Canada Revenue Authority and Shared Spaces

Canada

Starting a Non-Profit Center Charity in Canada

Glen Newby, New Path
The challenge of starting a new charity that has as its sole purpose the operation of a non-profit center are a couple:

  1. A new charity takes time and legal costs to get registered with CRA. It is somewhat easier to change the “objects” (legal purpose) of a current charity to incorporate the operations of a center (that’s what New Path Foundation did);
  2. If in the CRA “objects” it is specifically stated to operate a center, then the charity would assume an objective of being an “umbrella” charity , which really means its purpose would be funding other charities (usually through grants) but it can be interpreted as providing (and perhaps subsidizing) rental space;
  3. If a new charity successfully registered with CRA and stated its “objects” to be that of an umbrella organization providing physical space, then there would be restrictions on who they can actually rent to. Other charities registered with CRA would be allowed , but non-profits that are not registered would not be allowable tenants. And any for-profit tenants would definitely not be allowed.

As always, a good legal consultation is always recommended. I do know that it is much easier to utilize an existing charity and simply make application for some changes in its objects.

 

Renting Space to For-Profit Groups in Canada

Ask-NCN Conversation – August 25, 2016
Moe Moloughney, Heartwood House
Yes we do have commercial tenants in three retail spaces on the property. The leases for these groups are different from our non-profit groups as their leases follow a commercial formula for the calculation of rent.

There are several factors to consider when renting space to for profit groups:
1. Property tax:
In Ontario commercial property tax applies for all space rented by “for profit” groups. This will impact efforts to obtain property tax exemptions or reductions in property tax costs. The Calgary group should consult the Provincial and Municipal governments regarding property tax conditions. Property tax exemption is a goal that can be achieved but only on the not for profit occupancy.

2. It’s important to consult Revenue Canada about charity conditions to ensure compliance regarding for profit groups and charity conditions for income from these sources.

3. HST – the group should consult Revenue Canada regarding requirements for the collection of HST.

 


Last updated byLeena Waite