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AFP Requests Meeting with Minister of Finance over Quota Changes

(March 28, 2005) On Feb. 15, 2005, the Finance Committee of the House of Commons reported Bill C-33, A second Act to implement certain provisions of the budget tabled in Parliament on March 23, 2004, back to the House without holding hearings. It had been hoped that the Finance Committee would provide a venue for the charitable sector to express its concerns about certain aspects of the Bill, particularly the new disbursement quota calculations. However, the Committee decided to report the Bill without hearing from the sector. In response, AFP joined other members of the sector in a letter to Minister of Finance Ralph Goodale requesting a meeting with the Minister to discuss the sector's concerns with the disbursement quota changes.

Bill C-33 proposes the most significant changes to the laws relating to charities in over 20 years. The most significant concern regarding Bill C-33 is that it introduces significant changes to the calculation of the disbursement quota for registered charities. These changes, affecting more than 80,000 charities in Canada, will greatly increase their reporting and compliance burden, and may well create new barriers to their operation and funding. The algebraic formula for calculating the disbursement quota found in Clause 20 of the draft legislation is - A + A.1 + A.2 + B + {C x 0.035 [D - (E + F)]}/365. The complexity of this new formula speaks for itself. Many charities will find this impossible to apply without professional help. A significant number of charities rely on volunteers and have minimal resources to comply with such complex regulation.

Many changes made to the calculation had not been discussed with the charitable sector prior to the legislation being introduced in the House. This failure represents a significant lost opportunity to tap into the expertise of the sector and could mean that the legislation will have more unintended consequences than otherwise would have been the case.

It is hoped that the letter will open a dialogue between the Ministry of Finance and the charitable sector regarding this important issue.

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