In a February 3, 2015 Technical Interpretation (2014-0542791E5, Townsend, A.), CRA discussed whether the rental of excess parking spots by an NPO affordable housing provider would make the Organization ineligible for the Paragraph 149(1)(l) exemption from Part I tax.

The Courts have determined that a profit can be earned as long as it is incidental and arises from activities directly connected to the not-for- profit objectives. CRA noted that, in this case, the direct connection test would likely not be met, however, such a determination is fact based. Factors which may change the determination include:

  • (a) how and why the extra parking spots were acquired by the housing provider; and,
    (b) why the extra spots continue to be maintained.


    For further information see VTN Monthly Tax Update Seminar, Issue No. 407