When charities and not for profits stage high profile events they often view corporate sponsorships as an ideal avenue to help defray the costs and raise funds. And while such sponsorships often can be lucrative for the sponsee, and useful for the corporate sponsor, without a good understanding of the tax aspects of sponsorship it is impossible to measure the true value of the sponsorship.  This understanding is complicated by the interaction of several different tax concepts.

The Canadian Council for the Arts' (the "CCA") recent proposal to allow the first $10,000 of net income earned from artistic activity to be free from federal income tax liability is not only interesting in itself but is also the latest chapter in a history of initiatives to help the archetypal starving artist. Interestingly, the proposal may be seen as a way for the government to make amends for the 2010 federal budget's cutting of 12 positions from the relatively unknown Canadian Council on the Status of the Artist. This almost forgotten initiative was established by the Status of the Artist Act, which is the focus of a recent paper, 'Status of the Artist in Canada', released by the CCA.