2024 Fall Economic Statement – Key Highlights for Philanthropic Foundations

The Government of Canada released its 2024 Fall Economic Statement on December 16, 2024. Following the abrupt resignation from cabinet of Finance Minister and Deputy Prime Minister Chrystia Freeland earlier that day, it was tabled by House Leader Karina Gould.

The Fall Economic Statement (FES) is a regular annual update on the year’s fiscal plan, usually presented in November. It serves as an opportunity for the Finance Minister to share the government’s legislative and financial agenda, describe major economic developments since the last Budget, and announce new measures.

The weeks leading up to the presentation of the 2024 FES was met with challenges, including a long filibuster in the House of Commons which created delays, and threats of tariffs articulated by the incoming President-Elect of the United States, which has created economic and political volatility. Moreover, Chrystia Freeland’s unexpected resignation has increased speculation of a federal election on the near horizon, which could inhibit the legislation and roll-out of the government’s agenda as articulated in the 2024 FES.

PFC has reviewed the 2024 FES and consulted analyses and perspectives shared by several other sector experts, with a view to understand potential key implications for Canadian philanthropic foundations and grantmakers and to share them with the PFC network.

Previously announced measures confirmed in the 2024 FES

The government regularly publishes draft legislative and regulatory proposals to invite public comment in the development new tax (and similar) laws and regulations, or in modifying existing ones. This process helps to ensure they are responsive to the perspectives of stakeholders before they are enacted.

The 2024 FES states confirmation of the government’s intention to proceed with some previously proposed tax and related measures.

Included in the 2024 FES of particular note are rules related to trust reporting, the alternative minimum tax, and foreign charities.

Trust Reporting

Draft legislative and regulatory proposals introducing amendments to rules related to trust reporting were included in the 2024 FES as measures the government plans to proceed with. These proposed amendments are relevant to organizations holding property in trust, as they may be subject to additional disclosure requirements should these proposals pass into law.

Note that, in part due to advocacy conducted by PFC and others, the CRA has shared that it will not require registered charities to file the T3 Trust Income Tax and Information Return for internal trusts. Also, in October the CRA announced that bare trusts are exempt from filing T3 returns for the 2024 tax year unless directly requested, continuing the 2023 exemption, while other trusts remain subject to reporting requirements. Information from the CRA on trust reporting rules as they currently stand can be found here.

Trusts and trust reporting are a very complex area of the law that cannot be adequately summarized. It is recommended that questions be directed to your legal or tax professional.

Alternative Minimum Tax

The 2024 FES states that the government plans to enact various proposals announced in Budget 2024, including the proposal to allow taxpayers subject to the Alternative Minimum Tax (AMT) to claim 80% of the charitable donation tax credit when calculating the AMT, instead of the previously proposed limit of 50%.

Budget 2024 also proposed an exemption from the AMT for certain trusts. The 2024 FES confirms the government’s intent to proceed with these changes.

Foreign charities that are qualified donees

Another proposed change included in the 2024 FES is revisions to the Income Tax Act to implement new requirements for foreign charities that are qualified donees, with further amendments to extend the registered status period from 24 months to 36 months and require registered foreign charities to file an information return.

New proposed measures

Nonprofit (NPO) reporting

With the stated objective of increasing transparency in the sector, the 2024 FES proposed changes to the annual information return rules required by NPOs. There is very little data available about nonprofit organizations without charitable status, so this could potentially fill an important data gap.

The 2024 FES proposes to amend the Income Tax Act to require NPOs with total gross revenues over $50,000 to file the annual NPO information return, and to require NPOs that do not meet the thresholds for filing the annual NPO information return to file a new, short-form return that contains basic information about the organization. These measures are proposed to apply to 2026 and subsequent taxation years.

The government also commits extra funding to the CRA to support improvements to information reporting by nonprofit organizations.

Dialogues on money laundering and terrorist financing

The government announced in the 2024 FES its intent to launch interdepartmental dialogues with non-profit organizations to deepen awareness, enhance communication, and better combat money laundering, terrorist financing, and sanctions evasion risks.

The Government of Canada’s 2024 Fall Economic Statement can be found here: https://budget.canada.ca/update-miseajour/2024/home-accueil-en.html