What's New from the Charities Directorate of CRA
September 27, 2016
The CRA today launched its political activity consultation. It reinforces the importance of charities being engaged in the political process. The CRA is looking for feedback on the rules and CRA's guidance. People or organizations have until November 25, 2016 to provide comments.
September 27, 2016
The Canadian Charity Law Association is delivering some upcoming webinars. Registration is free but space is limited.
September 26, 2016
The CRA has issued a media advisory that the "Honourable Diane Lebouthillier, Minister of National Revenue, will launch public consultations to clarify the rules regarding the involvement of registered charities in political activities." She will make the announcement tomorrow, Tuesday, September 27, 2016 in Ottawa. This consultation will give the public an opportunity to express their views on charities and political activities.
We have provided a large amount of documents and analysis on the issue of charities and political activities in our political activity directory. We will be helping various organizations with their discussions and submissions on this important topic.
September 24, 2016
We recently obtained a copy of the CRA analysis of charities that disclosed on the T3010 they did political activities. In a note from Bryan McLean, Director of Policy, Planning and Legislation Division of CRA to Cathy Hawara the then current Director General of the Charities Directorate, Mr. McLean includes a summary of the percentage of Canadian charities that identified on the T3010 that they conducted political activities and also the names of those charities.
September 20, 2016
The work that charities do is extremely important to our society, so it is vital that various stakeholders, such as the public, the media, the government, donors, employees, boards, donors and others. have access to key information on what the charity is doing and how it is doing it. In general transparency will ultimately increase public trust and confidence in the sector by making the public more informed about the work of charities and making it more difficult for people to misuse charities. However, from a legal perspective registered charities have few requirements in terms of transparency. Registered charities must file a T3010 Registered Charity Information Return with a financial statement and various schedules with the CRA every year.
September 15, 2016
The Liberal Government has made some noises about modernizing charity law. Who could be opposed to modernization? As there is no idea as to what "modernization" means, it has opened up all sorts of calls for changes to charity law in Canada - many of the ideas would be expensive, counterproductive, stifling, or ultimately destroy the positive reputation of the charity sector. Wikipedia defines a Pandora's box as "a process that generates many complicated problems as the result of unwise interference in something." Although only time will tell, it appears that "modernizing charity law" has a small upside and a very large downside.
September 10, 2016
Here is a copy of the CRA Compliance Framework for Files with Identified Political Activities from the Charities Directorate of the CRA. It is dated October 9, 2012. It provides some answers to some of the questions around how were charities identified for audit. Next week we will post a follow up document namely the "Assessment of Charities Directorate Political Activities Audit Program against October 2012 Compliance Framework".
September 07, 2016
Here is a copy of a CRA Powerpoint presentation slide deck on the Regulation of Charities - Overview - September 2014. It provides some useful information including the CRA's audit plan. For example, the audit plan shows that CRA planned on auditing in 2014/15 32 registered Canadian amateur athletic associations (RCAAAs). That is a pretty large number as there are only 119 RCAAAs in total. Political activity audits in that same period only accounted for 2% of CRA audits. Only 4% of charities audited resulted in CRA issuing an notice of intention to revoke.
September 07, 2016
In the notes section of a CRA presentation "Regulation of Charities - Overview" the CRA notes that in 2012 the amount of receipts issued was $14.28 Billion and that "the federal assistance for charitable donations in 2012 exceeded $2.9 ... Individuals also claimed over $1 billion in provincial and territorial tax credits billion". Therefore the cost of having a tax subsidy just for donations to registered charities is almost $4 Billion.
September 04, 2016
We have uploaded a copy of the "secret" CRA Ministerial Transition Briefing Binder provided to the new Minister of Revenue Diane Lebouthillier in November 2015. It was obtained pursuant to access to information. It covers the mundane matters such as roles and responsibilities and an introduction/overview to the CRA and goes on to discuss top issues that the CRA has to deal with including the "tax gap", FACTA, BC and Ontario housing market, charities and political activities, international collaboration on tax avoidance etc. The document as a whole provides a good civics lesson and context from the CRA perspective as to the role and responsibilities the CRA which is an important agency within the Federal government. It is searchable if you are looking for something in particular. Over the next couple of months I will try to release every Saturday another CRA document on our website.
August 17, 2016
In a 44 page cost decision Pizzitelli J. discusses how much costs should be given to CRA (the Respondent) with respect to the abusive charity gifting tax scheme, GLGI, that he had previously provided a judgment in. The hearings on the case were over 25 days - certainly quite a thorough vetting of the issues. You can read the full GLGI cost decision here. Pizzitelli J. notes:
"While I appreciate the Promoter may bear the direct responsibility for the sham it has perpetrated on the Appellants and the Canadian public at large and benefited to the extent of millions of dollars in cash contributions, the Appellants and Bound Appellants did blindly or willingly jump on the Program train in expectation of receiving a net cash advantage from their donation. As I indicated in paragraph 88 of my Reasons in this matter: ..When otherwise good people turn a blind eye to the obvious reality surrounding them, they cannot lay blame on others for the consequences that follow from the fraud or sham of others. They certainly should not expect the Canadian public to fund their losses. Accordingly, I am not prepared to limit liability for costs solely to the Promoter as requested by the Appellants and Bound Appellants."
August 12, 2016
The CBC recently wrote an article entitled “Iris Kirby House fundraising foundation refiles public charity disclosure documents to fix errors”. The article covered a registered charity and the mistakes in its T3010 Registered Charity Information Return filings. It is not often that such a lengthy article is written on a charity and inaccurate financial statements/T3010 filings that I thought I should blog about it. I am only focusing here on the T3010 problems and the response of the charity to the T3010 problems, and not any of the other substantive allegations by supporters or detractors of the charity.
August 12, 2016
The Charity Commission of England and Wales has recently released a draft guidance on the types of controls English charities should be using when providing grants to non-English charities.
August 05, 2016
The Charities Directorate of the Canada Revenue Agency ('CRA') recently developed an infographic to help charities remember their T3010 filing deadlines. CRA is in the process of introducing new and different ways to encourage voluntary compliance for Canadian registered charities. The T3010 is an annual filing that must be completed annually by registered charities within six months of the charity's fiscal year end.
July 29, 2016
In May 2016 we found out that Cathy Hawara, the Director General of the Charities Directorate, had received a promotion and become the Deputy Assistant Commissioner of the Legislative Policy and Regulatory Affairs Branch of the CRA. Cathy had been Director General of the Charities Directorate for approximately six years.
July 28, 2016
The Canada Revenue Agency ('CRA') has recently released a new online questionnaire which is designed to provide the general public with basic knowledge to help make an informed decision when deciding whether or not to apply for charitable registration.
July 27, 2016
The Blumbergs' Canadian Charity Law Institute 2016 will be held on Friday October 28, 2016 at Oakham House in Toronto. The Institute always has a full day of speakers discussing legal and ethical issues affecting Canadian non-profits and charities. The tentative presentation topics are listed below.
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
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