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February 14, 2014

Important message from CRA to Canadian charities incorporated under the Canada Corporations Act

The CRA has reminded Canadian registered charities and registered Canadian amateur athletic associations that are incorporated under the Canada Corporations Act that the have till October 17, 2014 to continue to the new CNCA or face possible revocation of charity status in the event they are dissolved by Industry Canada.  This message only relates to Federal non-profit corporations and not provincial incorporated charities.

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February 10, 2014

2014 Federal Budget and its Impact on Canadian Charities

Today Finance Minister Jim Flaherty introduced the Canadian Federal Budget 2014.  The budget had a large number of provisions dealing with non-profits and charities. Here are some excerpts from the Federal Budget in one PDF document.    Overall I was very pleased with the provisions of the budget dealing with charities.

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February 09, 2014

Who are the Canadian environmental charities?

We recently reviewed the T3010 information for 2012 to see how many charities identify themselves as doing work that relates to the environment.  When we reviewed the T3010 about 1150 registered charities identify themselves as carrying on some work in one of three environmental areas. 

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February 08, 2014

T3010 descriptions of Canadian charities and political activities

About 19,000 Canadian charities have filed their 2013 T3010s so far.  Of those charities some note that they are doing political activities.

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February 07, 2014

G&M “Budget will include measures to expose links between charities and crime, Flaherty says”

In a Globe and Mail article entitled “Budget will include measures to expose links between charities and crime, Flaherty says” there is a discussion of potential items affecting charities in the 2014 Federal Budget set to be delivered on February 11, 2014.

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February 07, 2014

Power and Politics with Evan Solomon deals with Canadian charities and political activities

Last night I was interviewed by Evan Solomon on CBC Power and Politics discussing Canadian charities and political activities.  Other guests included Marlo Raynolds (former Executive Director of the Pembina Institute) and John Bennett of Sierra Club Canada.

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February 05, 2014

Charity Commission responds vigorously to UK Public Accountants Committee criticism

The UK Public Accounts Committee (PAC) has issued reports on the Charities Commission and UK tax authorities (HMRC) and their handling of regulatory matters.  The Charities Commission has put out a press release with a very solid response to the Public Accounts Committee.  I agree with most of the points of the Commission.  The only one thing that I would concur with the PAC is that the investigation into Cup Trust was probably “feeble”.  But as I have blogged before (here and here and here and here and here), The Cup Trust is one charity and many other regulators have let a lot more bad apples stay in the barrel than the Charities Commission.

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February 04, 2014

Federal Court of Appeal judgment relating to Allen Berg and donation to Cheder Chabad

Mr. Berg made a ‘donation’ to a registered charity, Cheder Chabad, and the registration of that charity has subsequently been revoked.  The Allen Berg case is important because it discusses “donative intent” and the Friedberg decision.  It upholds Marechaux and Kossow.  The FCA overturned a Tax Court of Canada decision in which the TCC had said that for the cash portion of Mr. Berg’s ‘donation’ he was entitled to a tax credit.  The Court concluded with respect to donative intent “...Mr. Berg did not intend to impoverish himself by transferring the timeshare units to Cheder Chabad. On the contrary, he intended to enrich himself by making use of falsely inflated charitable gift receipts to profit from inflated tax credit claims. He consummated the “deal” solely with that objective, and he acted from beginning to end in a manner intended to achieve that result.”

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January 29, 2014

Cheder Chabad is revoked on January 18, 2014

Last year the Federal Court of Appeal in Cheder Chabad v. The Queen, ordered CRA to delay the publication of a notice of intention to revoke the charitable status of the registered charity by four months.  It appears that CRA revoked the charity for cause on January 18, 2014.

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January 29, 2014

CRA clamping down on late T3010 returns and innaccurate information

If you search the CRA Charities Listing under revoked for cause charities it provides a list of Canadian charities that have been revoked for cause.  I noticed recently that Assemblée de Dieu de Montreal-Nord has had its charity status revoked for cause and all the reasons cited in the summary relate to late filing of T3010s and providing inaccurate information.

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January 28, 2014

BCSC Judgment in TLC The Land Conservancy of British Columbia Inc.

The BC Supreme Court recently dealt with a case involving TLC The Land Conservancy of British Columbia Inc. and whether certain assets may be used to satisfy creditors.  TLC is having financial problems and trying to restructure under the Companies’ Creditors Arrangement Act (the “CCAA”).  This case involves whether the property is subject to a special purpose trust.  BC has specific legislation dealing with these type of scenarios. The decision has been released and it will be interesting to see if it is appealed.

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January 28, 2014

CRA letter on Indian Band -Public Body & Function of Government

CRA recently released a letter which discussed whether an Indian Band is a public body performing a function of government within the meaning of 149(1)(c) and therefore exempt from income tax on the interest income received from a GIC. The CRA found that the Indian Band was governed by an elected chief and band council, performed several functions of government and had passed by-laws under section 83 of the Indian Act. As such, it was determined to be a public body performing a function of government in Canada and therefore exempt from paying income tax and any tax on the interest from the GIC included in its income.

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January 28, 2014

CRA letter on taxability of scholarship funds received by employees

CRA recently released a letter which discussed whether scholarship funds received by an employee are taxable as employment income under subsections 5(1) or 6(1) of the Income Tax Act. CRA examined a situation where a registered charity (the “Foundation”) received a donation from an unrelated person (the “Donor”). The purpose of the Foundation was to raise and maintain funds for an organization and under the terms of the donation agreement between the Foundation and the Donor, the Foundation created a scholarship for employees of the organization pursuing post-graduate degrees in specific areas of study.

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January 28, 2014

CRA news release - Tax preparer and charity director convicted of fraud

On January 10, 2014 David Ajise, a former tax preparer operating in Toronto, was sentenced to a 30 month jail term for fraud over $5,000. Ajise is the former proprietor of Datronix Solutions, a tax preparation service. A CRA investigation revealed that, Ajise and Eto Ekpenyong Eto participated in a scheme which generated $5,023,456 in fraudulent charitable donations between 2003-2005. 

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January 28, 2014

CRA letter - Is a member a shareholder of a not-for-profit corporation

CRA released a letter which discusses whether a member of a not-for-profit corporation without share capital is a “shareholder” within the meaning of that term in subsection 248(1) for purposes of subsection 15(1) of the Income Tax Act. CRA’s view was that members of a non-profit corporation without share capital, in this case a family recreational club, will be considered shareholders thereof for purposes of subsection 15(1) of the Act, notwithstanding that they are not entitled to receive dividends.

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January 27, 2014

The Globe and Mail: ‘Forever’ falls out of fashion in charitable giving

The Globe and Mail recently had an article which discusses the concept of perpetual endowments as well as the use of donor advised funds and bequests. Read article >

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January 27, 2014

Which Canadian Registered Charities Received the Most Money from Municipal Governments in 2012?

We recently reviewed the T3010 information for 2012.  We looked at government funding and specifically which Canadian registered charities received the most funds from municipal governments. Please review my caveats at the end about the reliability and usage of T3010 information.

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January 11, 2014

Which Canadian Registered Charities Received the Most Money from Provincial Governments in 2012?

We recently looked at government funding and specifically which Canadian registered charities received the most funds from provincial governments in 2012.  Most government funding is from the provincial level of government and therefore provincial funding is vital for the Canadian charity sector.

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January 11, 2014

Did the University of Windsor spend $285 million on political activities in 2012

Probably not.  Otherwise that would be about 5-10 times more funds than all Canadian registered charities spent on political activities in 2012.  In fact, when we reviewed who spent the most on political activities it appears to me that the top 6 organizations were all mistakes.  Either CRA or the charity messed up when inputting the numbers.  All charities, but especially larger charities, should carefully review their T3010 before filing and also check that the CRA got the information correct a few months after filing.

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January 11, 2014

Shocking CRA press release on Canadian charity gifting tax shelters

The problem of “abusive charity gifting tax schemes” continues.  These are schemes that promise that if you put in say $1000 through a complicated scheme you will end up with a $5000 receipt and therefore you can save $2500 in taxes.  CRA notes that two additional strategies will be used to prevent Canadians from investing in these schemes.  The first is that CRA will not assess tax returns until after the tax shelter scheme has been reviewed.  That means a person who claims tax benefits under one of these schemes and then files a tax return may have to wait a couple years for a refund.  Also as per the 2013 budget CRA can collect 50% of the taxes owing of an amount in dispute.  What is shocking from the press release is apparently over 182,000 taxpayers have participated in these schemes.

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January 05, 2014

CRA releases list of “municipal or public body performing a function of government in Canada”

There is a category of qualified donee, ie. organizations that can issue tax receipts, called “municipal or public body performing a function of government in Canada”.  This group is largely first nations bands but also could include school districts or certain other types of entities.  CRA has just released the list and it contains 60 groups.  Hopefully the number will rise.  It is important for Aboriginal groups that need funding from foundations or wish to issue official donation receipts for gifts consider obtaining this status.  Here is a list of “municipal or public body performing a function of government in Canada”:

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January 04, 2014

Which Charities Received the Most Money from the Federal Government - 2012

I recently compiled a list of which Canadian charities received funds from the Canadian Federal Government.

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January 04, 2014

Largest Gifts from Canadian Charities to other Qualified Donees - 2012

We recently reviewed the 2012 T3010 Registered Charity Information Returns for largest inter charity gifts.  Here is a list of all gifts over $500,000 from the 2012 T3010.

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December 31, 2013

Charity Commission under fire - it is time to stand up for the Charity Commission and move forward

The Charity Commission of England and Wales is under fire over the last few months.  Those who are interested in charity regulation should be paying attention.  The Charity Commission is a beacon for charity regulators and those that want charities to operate at high standards.

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December 22, 2013

Blumbergs 2013 Receipting Kit for Canadian Registered Charities

We have updated the Blumbergs’ 2013 Receipting Kit.

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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.

mark@blumbergs.ca
416.361.1982
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