Here is an agenda for the Blumbergs' Charity Law Institute 2015. You can register here.
Here is an agenda for the Blumbergs' Charity Law Institute 2015. You can register here.
Mark Blumberg will be team teaching, with Valerie Campbell and Sharilyn Hale, the Humber Fundraising Management Course "Ethical and Legal Issues". It was previously taught by Ken Wyman so we will have big shoes to fill.
The CRA has posted an "Advisory on partisan political activities" as a reminder to Canadian registered charities that they must avoid all partisan political activities, although they are allowed to conduct certain political activities related to their objects and within in certain resource limitations.
In the recent Supreme Court of Canada decision Guindon v. Canada - 2015 SCC 41 the SCC has upheld the third party civil penalties provided under the Income Tax Act.
The CRA has revoked the Canadian Friends of Pearl Children for involvement with what CRA would term an abusive charity gifting tax scheme.
In Duggan v. The Queen, 2015 TCC 175 (CanLII), the appellant appealed the Minister's previous assessments which denied charitable credits that the appellant claimed in their 2007 and 2008 taxation years, with respect to charitable donations that were allegedly made.
On March 26, 2015, Rick Stewart, Assistant Commissioner, Legislative Policy and Regulatory Affairs Branch, of the Canada Revenue Agency, made a presentation to the Finance Committee on terrorism.
Here is an article entitled Canadian Charities Conducting International Activities (2015). It will be of interest to Canadian charities that are, or considering, operating outside of Canada.
Over 5000 Canadian registered charities operate outside of Canada and they cumulatively spend around $3 billion per year on foreign activities. The Fundamentals of International Activities by Canadian Registered Charities is a 1/2 day presentation with charity lawyer Mark Blumberg which discusses international activities by Canadian charities and related regulatory issues. The first Fundamentals of International Activities by Canadian Registered Charities will be held on Tuesday September 22, 2015 from 1PM-4PM. Some charities operating abroad are not aware of, or compliant with, their legal requirements and foreign activities has been an area that has been scrutinized by CRA in its audits and can result in revocation of charitable status if the rules are not followed.
The involvement of charities in political activities has been a major story since 2012. The 2012 Federal Budget introduced new reporting requirements for charities for 2013 but does not fundamentally affect the ability of charities to engage in political activities. Significant resources have been provided to the Charities Directorate to audit charities who conduct political activities. On Tuesday September 22, 2015 we will conduct a 1/2 day program from 9AM-12PM entitled Fundamentals of Political Activities by Canadian Registered 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".
Blumbergs will be holding a half-day seminar on May13, 2015, Fundamentals of Employment Law for Charities and Non-Profits from 9AM-12PM.
We have blogged about the CRA Program Update 2015 separately but wanted to focus here on what the update provides in terms of information on the political activity audits of CRA's Charities Directorate. CRA should be commended for publishing a program update. I am certainly not aware of any regulatory requirement that they need to, but the program update does provide useful information for the charity sector. In the program update you have to read pretty far into the 5000 word document to see the "Charities and Political Activities" update but it is important so we have created a separate blog post.
We prepared an article on the largest Canadian charity employers. The article is entitled "Largest Canadian Registered Charities by Employment Compensation"
The CRTC issued its first CASL violation to Compu-Finder for four alleged violations occurring between July 2, 2014 and September 16, 2014. A penalty of $1.1 million dollars was imposed by the CRTC and Compu-Finder will have 30 days to submit written representations to the CRTC or pay the penalty. The alleged violations relate to commercial electronic messages sent by Compu-Finder without a recipient’s consent and without properly functioning unsubscribe mechanisms. According to the Spam Reporting Centre, complaints against Compu-Finder accounted for 26% of all complaints submitted in its industry sector.
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."
The Australian 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.
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.
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."
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.
A few years back the Australian government set up the Australian Charities and Not-For-Profit Commission (ACNC). Then a new government came into power and decided that having the ACNC was just red tape and that it should be abolished. Thankfully that new government has done some reconsidering. Here is an article from Pro Bono Australia http://shar.es/1oiJBZ
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"
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.
On February 11, 2015, I will be delivering a webinar for the Ontario Nonprofit Network (ONN) entitled "Advocacy and Political Activities: Busting myths and misconceptions!"
I received an email from Marni Soupcoff of the Canadian Constitution Foundation. She discusses the narrative that supposedly no "right-leaning" groups are being audited for political activities. I thought I would share it.
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
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.