Finance is opening the floor to stakeholders for feedback on the potential increase of the disbursement quota for charities. Finance previously announced in the 2021 federal budget that it intended to launch public consultations on whether the disbursement quota should be raised beginning in 2022. The disbursement quota requires charities to spend a minimum amount on their charitable programs or gifts to qualified donees each year.

Charities, practitioners, stakeholders and the public are asked to provide their comments on this change, including the CRA's enforcement of these rules, by September 30, 2021.


Charities are required to spend a minimum annual amount (currently 3.5%) on their own charitable programs or on gifts to qualified donees. This disbursement quota is determined based on the value of the charity's property not used for charitable activities or administration (averaged over a 24-month period).


Finance is seeking feedback on whether it should:

  • Raise the disbursement quota to produce additional funding for charities, and to what extent
  • Increase the disbursement quota to a level that causes foundations to gradually encroach on investment capital, and whether it would be sustainable in the long term for the sector
  • Make additional tools available to the CRA to enforce the disbursement quota rules (e.g., monetary penalties or other intermediate sanctions).

Finance is also asking stakeholders whether:

  • The relieving and accumulation of property provisions continue to be useful for charities
  • The existing carry-forward provisions strike the appropriate balance between ensuring the timely disbursement of funds and allowing foundations to make large gifts on a more infrequent basis
  • Any temporary changes should be considered in the context of the COVID-19 recovery.

Finance says it will consider this feedback alongside input from the Advisory Committee on the Charitable Sector to help inform decisions on potentially increasing the disbursement quota and updating the CRA's enforcement tools.

For more information, contact your KPMG adviser.

Information is current to August 9, 2021. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500