New CRA Guidance on Arts Activities and Charitable Registration

Staff Post
By Jerry Smith

A recent post by Andrew Valentine with the Miller Thomson Law Firm shone some light on a new piece of guidance from the Canada Revenue Agency. If you are currently considering an application for – or already possess – charitable status, the CRA has recently delivered the final version of the Guidance for Arts Activities and Charitable Registration (Reference CG – 018, December 14, 2012).

Building on feedback from the sector, including organizations such as CAPACOA seeking a broader definition of who could qualify, this finalized version attempts to clarify what CRA finds as acceptable examples of appropriate purposes to merit charitable status.

First, there are three broad categories of arts-related activities that could qualify as charitable purposes under one or more of the four heads of charity, including:

• Advancement of education;
• Exhibitions, performances and presentations of artistic works;
• Activities that enhance an art form or style within the arts for the benefit of the public.

In particular, CRA has clarified and expanded details in its arts forms and styles appendix, thus opening the door for more presenter members of CAPACOA to garner or maintain standing as a charity.

If you are interested in exploring these ideas in more detail, these links will be of value:

• Arts Activities and Charitable Registration – CRA Guidance
• CAPACOA Provides Input on Charitable Registration for Presenters

CADAC is looking out for you

Staff Post 
by Jerry Smith

A new riff on an old thought:  Big Brother is, how shall I put it, . . . looking out for you, especially when it is in the shape of CADAC, a web based application dedicated to the collection, dissemination and analysis of financial and statistical information about Canadian arts organizations, and in essence a centre of expertise to help monitor the health of the arts sector across Canada.

Young Associates recently hosted representatives from CADAC in order to stay ahead of the curve and assist clients in taking the stress and confusion out of filing their financial and statistical data with CADAC.

Launched in December 2008, CADAC’s objectives include attempt to lighten the burden for arts organizations, improve the accountability and transparency of Canadian arts organizations, as well as developing a significantly enhanced database for research, planning and policy development. Young Associates’ work with clients during the initial ‘CADAC years’ has made us aware of the challenges around changing an organization’s financial data practices to meet CADAC requirements. But as we have all gotten more accustomed to the new CADAC environment, it has become apparent that storing financial data with CADAC has some great information benefits, including comparative analysis with other organizations in the sector.  Our session with CADAC revealed that pulling meaningful comparative reports from the system is becoming much easier.

As part of our ongoing leadership in developing resources to assist clients, Young Associates was particularly pleased to explore the key elements of CADAC’s reconciliation process and how it could apply to clients.  While no-one wants to be categorized as non-compliant and have their CADAC account red flagged to a funder, it most often simply means there is some data missing, and the staff at CADAC would like to assist you in getting back up to speed.

When in doubt, ask; here it is better to ask for permission than forgiveness!

Questions About GST/HST? Consider Getting a CRA Ruling.

Staff Post
By Jerry Smith

Have you ever cursed sales tax calculations, or even worried whether a calculation mattered? Have you ever played sales tax roulette – called the help desk at CRA multiple times with the same question until you got an answer you liked?

First, whatever anyone tells you over the phone is – just an opinion! This was confirmed recently when Young Associates hosted two guests from the Canada Revenue Agency GST/HST Rulings Directorate.

If you want a definitive answer, you need a ruling – an official answer that is binding on the CRA, and that responds to the specifics of your situation.

To get a ruling, submit your query in writing. Follow up to determine when it is assigned to an officer. Follow through with the officer; anything they say on the phone as guidance is solid . . . but wait until you get it in writing. Then it is a ruling.

P.S. While the CRA search engine is thorough and massively detailed, don’t be afraid to try user-friendly Google searches, or speak to any officer at the Rulings Hotline, 1-800-959-8287.