8.3 Supporting Artists and Charities in Our Communities
Growing and vibrant communities help make Canada the best place in the world to live, work, and raise a family.
The past two years have reminded us that we are all better off when we look out for each other. Budget 2022 will make it easier for Canada’s charities to do their important work and ensure that Canadians—and people around the world—can benefit from their generosity.
As we come through the pandemic and Canadians get back on their feet, our performing arts sector is continuing to feel the impact of the closures and capacity limits of the past two years. Budget 2022 will continue to support the recovery of the performing arts sector that brings Canadians together.
Supporting Canada’s Performing Arts and Heritage Sectors
Canada’s performing arts, including our world-class theatre sector, have been devastated by closures and capacity restrictions during the pandemic. Today, both the number of productions and the employment levels in the performing arts sector remain significantly below pre-pandemic levels.
Budget 2021 provided $500 million over two years to support the reopening and recovery of Canada’s arts, culture, heritage, and sports sectors. This includes funding to support Canadian festivals, outdoor theatres, and local museums in delivering in-person experiences and events to draw visitors to our communities and encourage the safe return of in-person audiences.
The federal government has been there to support artists and performing arts organizations and workers throughout the pandemic. Critical investments in Budget 2021, including $250 million to be delivered in 2022-23, will continue to support Canada’s performing arts, and the talented Canadians who make up our arts, culture, and heritage sectors.
In addition, the 2021 Economic and Fiscal Update provided $62.3 million in 2022-23 to create a temporary program aimed at directly supporting performing artists and behind-the-scenes workers who were financially impacted by public health restrictions and closures. Funding is expected to be disbursed to these workers by summer 2022.
To complement previous initiatives, Budget 2022 proposes to provide $12.1 million over two years, starting in 2022-23, to the National Arts Centre to support the creation, co-production, promotion, and touring of productions with Canadian commercial and not-for-profit performing arts companies.
To compensate Canadian arts, culture, and heritage organizations for revenue losses due to public health restrictions and capacity limits, Budget 2022 proposes to provide an additional $50 million in 2022-23 to the Department of Canadian Heritage, the Canada Council for the Arts, and Telefilm Canada.
Supporting a More Inclusive Arts Training Sector
As the arts sector recovers from the COVID-19 pandemic, its continued vitality and success will depend, in large part, on the next generation of Canadian artists. The Canada Arts Training Fund helps build this next generation of Canadian creators and cultural leaders by supporting the training of artists with high potential.
While support for equity and inclusion is embedded in the delivery of the Fund, additional support for Indigenous and racialized arts training organizations will increase the participation, promotion, and representation of historically underserved communities.
To continue to support the arts sector’s recovery from the COVID-19 pandemic and to address historic inequities in funding levels for Indigenous and racialized arts training organizations, Budget 2022 proposes to provide $22.5 million over five years starting in 2022-23, and $5 million ongoing, to Canadian Heritage for the Canada Arts Training Fund.
Stronger Partnerships in the Charitable Sector
Canadian charities carry out a wide range of important work, including vital international development and relief activities around the world and providing direct support to Canadians here at home. Canada’s tax rules should support their work and minimize their administrative burdens, while still ensuring accountability for how charitable resources are used.
Both the charitable sector and parliamentarians have put forward a number of proposals to achieve these goals, while allowing greater flexibility for charities to support non-profit groups that may not have the ability to pursue charitable status of their own. The government supports these efforts.
To ensure sufficient flexibility for charities to carry out their work, Budget 2022 proposes to amend the Income Tax Act to allow a charity to provide its resources to organizations that are not qualified donees, provided that the charity meets certain requirements designed to ensure accountability. This is intended to implement the spirit of Bill S-216, the Effective and Accountable Charities Act, which is currently being considered by Parliament.
Boosting Charitable Spending in Our Communities
Every year, charities are required to spend a minimum amount based on the value of their investment assets. This is known as the “disbursement quota” and it ensures that charitable donations are being invested into our communities.
Following consultations with the charitable sector in 2021, Budget 2022 proposes to introduce a new graduated disbursement quota rate for charities. For investment assets exceeding $1 million, the rate of the disbursement quota will be increased from 3.5 per cent to 5 per cent.
This new, higher rate will boost support for the charitable sector while being set at a level that is sustainable, ensuring the continued availability of funding over the longer term.
These changes will be effective in respect of a charity’s fiscal period beginning on or after January 1, 2023, and will be reviewed after five years.
The Canada Revenue Agency will also improve the collection of information from charities, including whether charities are meeting their disbursement quota, and on information related to investments and donor-advised funds held by charities.