We assist Canadian charities understand their legal and ethical obligations when operating charities in Canada or abroad and provide insights and information to non-Canadian charities interested in operating or fundraising in Canada.
The charitable sector in Canada has become highly competitive. There are over 86,000 Canadian registered charities. Donors, regulators, media, the public as well as other stakeholders, have increasingly high standards for charities and their operations. GlobalPhilanthropy.ca will assist non-profits and charities in Canada in trying to be transparent, legal, ethical and effective.
The CRA on February 6, 2015 released a new guidance entitled CG-022 Housing and Charitable Registration Guidance. It covers a number of issues relating to housing including how housing can be used to relieve poverty and the provision of specially adapted housing for those with disabilities. It sets out a number of specific pieces of information that would need to be provided if an organization is applying for charity status to be able to show that the provision of housing is charitable. Existing housing providers should also be able to show that information if they ever audited.
In Arthur v. The Queen, 2015 TCC 43, Juliet Arthur was appealing a reassessment made by CRA relating to two receipts. The case provides a good summary of the cases dealing with lack of appropriate documentation for donations - especially when they are either cash or gifts in kind. The TCC dismissed the appeal with "Considering the evidence as a whole, I conclude that the appellant has not shown on a balance of probabilities that she made a charitable donation in the total amount of $3,529 to Emilia in 2006, even though a receipt was provided which purported to show that she had done so."
As we have reported before Industry Canada has sent out over 16,000 notices of pending dissolution to about 6000 CCA corporations. Typically Industry Canada sends such notice to the registered office and each director. However, if Industry Canada knows that the address is not correct they will not send out a notice to that address. Industry Canada was holding back sending notices to groups that have recently filed or are registered charities. However, in order to tie off the CCA, Industry Canada has to have removed all CCA corporations. Industry Canada a few weeks ago confirmed that its goal is to provide by September 2015 notices to all other remaining CCA corporations including registered charities.
We are now in February of 2015. ONCA has not moved forward since the Ontario election last year. It looks like ONCA may not even come into force until mid-2016 and perhaps 2017. It is difficult to know what will happen but the microfiche based record system for Ontario corporations and very outdated technology that Ontario currently uses will likely make the transition challenging. There are 59,000 Ontario non-profit corporation listed on the Ontario government database. If even 30,000 are active and need to make changes I am not confident that the Ontario system is going to work well. The easy and quick solution for many Ontario corporations that are not interested in waiting any longer is to move to the Federal CNCA. Skip the line up and anxiety of ONCA and move to the CNCA. Here is an article our firm wrote on the subject entitled "Ontario Corporations Don't Need to Wait for the ONCA - Continuing from the OCA to Federal Jurisdiction" for the Ontario Bar Association.
The Austrlian website Pro Bono Australia has published an article on an Australian Federal Court decision to impose a $1.5 million fine on a "fake philanthropic scheme was modelled on an arrangement which previously failed in Canada, and involved the purchase and donation of AIDS pharmaceutics to charities in Africa." It is interesting that as we are considering in Canada the constitutionality of civil penalties, that the Australians are imposing such civil penalties on Canadians for schemes offered in Australia by a Canadian company. It is also interesting that these type of abusive charity gifting tax schemes issued receipts in Canada for over $6.3 billion dollars. The "success" in Australia was much more limited and perhaps 1/1000 of that.
CRA recently released a letter which discusses whether an organization approved for registration as a qualified donee (as a public body performing a function of government) by the Charities Directorate requires a separate ruling to claim tax exemption under 149 (1)(c). CRA determined that a separate ruling (from the Income Tax Rulings Directorate) is not required, unless circumstances change and the status of the qualified donee will need to be reviewed, at which time a separate ruling may be requested.