A Closer Look at Budget 2011’s Effects on RCAAAs
Registered Canadian amateur athletic associations (RCAAA) will soon be treated the same as regular charities in a few key areas according to the proposals in Budget 2011. These new rules, yet to be announced, may apply to existing RCAAAs as early as January 1, 2012. That is only a few seasons away for some of Canada’s most active and largest organizations.
If a charity issues receipts to donors in an improper manner that charity can be penalized. The new measures propose to extend these penalties to RCAAAs who do the same. The government must realize that improper donation schemes do not discriminate between different classes of organizations. A RCAAA will even be subject to a penalty if they fail to file an annual information return, something charities are too often painfully familiar with. Perhaps more burdensome, the proposals will also narrow the scope of activities of an RCAA to ensure that they are “required to have the promotion of amateur athletics in Canada on a nation-wide basis as their exclusive purpose and exclusive function rather than their primary purpose and primary function.” This will no doubt create a flurry of mission and vision navel gazing activity in some corners.
It is no surprise that it is proposed that RCAAAs be subject to the same undue benefit rules as other charities and that they be made to disclose similar information to the public. No special treatment or closed door activity is justified for these kinds of organizations when others have to reveal all. Breach of these yet to be revealed rules will attract penalties such as monetary fines, suspension or revocation, just like charities have been subject to.
Before the new rules are introduced for RCAAAs on the “exclusivity of purpose and function “test, feedback will be sought from the sector affected. Since all of this will be quite a change in administration practices for Registered Canadian amateur athletic associations, they will also be consulted while the CRA is developing the administrative game plan. This will no doubt be a huge amount of work for yet another group of overburdened organizations often primarily driven by well-intentioned volunteers.