CRA finds that donations generated from a charity’s special campaign were not “extraordinary items,” and were not excluded for CEWS purposes

A registered charity undertook a special campaign in response to the COVID-19 pandemic that resulted in a large increase in its donation revenue. Should such donations be excluded from its “qualifying revenue” for CEWS (wage subsidy) purposes as “extraordinary items”? CRA stated:

[T]he solicitation and receipt of donations is part of the Charity’s normal activities in the ordinary course of its operations. Accordingly, we would not consider the Campaign donations to be extraordinary items.

CRA also indicated that funding received by the charity from a municipal government would be included in its “qualifying revenue” (absent an election under (a)(ii) of the definition) on the basis of being “funding received from government sources.”

Neal Armstrong. Summaries of 15 December 2020 External T.I. 2020-0855601E5 under s. 125.7(1) - “qualifying revenue” – (c), (a)(ii).