What's New from the Charities Directorate of CRA

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.    

read more

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.   

read more

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.

read more

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.   

read more

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.

read more

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.

read more

October 07, 2014

CRA releases updated information on tax shelters

On October 3, 2014, CRA released an updated resource on tax shelter arrangements on the CRA website. This page provides detailed information on what is a tax shelter, provides links to case law dealing with tax shelters, and cautionary steps for individuals considering getting involved in a tax shelter.  

read more

October 07, 2014

CRA letter - approved research institute status

CRA recently released a letter which discusses whether required changes to a research institute's (the 'Institute') Letters Patent (the charitable purposes and the dissolution clause) in order to obtain status as a registered charity will affect the status of the entity as an approved research institute for purposes of clause 37(1)(a)(ii)(B) of the Income Tax Act. CRA held that there were no changes being made to the activities of the Institute so its status as an approved research institute would not be affected. Here is an excerpt from the CRA letter:

read more

October 07, 2014

CRA letter - providing loans to charities

CRA recently released a letter which discusses various issues relating to a non-interest bearing loan provided to a charitable foundation. A taxable Canadian corporation provided a loan to a related Foundation (a Canadian registered charity) which did not carry a stipulated rate of interest. The question was whether the Corporation should charge interest at a prescribed rate to the Foundation. It was found that Section 69(1)(a) of the Income Tax Act may deem the holder to acquire the loan at a cost that is less than the principal amount. Here is an excerpt from the letter:

read more

September 30, 2014

Blumbergs’ Snapshot of the BC Charity Sector 2012

I was asked by a friend in Vancouver to prepare a Blumbergs’ Snapshot of the BC Charity Sector 2012.   Hopefully someone will find it helpful.   

read more

September 22, 2014

CRA Notices to Registered Charities on CCA/CNCA continuance may or may not be accurate

CRA has been sending out numerous notices with respect to the importance of Canada Corporations Act (CCA) corporations continuing to the new Canada Not-for-profit Corporations Act (CNCA).  A number of people have contacted us with respect to the notice.   In some cases the Federal corporations  were established in 2012 or 2013 under the CNCA.   In other words they were never even under the CCA and cannot continue to the CNCA.  Therefore, some of these notices may be sent to corporations that need to make changes, but others may be sent in error.   You can check your status and under which act you are currently under at the Industry Canada website.  It is easy and free.  

read more

September 17, 2014

Webinar “Foreign Activities 101: Introduction to Canadian charities carrying out foreign activities”

I will be delivering a webinar for the Canadian Charity Law Association entitled "Foreign Activities 101: Introduction to Canadian charities carrying out foreign activities".  It is free but you need to register.

Here is a link to the registration page for "Foreign Activities 101: Introduction to Canadian charities carrying out foreign activities".

For other Canadian Charity Law Association webinars see:  http://ow.ly/BCWG0 

September 17, 2014

CRA revokes the charitable registration of the Friends and Skills Connection Centre

The Canada Revenue Agency (CRA) has revoked the charitable registration of the Friends and Skills Connection Centre, a charity based in Etobicoke, Ontario. The revocation was effective as of September 13, 2014. According to CRA, the charity was not maintaining adequate books and records, failed to file an accurate T3010 Return, failed to operate within its charitable mandate, and was conducting serious breaches with respect to its receipting practices. Also, one of the directors of the charity was determined by CRA to be an ineligible individual. Here is an excerpt from the notice of intention to revoke letter issued by CRA:

read more

September 12, 2014

Imoh v. The Queen - another false receipting case

Did Mr. Imoh give charitable donations of 45,000, in cash, to Revival Time Ministries International over 3 years? Did Mr. Bello give $15,000 to the same charity?   This is the crux of the case.  You can read about Revival Time Ministries International's revocation by CRA here.  (As an aside and outside the scope of charity law you can read about allegations of sexual assault here.)   Far from having poor records or no records the charity produced some Canadian bank statements which the charity seemed to prepare for itself.  I did not know that you can prepare your own bank statements but I learn a new thing everyday!  This case really enhanced my understanding of charity law in Canada!

read more

September 06, 2014

Which Canadian Registered Charities Spent Money on “political activities” and how much in 2012

We recently reviewed the T3010 information for 2012.   The database was prepared by the Charities Directorate of CRA in June 2014 and covers about 85,477 charities which is almost all of the 2012 T3010 returns.  Canadian registered charities were required to disclose on the 2012 T3010 “Did the Charity Carry on Political Activities During the Fiscal Year?” (line 2400) and “Enter the Total Amount spent by the Charity on these activities” (line 5000)

read more

September 01, 2014

Finance consults on draft tax legislation on bequests to Canadian charities and trust taxation

Following up on the 2014 Budget, Finance has released draft tax legislation for consultation.  The changes with respect to bequests to registered charities are from Budget 2014, and will allow some greater flexibility for claiming the charitable donations against either the estate or a trust.   This bequest proposal has generally been welcomed.  It will deal with some situations were there is a mismatch between the income a deceased person or their estate has and the amount of gift left to charity.   

read more

August 28, 2014

CRA releases ineligible individual guidance

The CRA yesterday released its guidance on ineligible individuals (CG-024).   The new rules were announced in the 2011 Federal Budget and it is good to see CRA finally providing its guidance on ineligible individuals.

read more

August 28, 2014

Andrew Coyne: “Problem with charities isn’t their politics, it’s their generous tax credit”

Andrew Coyne recently wrote an opinion piece in the National Post in which he supports the idea of eliminating the tax credit for donations to registered charities.   The article is entitled "Problem with charities isn’t their politics, it’s their generous tax credit".  Mr. Coyne is by no means the first person to call for such action.  It is difficult to know whether this is just another opinion piece or if there will be traction with his line of argument.

August 26, 2014

Partial Glimpse at 2013 T3010 Filings Dealing with Political Activities by Canadian Charities

In this article entitled "Partial Glimpse at 2013 T3010 Filings Dealing with Political Activities by Canadian Registered Charities" I discuss the 51,000 Canadian registered charities have had their T3010 for 2013 added to the CRA database so far.   This 51,000 represents about 60% of registered Canadian charities. In a partial glimpse of the 2013 T3010 information about 333 of 51,000 charities reported so far carrying on any political activities during their 2013 fiscal year, whether by volunteer, staff or spending.  A similar number also said they spent money on political activities. 

read more

August 23, 2014

Canadian Registered Charities Recently Revoked by CRA for cause or as a result of audit - 2014

On a number of occasions we have assembled a list of Canadian charities that had lost their registrations for cause.  We have now updated the list to August 2014.  This list contains over 5 years information on charities deregistered as a result of audit, which used to be referred to as “for cause”.  This list does not include registered charities who were revoked for “failure to file” their annual return or asked for voluntary revocation or those that were revoked for the sole reason that they were corporately dissolved.

read more

August 19, 2014

Globe and Mail “Canada Revenue Agency delists foreign charities”

Jeff Gray recently wrote a piece in the Globe and Mail on a quirky category of foreign charities who are given qualified donee status by virtue of being on the "List of registered foreign charitable organizations that have received a gift from Her Majesty in right of Canada".  I have been getting calls from Canadian charities that conduct foreign activities and professional advisors wondering whether this has any impact on them.   The short answer is no.  

read more

August 18, 2014

The CNCA and its impact on Canadian registered charities

As I have noted before I am concerned that many thousands of Federal non-profit corporations have not continued to the new CNCA and at some point after October 17, 2014 they will be dissolved by Industry Canada.  That is a particular problem for registered charities in that CRA will eventually revoke the registered charities status of those charities. 

read more

August 10, 2014

CRA numbers comparing assets and revenues for 2011 to 2012 for the Charity Sector in Canada


I recently received from the Charities Directorate of CRA some charts showing the combined assets and revenues of the Canadian registered charity sector for 2011 and 2012.   A few quick comments:

read more

August 07, 2014

Revocation letters by CRA for charities and political activities - over the last 20 years.

Over the last 20 years CRA has revoked a number of charities for ostensibly being involved in partisan political activities, or exceeding the 10% of resources on political activities, or for having an unstated political purpose.  In light of all the interest in charities and political activities we thought that it would be a good idea to provide a list of CRA letters that I am aware of relating to those revocations.  For those who are interested in the issue of charities and political activities these are important documents.   

read more

August 06, 2014

CRA letter on the application of GST/HST to membership dues

CRA has released a letter which discusses whether GST/HST applies to membership dues. This particular letter involved a non-profit corporation seeking a GST/HST exemption for dues paid by its members. Based on the information provided by the non-profit corporation, CRA concluded that members were receiving a direct benefit as a result of their membership and therefore did not meet the GST/HST exemption criteria set out in section 17 of Part VI of Schedule V.

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: September 2014