CRA recently released a letter which discusses whether required changes to a research institute's (the 'Institute') Letters Patent (the charitable purposes and the dissolution clause) in order to obtain status as a registered charity will affect the status of the entity as an approved research institute for purposes of clause 37(1)(a)(ii)(B) of the Income Tax Act. CRA held that there were no changes being made to the activities of the Institute so its status as an approved research institute would not be affected. Here is an excerpt from the CRA letter:

“Notwithstanding the above-described changes, you maintain that the Institute will continue to carry on activities that unquestioningly fall within the meaning of “scientific research and experimental development” (“SR&ED”), as that term is defined in subsection 248(1) of the Act such that all the conditions and requirements that are set out in the Approval Letter will continue to be met by the Institute.

Provided the Institute continues to operate in the manner set out in the Approval Letter, the proposed changes to the Institute’s Letters Patent as described above, would not, in and by themselves, affect the Institute’s status an approved research institute for purposes of clause 37(1)(a)(ii)(B) of the Act.”

The full CRA letter can be accessed here.