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Certain Organizations Need to Act Now to Ensure Qualified Donee Status 

Canadian Tax Adviser


August 06, 2013


Ashid Dharsi and Pam Prior
Vancouver, Enterprise Tax


Certain organizations that qualify as a "municipal or public body performing a function of government in Canada", must register with the CRA by December 31, 2013 to begin or continue to be recognized as a "qualified donee" with the ability to issue official donation receipts and receive gifts from registered charities after 2013. Such organizations may include, among others, certain provincial corporations, First Nations and Aboriginal self governments, school boards and public transit authorities.

In the 2011 federal budget, Finance proposed that a municipal or public body performing a function of government in Canada would be required to be on a publicly available list maintained by the CRA to be recognized as a qualified donee, effective January 1, 2012. However, while the CRA was developing the application process, its interim policy was to recognize entities that self-assessed as a "municipal or public body performing a function of government in Canada". The CRA has announced that, as of January 1, 2014, this interim policy will no longer be in effect and only entities that are registered will be recognized as qualified donees. The CRA has stated that it will grant retroactive qualified donee status to organizations that apply before January 1, 2014 and can show that they met the requirements as of January 1, 2012.


What is a "municipal or public body performing a function of government in Canada"?
Although "municipal body" and "public body" are not defined in the Act, in a recent technical interpretation (TI 2011-0428491I7), the CRA provided comments on the types of entities it would consider under these definitions.


In particular, the CRA stated that it considered a municipal body to typically be a body established or exercising a power under a municipal act or a similar provincial or territorial statute with respect to governing the affairs or purposes of a geographic area, and is accountable to those governed by it.


The CRA noted that a public body is typically a body that acquires both its existence and authority by statute, whose functions and transactions are for the benefit of, and affect the whole community of, persons to which its authority extends. A public body generally has a governance purpose and is accountable to those governed, regulated or represented by it, and would include an Indian band as defined by the Indian Act with procedures to elect Chief and council and other aboriginal governments with election procedures.


In addition to qualifying as a “municipal body” or “public body”, an organization must be performing an activity or group of activities undertaken to meet a governance role or purpose within a geographic area, which could include municipal services and key services traditionally provided by the province or territory, such as social services.


In the case of an Indian band or other Aboriginal government, performing a function of government in Canada may be demonstrated by:


  • Negotiating and implementing a treaty or self-government agreement with the federal, provincial or territorial government, and continued administration of that agreement
  • Passing by-laws under sections 81 and 83 of the Indian Act
  • Passing by-laws under section 81 of the Indian Act and subsection 5(1) of the First Nations Fiscal and Statistical Management Act.


Whether or not a particular organization qualifies as municipal or public body performing a function of government will depend on the scope of the services or activities by the entity.


Application process
To apply for registration, an organization must send a letter to the CRA stating that it is applying for registration as a qualified donee and explain how it meets the requirements of a municipal or public body performing a function of government in Canada, along with significant supporting documentation. We can help prepare registration applications, and identify and collect the required supporting documentation to ensure organizations don’t lose qualified donee status and their ability to issue official donation receipts and receive gifts from registered charities on January 1, 2014.


For more information, contact your KPMG adviser.






Information is current to August 06, 2013. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500


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