2024 Current Canadian income tax legislation on charities and donations, with historical annotations

https://earlycharitylawsources.com/wp-content/uploads/2025/02/ITA-Charity-Consol.pdf

This is an up-to-date edition with historical annotations of those parts of Canada’s Income Tax Act and Income Tax Regulations that are charity-related—meaning provisions that directly apply to: charities; other entities similar to charities; charitable donations; and similar donations or contributions that elicit a tax reduction.

Two questions will probably immediately arise in most readers’ minds:

Why include such an up-to-date edition here in what is supposed to be a historical website?
Aren’t there other products available that cover this?

This note further explains the why, but the basic point is, it doesn’t seem useful to show the pre-modern origins of charity law without also showing intermediate historical stages that led to today.

As to other products, yes, these are available. But as this note will show, they are either inadequate for showing this history, or expensive, or both.

Challenges of finding charities in tax codes

Taxation history is critical to charity law history. It is almost a definition of charities that they and their supporters enjoy and have always enjoyed some kind of tax exemption, reduction or privilege no matter what form the tax is or was. Today a huge part of modern charity law in Canada and other countries resides in the charity-related provisions of income tax legislation. And there the challenges start.

Let’s first go over a little background about why tax legislation tends to be very difficult, compared with other types. The reason for this is the centuries-long tug-of-war between taxers and the taxed. Any tax code is essentially a description in words of those economic behaviours that are intended to be taxed, or excluded from tax. Yet, words are inherently ambiguous; economic behaviours can be complex; and the motive to avoid or minimise tax is compelling. T’was ever thus. So, canny lawyers and smart accountants working for wealthy taxpayers repeatedly devise new forms of economic behaviour that do not fit as intended in the tax code’s descriptions. Those in charge of keeping the tax code up to date face a game of “whack a mole”. As amendments are made to plug loopholes, new loopholes are devised. Each amendment brings more elaborate wording to fix problems, address challenges and answer policy issues found in the earlier language, and sections grow like weeds into vast run-on sentences containing many qualifying and repetitious parts, subparts and cross-references attempting to nail down every angle. Thousands of amendments occur over time and the tax code grows (in Canada’s case and no doubt others) from ten pages in 1917 to over 3,000 a century later.

All of this results in several challenges when trying to concentrate on those parts of a tax code that are directly relevant to charities.

The first challenge comes from the immensity of modern tax codes. These enactments are the size of telephone books. They contain thousands of pages, many thousands of provisions and literally millions of words. This makes finding and analysing charity-related provisions like looking for a needle in a haystack. We need a product that concentrates on only those.
Second challenge: incomprehensibility. Modern tax codes are incredibly complex—more like computer programs than prose, and almost unreadable. The main problem is that they are nightmares of cross-references. Almost every provision cross-refers to others by number, without explaining what it means. Also, almost every provision uses terms that are defined elsewhere in the act, without saying so. We need a product that helps readers navigate the text in a better way than flipping from page to page; or worse, scrolling every which way on a computer screen.
Third challenge: tracing the legislative history. This is the most important thing for the purposes of this website. We need a product that shows when and where each provision originated and when and where it was amended up to the present.
Fourth challenge, in Canada’s case especially: Canada’s constitution demands that federal legislation be bilingual—French and English—and our two founding legal traditions also require that federal legislation be bijural—understandable in both common law and civil law terms. Proper interpretation requires that both versions be read and analysed together each in light of the other. We therefore need a product that presents both versions side by side in parallel columns.

Current sources

Existing products, one way or another, do not measure up, especially in terms of tracing legislative history. Starting with products available (on the internet) for free—

The Canadian Department of Justice’s website Justice Laws, presents up-to-date editions of all in-force federal acts and regulations—in English only, French only and side by side bilingual; and in XML and PDF formats. It includes all previous versions back to 2004. Their bilingual PDF edition of the Income Tax Act is 3,690 pages long (as of 12 March 2025). There is no way to obtain an edition that concentrates on charity-related provisions. Those are lost in the jungle of the rest of the act. You’re left to use word searches to find those unless you know the section numbers beforehand from other sources. There are no internal hypertext links; that is, no way to navigate to a cross-reference by clicking on it. Terms that are defined elsewhere in the act are not marked; you have to know about them beforehand. Most important for our purposes, the historical annotations appear only at the end of each section, not subsections and definitions; and they only trace back to 1992, when the last Revised Statutes version of the act was published. Which makes them almost useless to anyone wanting to find the origin and history of any particular provision.
The other main Canadian free on-line source for both legislation and case law is the website CanLII, published by a non-profit, the Canadian Legal Information Institute, on behalf of all the provincial bars. It presents a legislative database that is copied from and identical to the Justice Laws website, and has exactly the same pros and cons.

Turning to commercial printed products, several legal publishers produce annual or biannual annotated editions of the entire Canadian income tax legislation—

I use the Practitioner’s Income Tax Act, currently at its 66th edition (2024), edited by David M. Sherman & al., published by Thomson Reuters: two giant volumes totalling 2,828 pages (in English) weighing in at 7.5 pounds (3.4 kg), price Can$211. An electronic version is available for the same price; and you can get both the printed and electronic versions for Can$275. This in English only; for French you have to buy a separate French product, La Loi du Praticien—Loi de l’impôt sur le revenu, 50e édition (2024) from the same publisher at the same prices. I use the English printed product, and it is in general excellent—within the limits it offers. The annotations are very thorough and usually shown for each subsection and definition, not just the sections. For navigation purposes, this edition gaves listings at the end of each section of all cross-references and defined terms used in the section, that show where these are located elsewhere in the legislation; so you can “let your fingers do the walking” from page to page to explore what the references really mean. The index is huge and you can usually find any charity-related provision once you are familiar with the jargon. The main problem is the same as in the free products above: the historical annotations only trace back to 1992, when the last Revised Statutes came out. Look in vain for charity-related income tax provisions back to 1917.
There are other essentially similar printed products available, but it seems in English only: Thomson Reuters also publishes Stikeman Income Tax Act Annotated, 76th Edition, 2024, at the same price as, and with as far as I can tell the same content as, but under a different chief editor than, their Practitioner’s product. A similar Canadian Income Tax Act with Regulations, Annotated, 116th Edition, 2024, is published by Walters Kluwer (formerly CCH), price Can$279. And EY’s Federal Income Tax Act, 2024 Edition, is sold by CPA [Chartered Professional Accountants] Canada, price Can$210. I am largely unfamiliar with these products having only briefly glanced at them in a law library; but would hazard a guess that they have exactly the same pros and cons as the Practitioner’s product.

I fear I have little to say about major online tax legal databases such as Taxnet Pro, provided by Thomson Reuters; Intelliconnect provided by Walters Kluwer; TaxFind provided by the Canadian Tax Foundation; Knotia provided by CPA Canada. This is because each is behind a “pay wall” of thousands of dollars a year—way beyond my price range! They offer massive collections of legislation, case law, administrative documentation and academic commentary on all types of Canadian taxation, not just income tax. But again, on those few occasions when I have been able to access one of these tools in order to trace charity-related or other tax legislative history, I quickly found the history only went back to 1992 (or a little before in some cases).

There is only one book that concentrates on the charity-related provisions of the Canadian income tax legislation: Charities Legislation & Commentary by Terrance S. Carter, Maria Elena Hoffstein and Adam Parachin, currently available in its 2025 edition from Lexis Nexis, price Can$95. This book presents “excerpts from, and in some cases the entire text of approximately 145 key federal and Ontario statutes and 75 regulations that apply to charities”. Such a collection is bound to be very useful to lawyers, accountants and charity workers who need the latest current legislation contained in one convenient volume—and are not especially interested in the history. This book is only in English and covers only what is in force in Ontario. The commentary is high level, essentially introducing each enactment and briefly outlining its purpose. The portion that covers the federal income tax legislation is under one-fifth of the book, and their selection of what is charity-related seems somewhat broader than mine (discussed further below). The most important limitation for the purposes of this website is, again, the absence of historical notations from before 1992.

this website’s attempted historical edition

For this website, I have tried to improve upon the above inadequate sources by offering an (unofficial) edition of the charity-related provisions of Canada’s income tax legislation, properly bilingual, and with complete historical annotations. I, along with others, am given authority to do this by the Reproduction of Federal Law Order, SI/97-5. I have attempted to select only the provisions that directly relate to charities and donations.

That is, the selected provisions are those that are targeted only, or at least predominantly, to or about charities and donations, not other types of taxpayers and transactions.
Provisions that could apply to charities and donations depending on circumstances are not included; in other words, excluding the bulk of the income tax legislation. For example, many charities are employers, carry on businesses, make investments, own capital property or provide pension plans. Including all those provisions would nearly amount to the entire act, which is not possible for one human to do.
It is, however, necessary, to include (in smaller print) a number of provisions that are not directly related but cross-refer to or are cross-referred to by those directly related provisions or otherwise seem necessary to understand them. Definitions and such.

In terms of obtaining the authentic current text of each selected provision,—

I have copied from the original statute or regulation as officially published by the government of Canada in the last Revised Statutes or Consolidated Regulations, and then from subsequent amending statutes or regulations as officially published in the parliamentary website LegisInfo, or the Canada Gazette Parts 2 and 3, or the annual Statutes of Canada on the Justice Laws website.
But I have NOT copied from the Consolidated Acts and Regulations available on Justice Laws—for a particular reason: In those versions, Canada’s Department of Justice changed the format of all pre-2016 enactments to conform to a new legislative format adopted in 2016. The new format changed the way marginal notes and definitions are shown, and the way numbers or letters of sections, subsections, paragraphs, etc., are shown, and Justice even made minor changes to wording. They did so under authorities given to their minister of Justice under section 27 of the Legislation Revision and Consolidation Act. Since I am not that minister, I believe that, in undertaking to accurately reproduce provisions of an act or regulation, I am bound under subsections 31(2) and (3) of that act to show the text as closely as possible to what appeared in the original printed enactment. Therefore, this edition will show a mixture of formats: provisions enacted in and after 2016 will use the new format, those enacted before 2016 will use the old format.

The most important thing for this website’s purposes is complete historical annotations of every selected section, subsection and definition. I have traced the legislative history of each one through its amendments back in time to its origin, in some cases in 1917.

In terms of helping readers navigate through the maze of cross-references, I’m trying to add something that no other legal publisher has done so far as I know: hypertext links of every cross-reference (shown in blue) allowing readers to click instantly from one to another and back. (This job is woefully incomplete. See further below.)

Caveats

While I’ve tried to identify and accurately include every provision that meets the above criteria for inclusion, it’s very possible I’ve missed some. I cannot make any guarantee of completeness. Please regard this edition as a work still in progress.
Likewise, errors and omissions might have sneaked into the reproduced text or in the historical annotations. I hope not but I make no guarantee of accuracy.
Unfortunately, adding the blue hypertext internal links for instantaneous cross-references has proved to be a much more vast challenge than expected. The job is only 10% done in this edition. More will be done in future.

For the above reasons, readers desiring or needing completeness or accuracy should not rely on this edition but must use their own tools and resources to do their own research.