By Terrance S. Carter and Jacqueline M. Demczur

As initially reported on our LinkedIn page on December 31, 2024, the Government of Canada announced on December 30, 2024 that “the federal government intends to amend the Income Tax Act to extend the deadline for making donations eligible for tax support in the 2024 tax year, until February 28, 2025.” This announcement means that donors intending to make donations that will qualify for a charitable donation tax receipt for the 2024 calendar year will have an extended period of time up to the end of February 2025 to make those donations.

This proposed extension aims to address disruptions caused by the recent four-week Canada Post mail stoppage. Legislation to enact the proposed extension is expected to be introduced when Parliament reconvenes in 2025. Currently, Parliament is set to reconvene on Monday, January 27, 2025.

While the Government’s announcement of this proposed extension is well-intentioned and is welcome news, it raises a number of questions for the charitable sector, the answers to which are, at this point, unclear. These questions include the following:

1. Does this extension apply only for donations sent through the Canada Post system or will it include donations made online or through other forms of delivery? Presumably it is both, but clarity is needed.

2. For donations made between January 1, 2025 and February 28, 2025, will charities need to ask their donors if they prefer a donation receipt for 2024 or 2025?

3. What will happen to the proposed extension in the event that the required amendments to the Income Tax Act (Canada) (“ITA”) are not able to be passed before February 28, 2025?  This could occur in the event that Parliament is prorogued by the Government beyond February 28, 2025, or a vote of non-confidence in the Government takes place and an election is called as a result.

4. Is this to be a one-time extension for 2024 only or could this become a precursor for a possible permanent amendment to the ITA to extend the time for making charitable donations in future years?

We expect that there will be many other questions that the charitable sector will have in relation to this proposed extension of the charitable donation deadline. Given these questions, it is hoped that the Canada Revenue Agency, Charities Directorate, will prepare and release — on an expedited basis — a detailed statement regarding this proposed extension, including an explanation on how it is to be practically implemented by charities, together with helpful feedback in response to the many questions that this extension raises for the charitable sector.