Effective and Accountable Charities Act

Senator Omidvar is the sponsor of Bill S- 216, the Effective and Accountable Charities Act. The bill will amend the Income Tax Act to enable charities to establish equal partnerships with non-charities, especially empowering the voices of BIPOC organizations, while still ensuring accountability and transparency.  

Currently, the Income Tax Act limits charities to spending their charitable dollars on their “own activities”. However, there are times when the best way for a charity to pursue its charitable purpose is to partner with non-charities, such as not-for-profits, social enterprises, co-ops, or civil society groups. The Canada Revenue Agency, which issues guidelines based on the Income Tax Act, has stipulated that when charities do work with non-charities, they must exercise “direction and control” over that work.

The Effective and Accountable Charities Act will replace the current Income Tax Act language of “own activities” with new language of “resource accountability.” This approach shifts a charity’s focus from ongoing operational control of activities to an approach focused on taking reasonable steps to ensure that charitable resources are devoted to achieving charitable outcomes.

Cooperation and collaboration between charities and non-charities is increasingly necessary to create lasting impact – now is the time to update the laws regulating the charitable sector with Bill S-216!

Bill S-216 – Download
Briefing Note – Direction and Control – Download

Please note Bill S-216 was formerly Bill S-222 in the previous parliamentary session.