Ethics and Canadian Charities

April 17, 2014

Toronto Star covers CRA criminal investigation of charity tax shelters

In an article entitled "Canada Revenue Agency expands investigations of tax shelters", Kevin Donovan of the Toronto Star discusses how "As many as 12 charity tax shelter promoters are under criminal investigation for schemes that saw donors contribute millions of dollars in return for charity receipts worth six times as much."

read more

April 10, 2014

Industry Canada changes Federal Corporate Profile Reports to remind non-profits of CNCA continuance

Many Canadian non-profit corporations don't know about the Canada Not-for-profit Corporations Act (“CNCA”) which came into force in 2011 and requires that all existing Canada Corporations Act (CCA) non-profit corporations must transition to the CNCA by October 17, 2014.   Corporations that do not make the transition by the deadline will be assumed to be inactive and will be dissolved by Corporations Canada.  Industry Canada has indicated that the deadline will not be extended and that they will start sending out Notice of Pending Dissolution in October of 2014.  

read more

April 10, 2014

Holst v. The Queen, 2014 TCC 104 -another Tax Court of Canada case on false receipting

In the Holst case the Honourable Justice Judith Woods rejected certain taxpayers alleged donations to a church.  She noted:

read more

March 25, 2014

Johnson v. The Queen, 2014 TCC 84 - another false receipting case

In Johnson v. The Queen the Tax Court of Canada dealt with a case in which Mr. Johnson had made claims in 2002 and 2003 taxation years for donations of $18,550 and $15,500 respectively.

read more

March 24, 2014

Finance releases Legislative Proposals Notice of Ways and Means for February 11, 2014 budget

The Department of Finance has released the "Notice of Ways and Means Motion to implement certain provisions of the budget tabled in Parliament on February 11, 2014 and other measures and Explanatory Notes". Some of the provisions were announced in the Budget such as changes to ecological gifts, cultural property, charity parking, gifts from the Iranian and Syrian government (and agents). 

read more

February 28, 2014

Kérouac v The Queen - municipality in charity scheme cannot safeguard dignity, honour, reputation

Here is an interesting case in which a municipality, that was allegedly involved in a charity scheme, wanted leave to intervene in a Tax Court of Canada matter involving a donor who had made a donation to the municipality. The TCC maintained “The Municipality is in no way subject to a tax assessment related to the one at issue in this appeal and the judgment in this appeal cannot have a financial impact on the Municipality.”

read more

February 27, 2014

Important update from the Charities Directorate’s Director General Cathy Hawara

The Charities Directorate just posted an important message which provides an update on the Charities Directorate activities.  There is discussion of technology, guidances, CNCA, compliance activities but most importantly extensive discussion of political activities.

read more

February 25, 2014

Ofori-Darko vs. The Queen - another disallowed receipting case

In the case of Ofori-Darko the CRA disallowed a claim of about $30,000 over 3 years.  The people who allegedly made the donation appealed to the Tax Court of Canada and the TCC dismissed the appeal on the basis that there was no proof that those amounts had been donated and also because certain technical elements of the receipt were not included.  I am really starting to feel sorry for the TCC judges having to listen to these ridiculous donation cases.  I am also feeling sorry for taxpayers who have to pay for Justice to argue these cases and for the operation of the court system.

read more

February 24, 2014

Charity Commission alert warning charities about Syrian aid convoys and terrorism

The Charity Commission of England and Wales notes that “There is genuine and desperate need for humanitarian assistance to help people affected by the conflict in Syria. UK charities and their partners are playing an important role in the delivery of humanitarian aid to Syria and neighbouring countries.”  However, they discuss how the use of aid convoys has and can be used to facilitate the travel of “foreign fighters” and the resources of the charity can be missapplied to non-charitable purposes.  The Charity Commission provides a number of suggestions which could also be relevant to Canadian charities.  Canadian charities might also find helpful the CRA’s checklist on avoiding involvement with terrorism.

read more

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.

read more

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.

read more

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. 

read more

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.

read more

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.

read more

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.

read more

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.

read more

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.”

read more

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.

read more

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.

read more

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.

read more

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. 

read more

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 >

read more

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.

read more

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.

read more

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.

read more

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

Contact

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
Download vCard

Connect

Locate

Blumberg Segal LLP
Barristers & Solicitors
#1202 - 390 Bay Street
Toronto, Ontario
M5H 2Y2 Canada

Charity Law List

Join Blumbergs' non-profit and charities newsletter
View recent issue: March 2014