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CRA's new Charities Education Program should be a step forward: Kulish

The Canada Revenue Agency's (CRA) new Charities Education Program (CEP) should be a step forward, says Toronto charities lawyer Taras Kulish.

The CEP is a reaction to the much-criticized CRA audit programs which were initiated during former prime minister Stephen Harper's government and which opponents claimed was unfairly targeting charities for their political opposition to the Conservatives, says Kulish, a senior associate with Steinberg, Title, Hope and Israel LLP.

“Prime Minister Justin Trudeau's government ended that program last spring,” he says. “But there is still a need to work with charities since many of them don’t realize they may be in contravention of the rules and regulations.”

He says the CRA’s collaborative approach seeks to informally spot check charities and look over their books and policies to see if they are compliant. If issues are found, the plan is to work with the charity to educate them as to what they should be doing.

“Of course, if they find something seriously wrong, they still have the option of an audit,” he says. “However, audits are expensive and time-consuming, so rather than just go straight to an audit, these spot checks will allow the CRA to work with more charities than they could reach through audits and hopefully get better compliance across the board with less stress and disruption.”

Kulish says among the items to be checked will be whether the charity has proper HR policies in place, if there’s a sexual harassment policy, if their privacy policy is compliant with the law and being followed, how they handle petty cash and issue official tax receipts. 

“If there are some gaps then the CRA will suggest best practices,” he says. “I think potentially they will reach hundreds of more charities than the old audit program and really get more bang for their buck. Charities should start to systematically review their bylaws and policies to ensure they are compliant before they receive a visit from the Charities Directorate.”

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