ARCHIVED – Enhancing the Regulatory Regime for Registered Canadian Amateur Athletic Associations

Archived

This page has been archived on the Web.

1. What are the new requirements for registered Canadian amateur athletic associations (RCAAAs)?
2. What is the new definition of an RCAAA?
3. What does the change from "primary" to "exclusive" mean for RCAAAs?
4. How can an RCAAA ensure it continues to qualify under the new rules?
5. If changes are required, by when must they be made?
6. What if an RCAAA cannot meet the new requirements?
7. Will there be changes to the information return that RCAAAs are currently required to file?
8. Are there any other rule changes that will affect RCAAAs?
9. What if an association disagrees with a CRA decision?
10. When do these new rules apply?
11. Where will I find more information on the proposed measures?

1. What are the new requirements for registered Canadian amateur athletic associations (RCAAAs)?

Budget 2011 proposes to extend to RCAAAs many of the same requirements that pertain to registered charities. Additionally, the new eligibility rules for individuals who are directors or who control or manage registered charities will also apply to RCAAAs. Further, to increase transparency the CRA will be able to provide the public with additional information about RCAAAs. This will include copies of governing documents, names of directors, and notifications of registration or revocation. Finally, Budget 2011 is also proposing changes to the definition of an RCAAA.

2. What is the new definition of an RCAAA?

Previously an RCAAA had to be established for the "primary" purpose and "primary" function of promoting amateur athletics in Canada on a nation-wide basis. Under the new rules, RCAAAs must be established for the "exclusive" purpose and "exclusive" function of promoting amateur athletics in Canada on a nation-wide basis.

Note, however, that the Department of Finance has also indicated that it intends to consult on the proposed change to the definition. Comments can be submitted to the Department of Finance until August 31, 2011.

3. What does the change from "primary" to "exclusive" mean for RCAAAs?

Under the former definition, provided that an RCAAA could establish that its primary purpose was the promotion of amateur athletics in Canada on a nation-wide basis, it could also have an unrelated purpose or function. An RCAAA's purpose and function will now be restricted to promoting amateur athletics in Canada on a nation-wide basis, subject to the exceptions permitted under the Income Tax Act.

4. How can an RCAAA ensure it continues to qualify under the new rules?

The CRA recommends that RCAAAs review their purposes and activities to determine if they are functioning exclusively to promote amateur athletics in Canada on a nation-wide basis. If an RCAAA determines that it has unrelated purposes, appropriate amendments would be required in order to come into compliance with the revised definition.

5. If changes are required, by when must they be made?

The Budget proposes that the rules will apply on the later of January 1, 2012, or the date that the legislation receives Royal Assent. The CRA will also allow additional time for changes to an RCAAA's formal purposes, provided that the RCAAA is able to demonstrate that it is taking reasonable steps to become compliant.

6. What if an RCAAA cannot meet the new requirements?

The RCAAA can ask CRA for voluntary revocation. The RCAAA will be able to retain its assets and might continue to qualify for tax exemption as a non-profit organization. However, it will no longer be able to issue receipts for income tax purposes or receive funds from registered charities. The determination as to whether an organization qualifies for tax exemption as a non-profit organization is made by the CRA's Tax Services Offices. Go to Non-profit organizations for more information on these organizations.

7. Will there be changes to the information return that RCAAAs are currently required to file?

Not at this time. RCAAAs should continue to file the existing information return (Form T2052).

8. Are there any other rule changes that will affect RCAAAs?

Yes. There are new provisions regarding sanctions and restrictions on directors. Currently, if an RCAAA fails to comply with the rules, the only tool the CRA has is to revoke its registered status. For failing to comply with certain of the new rules, intermediate penalties and suspensions will be introduced. There are also new rules regarding restrictions on who is eligible to be a director, trustee, officer or like official of an RCAAA. Please refer to the questions and answers on Safeguarding Charitable Assets through Good Governance for more information on these new requirements.

9. What if an association disagrees with a CRA decision?

RCAAAs and applicants for such status will continue to have the opportunity to address any concerns before the CRA makes a final decision. The CRA's administrative practice is to provide written reasons for any proposed sanction or decision and the association is then provided with an opportunity to respond.

10. When do these new rules apply?

The rules will apply on or after the later of January 1, 2012, and Royal Assent of the implementing legislation. During the interim period, associations will continue to be eligible for registration based on the current rules.

11. Where will I find more information on the proposed measures?

As further information is developed, it will be added to the Charities and Giving Web pages.

Date modified:

2015-07-15