Burns Lake mayor and council issued a statement last week saying the municipality’s actions have not always been “consistent with federal tax law.”
Council recently received supplementary information on matters relating to its current practice of handling the funds of nonprofit organizations.
According to council, the information received clearly indicates that concerns recently expressed by council were “well founded.” These concerns included the administration of grant funding on behalf of other organizations for the purposes of obtaining GST rebates for those organizations, and the provision of tax receipts for donations made through the village to other groups lacking registered charity status.
In light of this information, council has determined that the municipality can no longer administer the funds of other organizations, nor will it issue tax receipts for directed donations transferred to non-qualified donees under the income tax act.
“While council recognizes that this may create some short-term hardship for organizations that have benefited from the municipality’s previous policies in this regard, it is confident that these organizations can make alternative arrangements that do not expose themselves or the municipality to unacceptable risk,” reads the statement.
The board of directors of the Burns Lake Mountain Biking Association (BLMBA) recently wrote a letter to council saying that BLMBA would be negatively affected by this decision.
“BLMBA has signed four contracts worth over $269,000 with the GST portion, totalling approximately $13,450; without the partnership with the Village of Burns Lake, BLMBA will be forced to pay this amount,” wrote BLMBA president Epkens-Shaffer.
Council said the village is committed to working with organizations it has assisted in the past to ensure this transition is “made smoothly.”