Blog

April 19, 2010

The Canada Revenue Agency revokes the charitable status of Destiny Health and Wellness Foundation

The CRA announced today the revocation of another Canadian registered charity called “Destiny Health and Wellness Foundation” which was involved with charity gifting tax shelters.

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April 19, 2010

The Canada Revenue Agency revokes the charitable status of Liberty Wellness Initiative

The Canada Revenue Agency has just announced that it has revoked the charitable status of the Canadian charity “Liberty Wellness Initiative” for involvement in a charity gifting tax shelter.

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April 16, 2010

Legal fees and Canadian charities

There have come to light a couple of instances of large expenditures by Canadian charities on legal fees.  Canadian registered charities are allowed to spend funds on legal fees.  In some cases, say for example a legal clinic, such expenditures may be considered charitable.  In other cases they are administrative - ie. part of the normal cost of running a charity.  In this note I cite a couple of examples of very large legal fees.

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April 16, 2010

Israelite Church of Christ Canada - CRA wins procedural matter dealing with jurisdiction of FCA

The Israelite Church of Christ Canada is a short procedural case dealing with the jurisdiction of the Federal Court of Appeal in which the federal court of appeal granted CRA’s motion to quash the appeal .  Here is CRA’s summary policy on appeals to the Federal Court of Appeal.  http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/csp/csp-a14-eng.html Here is more information on the appeal choices that charities have http://www.cra-arc.gc.ca/gncy/prgrms_srvcs/dsgr/chrts-eng.html Here is the decision of the Federal Court of Appeal.

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April 15, 2010

Charity Workshops for boards, staff and other stakeholders

Here is a list of some of the top 10 workshops I have been delivering around Canada over the last year.  If you think that your organization can benefit let me know and maybe we can work something out.

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April 14, 2010

Article on salary cap bill for Canadian charities discussed in Globe and Mail by Paul Waldie

I got a mention in an article by Paul Waldie on the issue of salary disclosure and salary caps in the Canadian charitable sector.  The article is entitled Six-figure salaries the norm at top charities and it is located at:  http://www.theglobeandmail.com/news/national/six-figure-salaries-the-norm-at-top-charities/article1533823/  I was also on CTV’s CP24 discussing the impact of Bill 470 on certain charities.

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April 13, 2010

CRA Issues Notice of Suspension to International Relief Fund for the Afflicted (IRFAN-Canada)

The Charities Directorate of the CRA has issued a Notice of Suspension to International Relief Fund for the Afflicted (IRFAN).  Prior to this suspension there was only 1 other charity that was suspended.  CRA is making greater use of the intermediate sanctions - ie suspensions or penalties rather than revocation. Here is a copy of the CRA press release.

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April 13, 2010

Interesting UK study on public perception of charities depending on size

In this short article in Third Sector entitled “Public think small charities are least wasteful and closest to beneficiaries” there is a discussion of UK public perception of small, medium and large charities.

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April 13, 2010

Conflicts of interest, or perceived conflicts of interest, can be very costly for Canadian charities

The New York Times has reported that “The Gates Foundation has withdrawn a $5.2 million grant to a Canadian research center for planned tobacco control work in Africa, after learning that the chairwoman of the center’s board was also a board member for a unit of one of the world’s largest tobacco companies.”  What is unusual about this story is how public it has gotten with press releases etc.  Canadian charities should take the issue of conflicts of interest seriously and should have conflict of interest policies and they should follow them.  It is easier and better to avoid problems such as this one rather than having to deal with them.

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April 11, 2010

Interesting note from Ontario Trillium Foundation on importance of ethical, accountable governance

Here is an excerpt from a speech recently given by Helen Burstyn, Chairperson of the Ontario Trillium Foundation on the importance of ethical, accountable governance.

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April 10, 2010

Canadian Charities Recently Revoked by the Charities Directorate of CRA for Cause 2010

I was recently wondering how many Canadian charities have recently lost their registered charity status for cause?  Also for what reasons did they lose their registered charitable status?  See my note
Canadian Charities Recently Revoked by CRA for Cause.

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April 10, 2010

Charges laid by CRA in Canadian inflated donation tax fraud investigation

Here is a copy of a press release from the Canada Revenue Agency entitled “Charges laid in donation tax fraud investigation”.  In the press release CRA discusses the charges it has laid against three people who allegedly issued donation receipts for more than the amount of the donation.  CRA noted that “The Income Tax Act permits registered charities to issue tax receipts only for the amounts actually donated. Schemes that promise a tax receipt in excess of what a donor gives are usually fraudulent. The CRA audits charities to put a stop to such schemes and intends to prosecute tax preparers, directors of charities, and donors who are found to be involved.”

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April 10, 2010

Transparency - What can the Charities Directorate of CRA disclose about registered charities?

The Income Tax Act (Canada) sets tremendous limits on the ability of CRA to disclose information about Canadian charities.  Essentially, the Income Tax Act in section 241 and its confidentiality provisions forbid CRA from disclosing any information about any registered charities either through informal request or a formal access-to-information request unless the information falls within certain narrow exceptions.  I will note below the provisions but I think that CRA should have greater flexibility to be able, especially in the few cases of major charity scams or tax avoidance schemes, to warn Canadians about any concerns that CRA has.  Unless a charity consents to disclosure (not likely), CRA now can only provide, after the charity has lost its registered status, either its “entirety of or any part of any letter sent by or on behalf of the Minister to the charity relating to the grounds for the revocation or annulment”.  By the time the charity has lost its registered charity status it could be years after CRA had significant concerns about the charity.

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April 10, 2010

Contact Information for the Charities Directorate of the Canada Revenue Agency (CRA)

Here is the contact information for the Charities Directorate of the Canada Revenue Agency.

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April 10, 2010

T3010B - CRA’s views on “What constitutes a completed annual filing?”

It is very important that Canadian registered charities file their T3010B Registered Charity Information Return.  This is supposed to be done within 6 months of the year end.  However, it is important not only that it is filed but also that it is accurate and complete.  In the Charities Directorate mailing called RC296E What’s the Scoop 2010 or the French version at RC296F En exclusivité 2010 Renseignements pour les organismes de bienfaisance enregistrés the CRA discusses what “What constitutes a completed annual filing?”

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April 10, 2010

T3010B - Common mistakes with Form RC232-WS or Form RC232 - director worksheets for Ontario charity

In this piece CRA identifies certain common mistakes in how registered Canadian charities that were incorporated in Ontario and subject to the Ontario Corporations Act file Form RC232-WS or Form RC232.  This directors/officer worksheet is filed with their T3010B Registered Charity Information Return.

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April 10, 2010

New CRA Charities Directorate electronic publication to replace Registered Charities Newsletter

The CRA has announced that they will be producing an electronic publication to replace Registered Charities Newsletter.  It will be called “Charities Connection”

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April 10, 2010

Improved turnaround time for Canadian charity applications at CRA with backlog removed

According to CRA “Thanks to changes in processes, more resources, and the dedication of staff and management in the Directorate’s Assessment, Determinations and Monitoring Division, it now takes significantly less time to process applications for registration as a Canadian charity.”  More complicated applications that I file that used to take 6-9 months to now being responded to in 6-9 weeks - it is an amazing improvement which is welcomed by all those involved with applications for charity status.  On a sad note after four years in the Charities Directorate, David Moore, the Director of the Determinations Division, and instrumental in reducing the backlog has moved to the Treasury Board Secretariat (TBS) from the Charities Directorate. David Moore was responsible for establishing the Client Interface and Service Division and led the work on the Small and Rural Charities Initiative which was and continues to be very successful in making CRA more responsive to the needs of small and rural charities. David will be missed. I understand that Linda Desrochers, will become the interim Director of the Determinations Section.

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April 09, 2010

Mark’s mini poll at AFP Conference on CRA’s Fundraising Guidance

In December 2009 I delivered a presentation on “CRA’s Fundraising Guidelines –Legal, Ethical and Practical Issues” to the Association of Fundraising Professionals (AFP) GTA Congress 2009.  Prior to giving the presentation I handed out a mini poll to the 100 or so attendees at my session and about 47 of them returned the poll to me.  The attendees were almost all fundraisers and probably the fundraisers who had the greatest interest in the topic.  This is certainly not scientific.

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April 09, 2010

Letter from Imagine Canada on Bill C-470, Private Member’s Bill on salary cap

Here is a copy of a letter from Imagine Canada sent out today to its members talking about Bill C-470, a Private Member’s Bill, trying to require certain disclosure and a cap on charity salaries.

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April 08, 2010

Public Sector Compensation Restraint to Protect Public Services Act freezes certain charity salaries

The Ontario government in the Public Sector Compensation Restraint to Protect Public Services Act, 2010, has proposed to freeze the salaries at certain Ontario charities.  The bill has passed first reading [now second reading].  It includes school boards, hospitals, universities and colleges.  It also applies to non-profits and charities that received at least $1,000,000 in funding from the Government of Ontario in 2009, as determined for the purposes of the Public Sector Salary Disclosure Act, 1996.  It freezes salaries for a period of 2 years, although there is an exception for those covered under a collective agreement and a few other narrow exceptions.

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April 06, 2010

CRA publication on “Using Tax Havens to Avoid Paying Taxes -Worth the Risk?”

Abusive tax schemes involving tax havens or secrecy jurisdictions undermine our tax system and all the program that are supported by taxes - not to mention impose additional burden on other taxpayers.  I thought that this sentence from the CRA publication on “Using Tax Havens to Avoid Paying Taxes -Worth the Risk?” is interesting that “For tax shelters that involve gifting, CRA audits have determined that 96% of these arrangements make use of tax havens.”  Here is the file rc4507- “Using Tax Havens to Avoid Paying Taxes -Worth the Risk?”

April 06, 2010

Gordon Pape warns against charitable donation tax shelters

In a recent article by Jonathan Chevreau of the National Post, Gordon Pape warns Canadians not to be involved with charity tax shelter schemes that promise an official donation receipt greater than your cash contribution.

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April 06, 2010

Is a particular First Nation band a public body performing a function of government?

This letter from CRA discusses whether a particular First Nation band is a public body performing a function of government? 

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April 06, 2010

CRA letter on Canadian students attending Canadian campus of foreign university/distance education

This letter from the Canada Revenue Agency discusses the issue of “Are students who attend classes at a Canadian campus of a foreign institution “enrolled at an educational institution in Canada” for purposes of 118.5(1)(a) of the Act? and also “Do students who are taking distance education courses (internet) from a foreign university with a Canadian campus rely on 118.5(1)(a) or 118.5(1)(b) for the tuition tax credit?

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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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