News

November 22, 2014

Humanics Institute v. MNR - refusal to register charity that claims to advance religion

The Federal Court of Appeal recently heard a case dealing with an organization that had applied for charitable status and been denied by the Charities Directorate of CRA.   There were a number of grounds for refusal including that "the plan to build and maintain a sanctuary and sculpture park, would not advance religion or education in the charitable sense." The FCA did not accept the appellant organization's arguments that the decision was "unreasonable, procedurally unfair, and in violation of sections 2(a), 2(b), and 15 of the Canadian Charter of Rights and Freedoms".  

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November 18, 2014

DFATD Call for proposals for $370 in funding for Maternal, Newborn and Child Health

Groups interested in international development and humanitarian assistance may want to review the new call for proposals from the Foreign Affairs, Trade and Development Canada (DFATD).  

For details on the funding see: Partnerships for Strengthening Maternal, Newborn and Child Health: Call for Proposals

Topics: News | Global Giving | CIDA

November 13, 2014

Industry Canada has started sending out notices of dissolution to Federal Non-profits

Industry Canada has started the long and arduous process of notifying corporations under the Canada Corporations Act that have NOT continued to the CNCA that they will be dissolved.  Industry Canada has sent notices of pending dissolution to the CCA corporations.  Industry Canada's Monthly Transactions for November include a list of which corporations have received such notices of pending dissolution.

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November 12, 2014

Ford v. Canada -what is “with all due dispatch” when dealing with a CRA reassessment

Ian Ford and Norma Ford appealed a Tax Court of Canada 2014 decision relating to taxation years going back to around 1999 -2001.    The decision notes that "Ian Ford and Norma Ford participated in an art donation program operated by Canadian Art Advisory Services. They purchased pieces of art for a particular price and then donated the art to a charity. For each donation they received a receipt for an amount that exceeded the amount that they paid for the art." Needless to say CRA did not accept the valuation and donation receipts.   CRA assessed the Fords in 2002 and then reassessed them in 2012.  The Fords argued that it was unfair that the reassessment happened so many years after the transaction.  The FCA did not agree.  The interesting part was that the legal arguments the Fords were making would have actually increased their taxes!    

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November 11, 2014

Bill 8, Public Sector and MPP Accountability and Transparency Act, 2014 - Ontario to cap salaries

Here is a copy of Ontario Bill 8, Public Sector and MPP Accountability and Transparency Act, 2014. Of particular concern is the Broader Public Sector Executive Compensation Act, 2014 (the "Act").  According to the act, "The purpose of this Act is to manage executive compensation in the broader public sector by authorizing the establishment of compensation frameworks applicable to designated employers and designated executives."  The act applies to hospitals, boards of education, universities, colleges, other post-secondary institutions, community care access corporations to name a few and also any other board, council, corporation, foundation or organization that is prescribed Ontario government. It does not apply to for-profit corporations. The Act only applies to "designated executives" who make cash compensation of $100,000 or more.  It does not apply to unionized employees.  The Ontario government may provide directives requiring disclosure of salaries, bonuses, incentive plans, allowances, agreements, compensation policies and compensation studies to name but some of the items.  

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November 09, 2014

Ontario Corporations Don’t Need to Wait for the ONCA - Continuing from the OCA to the Federal CNCA

Here is a recent article from Mark Blumberg and Kate Robertson entitled Ontario Corporations Don't Need to Wait for the ONCA - Continuing from the OCA to Federal Jurisdiction.  For many Ontario corporations who don't want to wait for the ONCA which may or may not come into force in 2016, or want to carry out governace changes now, a continuance from Ontario to Federal may be an appealing option.

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November 08, 2014

Carleton’s Master of Philanthropy and Nonprofit Leadership (MPNL) -apply for 2015

Carleton has a very interesting program that seeks to increase understanding of the non-profit and charitable sector. The Masters in Philanthropy and Nonprofit Leadership (MPNL) is accepting applications for Summer 2015.  The deadline to apply is January 15, 2015.  I have been fortunate to be on an advisory committee for the MPNL and it is wonderful to see the program taking off.   

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Topics: News

November 06, 2014

CRA provides information on Sponsorships and GST/HST

CRA recently released some information with respect to GST/HST and sponsorships in issue No. 93 of Excise and GST/HST News. 

We have included the CRA excerpt on sponsorships below:

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November 06, 2014

CRA letter on qualifying as a public body performing a function of government

CRA recently released a letter which discusses whether a council that represents different Bands in a unified manner on certain Aboriginal title and rights matters qualifies as a 'public body performing a function of government'. CRA determined that the Council would be considered a public body performing a function of government in Canada within the meaning of paragraph 149 (1) (c) of the Act and therefore no tax would be payable by the Council on receipt of funds from a trust.

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November 06, 2014

CRA letter on tax exemption of income allocated to a First Nation from a limited partnership

CRA recently released a letter which discussed whether income allocated to a First Nation from a limited partnership is exempt from tax because the First Nation is a public body performing a function of government. 

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October 31, 2014

Industry Canada updates their FAQ’s on CNCA continuances

Industry Canada has updated their "Frequently Asked Questions" with respect to the CNCA Continuance process to provide some useful information to the public on what will happen to corporations still under the CCA now that the continuance deadline of October 17th has passed. 

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October 29, 2014

Industry Canada provides notice of delays in processing corporate documents

If you are submitting corporate documents to Industry Canada then expect delays in processing.   What might have been a 1 week turnaround for a continuance may now be 2 weeks.   This delay is caused by a large number of last minute continuance filings.   However, if you have not filed your continuance documents do not despair - see our note here.

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October 28, 2014

Blumbergs’ Ontario Charity Sector Snapshot 2012

Here is the Blumbergs' Ontario Charity Sector Snapshot 2012.   For those who are interested in the size and scope of the Ontario registered charity sector you may find it interesting.   We have taken a subset of the 2012 T3010 data to look at only registered charities based in Ontario.

October 27, 2014

Julie Guindon v. Her Majesty the Queen to be heard in December 2014 by SCC

The Supreme Court will be hearing the Guindon case in December.  The case deals with the constitutionality of certain penalties that are provided for in the Income Tax Act (Canada).  We have discussed the case in an earlier blog posting.  It will be interesting to see what the Supreme Court of Canada decides in this matter.   Apparently only about 50 such penalties have been imposed by CRA over the last decade but the ability to impose penalties is significant. 

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October 27, 2014

CRA letter on agencies and boards being considered a ‘municipality’ or ‘public body’

CRA recently released a letter which discusses whether certain agencies and boards are considered municipalities or municipal or public bodies performing a function of government and therefore exempt from income tax under paragraph 149(1)(c) of the Income Tax Act  (the “Act”). CRA indicated that it was unlikely that the agencies or boards being inquired about would meet the criteria to be considered a municipal or public body performing a function of government.

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October 27, 2014

CRA letter on tax exemptions for fundraising event

CRA recently released a letter which discusses various issues relating to an inquiry as to whether income from a fundraising event would be exempt from tax as a non-profit organization under paragraph 149(1)(l) of the Income Tax Act (the “Act”). CRA had the following comments:

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October 27, 2014

Recent Ontario Court of Appeal decision -Pankerichan v. Djokic

The Ontario Court of Appeal recently released a decision, Pankerichan v. Djokic, 2014 ONCA 709, regarding a dispute over the control of church property held in trust under the Religious Organizations' Lands Act or ROLA.  If you are involved in an unincorporated church or religious institution in Ontario you might find this case interesting.   

To access the full decision, please click here.

October 27, 2014

The Commissioner of Competition v. The Toronto Real Estate Board -non-profit abuse of market power

It is common to have a non-profit organization whose members are various business delivering a product or service.  For example, real estate agents, mortgage brokers, and others.   In a recent case the Commissioner of Competition v. The Toronto Real Estate Board the Federal Court of Appeal held that the abuse of dominance provisions in the Competition Act are not limited to competitors in a relevant market. Trade associations, large suppliers or customers and other persons with market power can also be found to be engaging in anti-competitive acts, notwithstanding the fact that they do not compete in the relevant market. Persons with influence or control over a market should be careful that their actions do not result in anti-competitive acts that are predatory, exclusionary or disciplinary.

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Topics: News

October 26, 2014

Pre-budget consultations for 2015 budget - a number of submissions relate to charities and NPOs

Blumbergs has provided a submission to the Finance Committee (FINA) entitled Canadians want non-profit transparency and effective charities.

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October 24, 2014

CRA adds “Bill, Hillary & Chelsea Clinton Foundation” to list of Canadian qualified donees

Recently the Globe and Mail had a story entitled  “Canada Revenue Agency delists foreign charities”.   CRA has recently added the Bill, Hillary & Chelsea Clinton Foundation to the "List of registered foreign charitable organizations that have received a gift from Her Majesty in right of Canada".  So we have gone from no foreign charities on the list to one foreign charity on the list.   The qualified donee status is effective from 2013-11-07 to 2015-11-07.  Canadian donors can gift funds to the Bill, Hillary & Chelsea Clinton Foundation and receive an official donation receipt.  Furthermore, Canadian charities can make gifts to the Bill, Hillary & Chelsea Clinton Foundation.    

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October 22, 2014

Terrorist attack in Ottawa - reminder to charities to be vigilant about terrorist abuse

The recent terrorist attacks in Quebec and Ottawa are a reminder of the impact of terrorism.   Canadian charities are an important part of Canadian society and it is important that they protect their employees, volunteers, and other resources from terrorist abuse.   

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October 18, 2014

Charity revoked for issuing inflated receipts as part of publicly traded shares scheme

The CRA announced that it has revoked a charity, Skyway Foundation of Canada, for issuing inflated receipts for donations of marketable securities.   In our Receipting Kit we note: "When a donor donates shares on certain stock exchanges, the CRA has “as a general rule, accepted the use of the closing bid price of the share on the date it is received or the mid-point between the high and the low trading prices for the day, whichever provides the best indicator, given the circumstances, of fair market value on normal and active market trading.” In some cases, such as thinly traded shares, this may not be appropriate."  CRA notes in its press release that "During 2008, a private group of taxpayers engaged in transactions designed to artificially inflate the value of publicly traded shares. These shares were subsequently donated to the Organization which, in turn, issued official donation receipts totaling approximately $2.6 million. Subsequent to the donation, in 2009, these shares lost nearly 95% of their value resulting in a substantial loss to the Organization."  it appears that this revocation was for thinly traded shares that were artificially inflated.

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October 17, 2014

Today is October 17 - the Federal non-profit world has not come to an end!

As many of you know on October 17, 2011, the Canada Not-for-profit Corporations Act (CNCA) came into force.  Canadian non-profits under the Canada Corporations Act (CCA) have 3 years to make the transition.  The bad news first - today is the deadline.  The good news is that about 9000 CCA corporations of 19,000 or so have moved over to the CNCA.  About another 1000 are in the pipeline according to Industry Canada and being processed.  The next bit of good news that you should know is that although the deadline for the transition is October 17, 2014, dissolution is not automatic today and in fact Industry Canada will apparently start very slowly dissolving corporations beginning in November and focusing in on corporations who have not filed their corporate returns for many years.   

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October 15, 2014

Some recent T3010 stats from the Charities Directorate on assets and revenues of Canadian charities

Here is some recent T3010 information from the Charities Directorate showing the assets and revenues of Canadian registered charities in 2011 and 2012.  It is in both English and French.

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October 08, 2014

Taxpayers’ Ombudsman releases major report “Donor Beware” on charity gifting tax shelter schemes

I was delighted to read a publication "Donor Beware: Investigation into the sufficiency of the Canada Revenue Agency's warnings about questionable tax shelter schemes".  The special report was prepared in December 2013 by J. Paul Dubé, the Taxpayers' Ombudsman.  The 39 page report rips into charitable gifting tax shelters.  Although it is generally very positive about the work of CRA in trying to educate taxpayers and denying the tax credits it does make some recommendations for CRA to increase educational efforts to donors on the dangers of these schemes.  I was quite pleasantly surprised that there were a number of references to articles I have written or websites that I edit.

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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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