Canadian Charity Law

February 27, 2015

20 Ways We May Be Able To Help You With ONCA By Mark Blumberg

Here is my article 20 Ways We May Be Able To Help You With ONCA.  It sets out some of the items that our law firm can assist Ontario non-profit corporations with when preparing for ONCA.

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February 25, 2015

CRA releases CG-022 Housing and Charitable Registration Guidance

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.  

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February 25, 2015

Arthur v. The Queen - another case in which the TCC rejects receipts and sides with CRA

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."

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February 25, 2015

Industry to provide notices of pending dissolution to all Federal CCA non-profits by September

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.

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February 24, 2015

The easy and quick solution to ONCA for Ontario Non-Profit Corporations

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.   

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February 24, 2015

“Australian ‘Charity’ Fined Record $1.5 Million” for Canadian “fake philanthropic scheme”

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.

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February 21, 2015

CRA letter on public body performing a function of government qualified donee

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. 

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February 21, 2015

Recent decision of the BC Supreme Court in Re Mulgrave School Foundation

The British Columbia Supreme Court recently released a decision, Re Mulgrave School Foundation, which discusses charitable gifts that are made for a specific charitable purpose and whether it is possible to change that purpose. Unfortunately in this case the donors and schools had restricted their gift to be an endowment for scholarships and they did not have in the agreement a power to amend the restrictions.

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February 21, 2015

CRA letter on sale of a clubhouse by a non-profit organization

CRA recently released a letter which discussed various tax implications with respect to the sale of a clubhouse and dining facility being used by the members of a non-profit organization, specifically, whether the capital gain resulting from the sale of the clubhouse would be taxable, and whether the non-profit would have to submit income tax returns or information returns. 

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February 21, 2015

CRA revokes African Computer and Technology Literacy Awareness Program as registered charity

The Canada Revenue Agency has distributed a press release that it has revoked the registration of African Computer and Technology Literacy Awareness Program (ACTLAP) Inc. for involvement with an abusive charity gifting tax scheme.

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February 19, 2015

CRA has minor updates to its Fundraising Guidance to include footnote on Gour decision

The CRA Fundraising Guidance, is CRA's main document dealing with the obligations of registered charities when it comes to fundraising.   The  CRA Fundraising Guidance was initially published in 2009 but then significantly updated on April 20, 2012. At the bottom of each page on the CRA website it notes the last date in which the document was updated.  In the case of the Fundraising Guidance it shows the last update was on June 16, 2014.  I wondered what had been changed.  There appears to be only one important addition - a new footnote to add an Ontario case in which a fundraiser was charged and convicted of fraud.      

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February 17, 2015

French v. The Queen - court rejects bijurilism argument in defining gifts under the ITA

In a recent case French v. The Queen, 2015 TCC 35, the CRA asked that certain arguments related to defining a gift be struck as they had no hope of success. Campbell J. Miller of the Tax Court of Canada agreed with CRA.   The argument made by a group that had invested in an abusive charity gifting tax scheme (Ideas Canada Foundation) relates to bijuralism or that within Canada there are two legal traditions (namely common law and civil law) and that they have slightly different views on a gift and that there was ambiguity in the common law definition and that the civil law definition should be used to interpret what is a gift.. The court concluded that the bijuralism argument is not novel and that it is hopeless.   "I find reliance on Québec laws to interpret common law, when the common law is clear, is not arguable."  TCC continued "I find no basis upon which the Appellants can mount any argument that would extend the civil law definition of gift to the advantage of taxpayers in common law jurisdictions for purposes of the Charitable Donation Tax Credit. Their position with respect to this argument is hopeless."  The TCC found that with respect to the definition of a gift "There is no confusion. There is no ambiguity."   

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February 13, 2015

Enhancing the ONCA Transition for registered charities by reducing redundant charity review

February 13, 2015

CRA letter on Spousal Sharing of Charitable Gifts

CRA recently released a letter with respect to spousal sharing of charitable gifts that was written to David Sherman, one of Canada's top tax lawyers.  As a result of recent legislative amendments in Bill C-43 which received Royal Assent on December 16, 2014, CRA has changed their administrative practice with respect to spousal sharing of charitable gifts with respect to deaths occurring after 2015 (i.e. in 2016 or later).  Bill C-43 included amendments affecting how will and certain designated gifts will be treated for tax purposes for gifts occurring after 2015 and according to CRA this necessitated the change.  The legislative changes affect the taxation of gifts made by will - in some case they will provide greater flexibility but in other cases or situations they may deny certain tax benefits.   

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February 09, 2015

Scheuer v. Canada - an interesting and wonky case against CRA for not sufficiently warning “donors”

Should CRA do a better job of warning Canadians about abusive charity gifting tax schemes?  Well a group of Plaintiffs who participated in the abusive tax shelter gifting scheme Global Learning Group Inc (GLGI) thinks so.   "The Plaintiffs made a claim in negligence in 2011 against Her Majesty the Queen, the Canada Revenue Agency [CRA], and the Attorney General of Canada for the CRA’s alleged breach of its duty of care by failing to properly warn the Plaintiffs in a timely fashion of the consequences that could follow from their participation in the GLGI program."

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February 09, 2015

CRA has new powers to disclose criminal behaviour to law enforcement

According to Canadian Press "The federal revenue agency can now hand the police possible evidence of serious crime — including terrorist activity — that it happens to come across while reviewing taxpayer files. The Canada Revenue Agency gained the little-noticed new authority, which does not require a judicial warrant, through an amendment tucked into the government's most recent omnibus budget bill."   At the moment CRA is largely muzzled when it comes to sharing information - certainly with the public but even confidentially with other departments.  

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February 09, 2015

Globe and Mail article “Think tanks need to show us the money”

The Globe and Mail had an article by Konrad ​Yakabuski questioning the degree of transparency about sources of funding with Canadian registered charities that are "think tanks"

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February 08, 2015

Updated Canadian Registered Charity Legal Checklist by Mark Blumberg

Here is an updated version of the Canadian Charity Legal Checklist.  For those who are interested in reviewing legal compliance for their registered charity they may find the checklist helpful.  

February 03, 2015

CRA letter on distribution of income to members of NPO

CRA recently released a letter discussing various scenarios where an NPO will lose its exemption under par. 149(1)(l) during its wind-up operations. Here is a copy of the full CRA letter.

February 03, 2015

CRA letter on Community Contribution Companies distributing profits to a charitable organization

CRA recently released a letter which discusses whether a Community Contribution Company ("C3") incorporated in the province of British Columbia that elects not to distribute any of its profits to its shareholders, but donates all of the profits to a charitable organization, will qualify for exemption from tax under par. 149(1)(l).  CRA had the following comments:

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February 01, 2015

Fundamentals of Receipting by Canadian Charities

Properly issuing official donation receipts has been challenging for many registered charities.  According to the CRA, 89% of registered charities that are audited are not correctly issuing official donation receipts.  Issuing incorrect receipts can result in revocation or penalties. It is easier to do it right than fix problems later! Here is a new half-day program from Blumbergs entitled "Fundamentals of Receipting by Canadian Charities".

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February 01, 2015

CRA proposes annulment of Dying with Dignity Canada’s charitable registration

The CRA has recently proposed annulment of the registration of Dying with Dignity Canada (DWD), a Canadian registered charity.   In terms of full disclosure I am a legal counsel to DWD.   Here is a note from DWD and a statement from DWD.  

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February 01, 2015

Presentation by Cathy Hawara of the Charities Directorate of CRA

Here is a copy of the slides of a presentation made by Cathy Hawara, Director General of the Charities Directorate of CRA, to the PFC conference in October 2014.  It covers some interesting material.   

January 30, 2015

CRA releases T3010 Registered Charity Information Return for returns for FYE after Jan 1, 2015

It seems that about every year there is a new T3010 form.   CRA has released the T3010 Registered Charity Information Return for returns for fiscal year ends after Jan 1, 2015.

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January 29, 2015

CRA Corporate Business Plan sheds light on Charities Directorate

The CRA Corporate Business Plan discusses CRA plans. It provides some interesting information on the Charities Directorate.  Here are some of the highlights:

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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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