Blog

October 01, 2016

CRA critical path, process + performance measurement framework for charity political activity audits

Here is a copy of a few documents from the Charities Directorate dealing with the political activities audit conducted by the CRA.   CRA released under access to information, their critical path, process and performance measurement framework for charity political activity audits.  If you want more information about charities and political activities see our web directory Political Activities and Canadian charities.

September 30, 2016

List of foreign charities that have received a gift from Canada and are qualified donees

Currently there are only two organizations on the "List of foreign charities that have received a gift from Her Majesty in right of Canada".   They are the Aga Khan Foundation and the Woodrow Wilson International Center for Scholars, both of which were off the list and now are on again.  No rhyme or reason why these groups are picked out of millions of foreign ngos.  Meanwhile Auschwitz-Birkenau Foundation, The Rhodes Trust, and the Bill, Hillary & Chelsea Clinton Foundation are no longer on the list. Seriously this list needs a rethink and greater transparency.  

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September 27, 2016

CRA launches consultation on political activities by Canadian registered charities

The CRA today launched its political activity consultation.  It reinforces the importance of charities being engaged in the political process. The CRA is looking for feedback on the rules and CRA's guidance.  People or organizations have until November 25, 2016 to provide comments.   We have provided a large amount of documents and analysis on the issue of charities and political activities in our political activities and Canadian charities directory.  

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September 27, 2016

House of Commons Finance Committee 2017 pre-budget consultations

The House of Commons Finance Committee (FINA) has posted the pre-budget submissions that it received.  There are 420 briefs including our brief Increasing the  productivity of the charity and non-profit sector through greater transparency and accountability.  If anyone notices any other briefs discussing greater transparency in the non-profit and charitable sector please do let me know.   

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September 27, 2016

Upcoming Webinars for the Canadian Charity Law Association

The Canadian Charity Law Association is delivering some upcoming webinars.  Registration is free but space is limited. 

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September 26, 2016

CRA to launch consultation on charities and political activities

The CRA has issued a media advisory that the "Honourable Diane Lebouthillier, Minister of National Revenue, will launch public consultations to clarify the rules regarding the involvement of registered charities in political activities."  She will make the announcement tomorrow, Tuesday, September 27, 2016 in Ottawa. This consultation will give the public an opportunity to express their views on charities and political activities.  

We have provided a large amount of documents and analysis on the issue of charities and political activities in our political activity directory.  We will be helping various organizations with their discussions and submissions on this important topic.  

September 24, 2016

CRA analysis of charities that disclosed on T3010 they did political activities

We recently obtained a copy of the CRA analysis of charities that disclosed on the T3010 they did political activities.  In a note from Bryan McLean, Director of Policy, Planning and Legislation Division of CRA to Cathy Hawara the then current Director General of the Charities Directorate, Mr. McLean includes a summary of the percentage of Canadian charities that identified on the T3010 that they conducted political activities and also the names of those charities.  

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September 20, 2016

Some simple and free steps to increase your Canadian registered charity’s transparency

The work that charities do is extremely important to our society, so it is vital that various stakeholders, such as the public, the media, the government, donors, employees, boards, donors and others. have access to key information on what the charity is doing and how it is doing it. In general transparency will ultimately increase public trust and confidence in the sector by making the public more informed about the work of charities and making it more difficult for people to misuse charities. However, from a legal perspective registered charities have few requirements in terms of transparency.  Registered charities must file a T3010 Registered Charity Information Return with a financial statement and various schedules with the CRA every year.

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September 17, 2016

FATF releases mutual evaluation report on Canada - Canada needs to improve AML and CTF efforts

The Financial Action Task Force (FATF) is an inter-governmental body which sets standards for combating money laundering and terrorist financing.  Although it is not widely known it has tremendous power to affect legislation and enforcement in the area of money laundering and terrorist financing on a national and international level.   It has 35 member states, including Canada, and occasionally those states are evaluated on their efforts to prevent money laundering and terrorist financing.  The evaluation of Canada took place recently and the over 200 page report has now been made available. I presented to a panel of FATF evaluators when they were in Canada to prepare the report.  I was asked by them to speak about the regulation of non-profits and the regulation of lawyers.  

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Topics: News

September 17, 2016

CRA Assessment of Political Activities Audit Program against Oct 2012 Compliance Framework

Last week we posted the CRA Compliance Framework for Files with Identified Political Activities. Now here is the draft CRA Assessment of Charities Directorate Political Activities Audit Program against Oct 2012 Compliance Framework.  It was prepared by the Charities Directorate of the CRA around September 17, 2014 to review how the Charities Directorate was doing in relation to the October 2012 compliance framework.  

September 15, 2016

Modernizing charity law in Canada is for now a Pandora’s box

The Liberal Government has made some noises about modernizing charity law.  Who could be opposed to modernization?  As there is no idea as to what "modernization" means, it has opened up all sorts of calls for changes to charity law in Canada - many of the ideas would be expensive, counterproductive, stifling, or ultimately destroy the positive reputation of the charity sector.  Wikipedia defines a Pandora's box as "a process that generates many complicated problems as the result of unwise interference in something."  Although only time will tell, it appears that "modernizing charity law" has a small upside and a very large downside.  

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September 12, 2016

CRA media response on Canadian charities and funding or supporting terrorism

Here is a CRA document provided under access to information rules which includes their media response on Canadian charities and funding or supporting terrorism.  Not surprisingly because of the very limited scope for CRA to divulge information under the confidentiality provisions of the Income Tax Act (Canada) there is little information divulged.  

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September 10, 2016

CRA Compliance Framework for Files with Identified Political Activities

Here is a copy of the CRA Compliance Framework for Files with Identified Political Activities from the Charities Directorate of the CRA.   It is dated October 9, 2012.  It provides some answers to some of the questions around how were charities identified for audit.  Next week we will post a follow up document namely the "Assessment of Charities Directorate Political Activities Audit Program against October 2012 Compliance Framework".

September 07, 2016

CRA presentation on the Regulation of Charities - Overview September 2014

Here is a copy of a CRA Powerpoint presentation slide deck on the Regulation of Charities - Overview - September 2014.  It provides some useful information including the CRA's audit plan.  For example, the audit plan shows that CRA planned on auditing in 2014/15 32 registered Canadian amateur athletic associations (RCAAAs).  That is a pretty large number as there are only 119 RCAAAs in total.   Political activity audits in that same period only accounted for 2% of CRA audits.  Only 4% of charities audited resulted in CRA issuing an notice of intention to revoke.  

September 07, 2016

Cost of charitable tax incentives in Canada approximately $4 billion per year

In the notes section of a CRA presentation "Regulation of Charities - Overview" the CRA notes that in 2012 the amount of receipts issued was $14.28 Billion and that "the federal assistance for charitable donations in 2012 exceeded $2.9 ... Individuals also claimed over $1 billion in provincial and territorial tax credits billion".  Therefore the cost of having a tax subsidy just for donations to registered charities is almost $4 Billion. 

September 06, 2016

Canada Without Poverty charter challenge to political activity rules of Canadian charities

A Canadian charity has launched a charter challenge against the restrictions on registered charities in carrying out political activities. They argue that it violates freedom of speech and assembly amongst other things.  The CBC covered it in an article entitled "Anti-poverty group launches challenge of political-activity limits".

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September 04, 2016

Copy of the CRA Ministerial Transition Briefing Binder from November 2015 - labelled “secret”

We have uploaded a copy of the "secret" CRA Ministerial Transition Briefing Binder provided to the new Minister of Revenue Diane Lebouthillier in November 2015.  It was obtained pursuant to access to information.  It covers the mundane matters such as roles and responsibilities and an introduction/overview to the CRA and goes on to discuss top issues that the CRA has to deal with including the "tax gap", FACTA, BC and Ontario housing market, charities and political activities, international collaboration on tax avoidance  etc.  The document as a whole provides a good civics lesson and context from the CRA perspective as to the role and responsibilities the CRA which is an important agency within the Federal government.  It is searchable if you are looking for something in particular. Over the next couple of months I will try to release every Saturday another CRA document on our website.     

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August 25, 2016

CharityVillage: “A national charity census: Mark Blumberg’s Snapshot of the Canadian Charity Sector”

August 24, 2016

CPA Canada’s 20 Questions Directors of Not-for-Profit Organizations Should Ask about Mergers

The Chartered Professional Accountants of Canada (CPA Canada) have released today a booklet entitled 20 Questions Directors of Not-for-Profit Organizations Should Ask about Mergers. It is located on this CPA Canada page. It is written by Andrea Cohen Barrack, CEO of the Ontario Trillium Foundation (OTF), Canada’s largest granting foundation, and Mark Blumberg, a charity lawyer and partner at Blumberg Segal LLP and editor of www.globalphilanthropy.ca, www.canadiancharitylaw.ca, smartgiving.ca and charitydata.ca

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August 17, 2016

GLGI cost decision results in huge award in favour of CRA

In a 44 page cost decision Pizzitelli J. discusses how much costs should be given to CRA (the Respondent) with respect to the abusive charity gifting tax scheme, GLGI, that he had previously provided a judgment in.   The hearings on the case were over 25 days - certainly quite a thorough vetting of the issues.  You can read the full GLGI cost decision here.  Pizzitelli J. notes:

"While I appreciate the Promoter may bear the direct responsibility for the sham it has perpetrated on the Appellants and the Canadian public at large and benefited to the extent of millions of dollars in cash contributions, the Appellants and Bound Appellants did blindly or willingly jump on the Program train in expectation of receiving a net cash advantage from their donation. As I indicated in paragraph 88 of my Reasons in this matter: ..When otherwise good people turn a blind eye to the obvious reality surrounding them, they cannot lay blame on others for the consequences that follow from the fraud or sham of others. They certainly should not expect the Canadian public to fund their losses. Accordingly, I am not prepared to limit liability for costs solely to the Promoter as requested by the Appellants and Bound Appellants."

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August 12, 2016

Charity Commission has new guidance on charities contemplating litigation

If your charity is considering litigation it might find recent guidance from the Charity Commission of England and Wales useful.  It sets out some principles which should guide trustees.

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August 12, 2016

Deficiencies in a registered charity’s T3010 filing is covered extensively by the CBC.

The CBC recently wrote an article entitled “Iris Kirby House fundraising foundation refiles public charity disclosure documents to fix errors”.  The article covered a registered charity and the mistakes in its T3010 Registered Charity Information Return filings.   It is not often that such a lengthy article is written on a charity and inaccurate financial statements/T3010 filings that I thought I should blog about it. I am only focusing here on the T3010 problems and the response of the charity to the T3010 problems, and not any of the other substantive allegations by supporters or detractors of the charity.

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August 12, 2016

Draft Guidance from the Charity Commission on “Grant funding an organisation that isn’t a charity”

The Charity Commission of England and Wales has recently released a draft guidance on the types of controls English charities should be using when providing grants to non-English charities. 

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August 12, 2016

Bond article on increasing funding for local CSOs

Recently at the BOND website there was a good article on importance of funding local civil society organizations (CSOs) and how the mindset of some funders needs to change.   The Article is entitled "From rhetoric to reality – how do we move beyond intentions when it comes to funding local CSOs directly?"

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August 06, 2016

Blumbergs’ submission to Finance on the 2017 Budget

Do you require legal advice with respect to Canadian or Ontario non-profits or charities?

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Charity Lawyer Mark Blumberg

Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.

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