector and government departments” be established to “advise the government on improving the regulator’s policy framework.”

The advisory group would “play a key role in encouraging the free exchange of ideas and promoting open and constructive contact between the regulator and the regulated. Its guidance would help senior regulatory officials become sensitive to developments in the sector and make sure that all key internal and external groups are involved in policy development.”

The recommendation was adopted by the federal government in its 2004 budget, where it promised a “more transparent relationship with the charitable sector”. The CAC’s mandate, as stated in the budget, was to provide registered charities with a stronger voice in shaping the administration of tax rules, and to advise the Minister of National Revenue on those administrative issues.

The creation of the CAC was described as the “first milestone” of the federal government’s commitment of $24 million for the improvement of the regulation of charities. Then Minister of National Revenue, Stan Keyes, affirmed in March 2004 that the CAC “will provide us with an opportunity to engage key members of the sector, as we implement better regulations for charities [and] will be the sounding board for implementing these significant changes to charities’ regulation. With the funding committed in the budget, we will be putting better information out into the public domain, giving Canadians access to better information so they can make more informed decisions about their donations.”

Since that time, the CAC has been actively engaged in fulfilling its mandate. Its activities have included advising the Charities Directorate on administrative policy agenda, identifying and discussing emerging issues and trends in the charitable sector, communicating sector concerns to the Charities Directorate, dialoguing on compliance concerns, and providing a forum for the exchange of information that impacts on CRA programs and policies. Specifically, the CAC has discussed and made recommendations to the CRA in the following areas:

• reorganization of the Charities Directorate
• regulatory reform
• CRA’s audit process
• draft CRA publications and policies
• legislative proposals (including Bill C-33, discussed with the Department of Finance)
• public education and information for charities
• receipting process and practices

The CAC has also regularly received presentations from various divisions of the Charities Directorate on emerging issues affecting the charitable sector. The CAC has consulted with the division officials concerning those issues, expressing its concerns and making recommendations.

The work of the Charities Directorate has been aided a great deal by its ability to consult regularly with a committee that provides both professional and stakeholder input. The CAC has helped facilitate more effective regulatory compliance in the charitable sector through its promotion of public education, transparent reporting and decision-making, and flexible and fair sanctions.

Given the constructive role the CAC has played in improving the relationship between the Charities Directorate and the charitable sector, it is hoped that the Minister of National Revenue will soon reconsider the decision to suspend the activities of the CAC and allow it to continue its effective work.

For further information: Terrance Carter is Senior Partner in Carter & Associates and a member of the Charities Advisory Committee, 519/942-0001, tcarter@carters.ca; for more detailed discussion of the committee’s specific activities: www.cra-arc.gc.ca/tax/charities/cac/meetings-e.html.