Ottawa, Ottawa, May 16, 2008
Archived - Canada Acting to Improve the Regime for Donations of Medicines to the Developing World
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The Honourable Jim Flaherty, Minister of Finance, and the Honourable Beverley J. Oda, Minister of International Cooperation, today announced draft amendments to the provisions of the Income Tax Act and the Income Tax Regulations that provide an incentive for Canadian corporations to donate excess inventories of medicine for the purpose of international development.
"Our Government is committed to ensuring that corporate donations of medicines to developing nations provide optimal benefits for the health needs of their citizens," said Minister Flaherty. "The regulations proposed today will better ensure that donated medicines are delivered and administered to the people who need them in accordance with international standards for drug donations."
Budget 2007 introduced a tax incentive that provides a special deduction in respect of approved medicines donated, for the purpose of international aid, to a registered charity that has received funding under a program of the Canadian International Development Agency.
"This partnership between the public and private sectors will enable life-saving medicines to reach some of the developing world's most vulnerable people," said Minister Oda. "Access to medicines is one of the greatest challenges facing international assistance efforts, and through today's announcement, Canada will be helping to provide improved health care to families across the world in an effective way."
To better ensure that donations of medicines are undertaken in accordance with accepted international standards, Budget 2008 proposed to change the definition of charities that are eligible to receive these donations to require that they be registered charities that, in the opinion of the Minister of International Cooperation, meet the conditions prescribed by regulations. The proposed regulations are being released today. Related changes to the Income Tax Act are also proposed to support the regulations.
Under the proposed regulations, to be eligible to receive donated medicines that qualify the corporate donor for the special deduction, charities will have to:
- act in a manner consistent with principles and objectives of the World Health Organization Guidelines for Drug Donations;
- have expertise in delivering medical donations to the developing world; and
- implement appropriate policies and practices with respect to the delivery of international development assistance.
The new rules will apply to gifts made on or after July 1, 2008. The Minister of International Cooperation will implement a process based on these new rules to assess charities to determine their eligibility to receive donations from corporate donors that would qualify for the special deduction.
Additional information on the approvals process will be available in the coming weeks on the Canadian International Development Agency website at www.acdi-cida.gc.ca.
The draft amendments and explanatory notes are appended to this news release and are also available on the Department of Finance website at www.fin.gc.ca.
For further information, media may contact:
Office of the Minister of Finance
Department of Finance
Office of the Minister of International Cooperation
Media Relations Office
Canadian International Development Agency
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