Changes In The Charitable Sector: The New "Qualifying Disbursements" Regime

Bill C-19, Budget Implementation Act, 2022, No. 1 ("Bill C-19") received royal assent on June 23, 2022, introducing a new "qualifying disbursements" regime for Canadian registered charities.¹

BACKGROUND: THE "OWN ACTIVITIES" REQUIREMENT

Prior to Bill C-19 receiving royal assent, a Canadian registered charity was permitted to use its resources² in only one of two ways:

1. on its own charitable activities to further its charitable purposes; or
2. to make gifts to other qualified donees (i.e., organizations that are permitted to issue official Canadian donation receipts for gifts they receive, such as other Canadian registered charities).

This requirement for a registered charity to use its resources on its own charitable activities, and not on the activities of a non-qualified donee (regardless of whether the activities of the non-qualified donee are charitable), is known as the "own activities" requirement.