Taxpayers who provide a minimum of 250 hours of volunteer service in a taxation year will be able to deduct $1,000 when calculating their taxable income if Private Member's Bill C-240, An Act to Amend the Income Tax Act (Services to a Charity or Public Authority) passes all three readings.

The bill was introduced on June 21, 2011 and has passed first reading in the House of Commons. To be eligible, the volunteer time must be devoted to a registered charity, a nonprofit organization, or a municipality or other public authority (referred to herein as a "Qualifying Organization").

However, this deduction would only be available where the taxpayers received no salary, stipend, or other remuneration in excess of $3,000 in exchange for their services to the Qualifying Organization.

Thorough paper trail required

Qualifying Organizations would need to prepare certificates in the prescribed form to certify the total number of hours of service performed by the taxpayer. Once issued, the certificate would need to be filed with the taxpayer's tax return each year.

In addition, every Qualifying Organization that has issued any such certificates would need to maintain duplicate copies of each certificate and any other information the taxpayer provided to verify the number of hours of service in case the Canada Revenue Agency audits the organization's operations.

Bill has failed five times

The stated motivation behind the Private Member's Bill is to encourage more people to give not only their money, but also their time in supporting charitable and nonprofit endeavours. This Bill has been introduced five times in the past in previous parliaments. The previous versions, which are substantially the same as this one, progressed only as far as introduction and first reading.

Whether or not this Private Member's Bill will be passed is unknown at this time. However, the Bill warrants careful consideration by the government, as it is an interesting initiative designed to encourage the giving of volunteer time to the charitable sector.

A partner with Carters Professional Corporation, Esther S.J. Oh practices charity and not-for-profit law, is a frequent contributor to www.charitylaw.ca and the Charity Law Bulletin, and has spoken at the annual Church & Charity Law^TM Seminar as well as at the Canadian Bar Association/Ontario Bar Association's 2nd National Symposium on Charity Law. Her volunteer experience includes former service as a board member and corporate secretary of a national umbrella organization, and working with Canadian youth volunteering in developing countries and communities.

Contact her by email