Canadian Charity Law List
December 2012

UPCOMIMG PRESENTATIONS

Blumbergs’ Canadian Charity Law Boot Camp - April 18, 2013 – a one day primer on compliance and governance for Canadian charities.  www.globalphilanthropy.ca

On April 18, 2013 we will have the first Blumbergs’ Charity Law Boot Camp in Toronto.  It will be a one day boot camp on compliance and standards issues for Canadian charities led by charity lawyer Mark Blumberg.

The Ministry of Consumer Services’ has added some information to their website on the Not-for-Profit Corporations Act, 2010 including a glossary of key terms, an FAQ and a basic transition checklist.  There is more information that is yet to come such as the regulations, a revised non-profit incorporators handbook etc.

In late November I was involved with 2 events in which members of the Charities Directorate spoke on the subject of political activities.  Here is a large amount of new information from CRA on charities and political activities.

CRA has releasted its guidance on “Arts Activities and Charitable Registration Guidance” (CG-018).  CRA had conducted an earlier consultation on arts and charity registration and this is the final version, which will be of interest to charities who are involved with arts.

The Canadian Government has reminded Canadians to be careful when donating to charities, especially when the donation is part of a scheme offering more tax incentives than the cash contributions.  If you are interested in more details on how to find good charities and avoid charity scams check out http://www.smartgiving.ca

Doug Donovan and Caroline Preston in the Chronicle of Philanthropy have written another article on inflated gift in kind valuations.  Here is an interesting quote “Accounting principles may be applied differently by different groups to similar facts, but at some point this matter of how in-kind contributions are valued becomes much more significant than mere reasonable differences of interpretation among nonprofit accountants,” Mr. Tighe said in an e-mail. “It goes to the matter of public trust.”

We recently reviewed the private foundations contained on the T3010 Registered Charity Information Return for 2011. In this case we looked at the approximately 500 private foundations on the database who had the greatest total expenditures according to their T3010 filings.  There are some interesting surprises on the list.

We recently reviewed the T3010 information for 2011 relating to foreign activities and specifically who is spending the most abroad.

We recently reviewed the T3010 information for 2011 relating to Canadian charities and political activities.  Here is a list of the top spenders on political activities according to T3010 filings. 

Finance recently published a press release on the phasing out of the penny and how this relates to charities. 

CRA recently released a letter dealing with whether an organization under section 149(1)(l) of the Income Tax Act can pay surplus out to its members. In this case, a non-profit organization was providing internet services to its members.

The CRA has released a letter providing general comments on the measures enacted in the 2011 federal budget with respect to the donation of flow-through shares.

Recently CRA released a letter dealing with whether a communal corporation qualified for tax exemption pursuant to section 149(1)(k) of the Income Tax Act. This provision provides an exemption from income if a person is a ‘labour organization or society or a benevolent or fraternal benefit society or order.’

Here is a press release from the CRA revoking New Flame Deliverance Ministries.  The CRA alleges that New Flame Deliverance Ministries issued inappropriate receipts.  It is a reminder that charities need to be careful how they receipt. 

Here are some recent revocation letters from CRA in which the Charities Directorate explains why they revoked certain charities for cause.

Here is a copy of the letters from the Canada Revenue Agency in relation to the revocation of the charitable status of Glooscap Heritage Society.

The CRA recently posted an article on its website with some useful information regarding promoters of tax evasion schemes. CRA points out that it is increasing its efforts to audit and prosecute promoters of tax evasion schemes.

Here is a recent Tax Court of Canada decision dealing with a particular donor and a donation arrangement.  The arrangement involved the donation of cash and time share units.  The charity Cheder Chabad provided a receipt for $2,420,000.00 for 2002 and $1,786,000.00 for 2003.  The TCC dealt with the issue of donative intent and found that there was donative intent only on the cash portion in this particular case and reduced the value of the receipts by almost 90%.

William Shawcross, the new Chair of the Charity Commission of England and Wales, delivered a speech to the ACEVO Annual Conference.  The speech touches on a number of important issues including charities and political activities, public benefit, involvement of monarchy with charities, the importance of religious charities and the importance of good governance at charities.

The Canadian Bar Association PracticeLink Solo and Small Firm Bulletin has sent a note to its members “Tis the season: CRA warns about gifting tax shelter schemes. Whether you approach them as a lawyer or as a tax-payer, gifting tax shelter schemes are bad news, the Canada Revenue Agency warns. How do you tell a rip-off from a write-off? If it looks too good to be true, it probably is.”

Canadians in late November and December each year really focus on charitable donations.  Here is a microsite I worked on to help Canadians understand how to thoughtfully select charities to donate to.  http://www.smartgiving.ca

On December 14th, 2012, the Supreme Court of Canada delivered its ruling in the case of R. v. Khawaja, 2012 SCC 69.  Much of this case centered on whether the Criminal Code of Canada definition of “terrorist activity” was constitutional.  According to s. 83.01(1) of the Criminal Code, a “terrorist activity” is an act or omission committed in whole or in part “for a political, religious or ideological purpose, objective or cause”.  Some in the legal community had suggested that this definition of terrorism was unconstitutional.  Nevertheless, all seven Supreme Court justices who heard R. v. Khawaja held that the Criminal Code definition of terrorism was constitutional.