Canadian Charity Law List
February 2013

UPCOMING 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.  Delighted to have 50 people already signed up to the program.  

Here is my article on the new Ontario Not-for-Profit Corporations Act ("ONCA") that I prepared for the Ontario Trillium Foundation blog.

I have been concerned that it is not easy for people interested in the Ontario non-profit and charity sector to obtain information on Ontario non-profit corporations.  With the Federal government the information is available online and free to the public.  I recently received an e-mail from the Ontario government, in response to my repeated requests to be provided with a list of Ontario corporations, that as of July 1, 2013, or whenever the implementation date of the ONCA is, the public will be able to freely search a database available on the internet with basic information on every Ontario non-profit corporation. 

The House of Commons Standing Committee on Finance (FINA) released its much anticipated report on Tax Incentives for Charitable Giving in Canada.   The report discuss "Charitable Donations and Donors in Canada", "The Regulation of Charities", "Tax Incentives and their Estimated Federal Fiscal Cost"  as well as specific proposals such as changes in tax credit rates and changes in donations of private shares and real property.  There are also discussions of bequests and tax fairness as well as transparency and accountability of charities.

For many Canadian non-profits under the CNCA it is easier to file the annual return online.  This can now be done at the Industry Canada’s Online Filing Centre.
 

The Hamilton Spectator in an article entitled “Redeemer settles $6-million lawsuit with families” is reporting that Redeemer University College has made a payout to settle a lawsuit over receipts it issued as part of a forgivable loan program.
 

The Times of London in the UK disclosed that The Cup Trust, one of Britain’s largest charities is a front for massive tax avoidance. Wealthy individuals have donated large sums to the Cup Trust to get Gift Aid tax relief and then have received the vast majority of their money back.

The Charity Commission of England and Wales has put out a statement on a major scheme involving UK Gift Aid.  In Canada, we have had “abusive charity gifting tax schemes” that over the last decade have issued over $6 billion in tax receipts, however under s. 241 of our Income Tax Act (Canada), the Charities Directorate of CRA is prohibited from commenting on a perceived massive abuse of the system by a registered charity until after such charity has lost its registered status (which could take 5-10 years in some cases).  In the UK their charity regulator is permitted to warn the public.

I missed this article by Vancouver Sun columnist David Baines last summer entitled "Baines: Couple who cheated tax department suffer litany of woes: Chartered accountant Martin Johnson and estranged wife Celia Martin failed to declare fees earned on art donation".  The story talks about some of those involved with a donation to a major Toronto university.

In Sklodowski the Tax Court of Canada has denied more charitable donation receipts because they did not have all the mandatory elements.  The judge also was concerned that the cash "donations" may never have in fact taken place.

Vancouver Sun investigative reporter David Baines has just written a follow-up article entitled "Vancouver museum's "Michelangelo" sculptures fail to sell at auction".  In this article he discusses how the valuations of the sculptures purportedly exaggerated their fair market value and how the Canadian Cultural Property Export Review Board validated the inflated figures. 

The T3010 is a great resource on the Canadian charity sector.  We recently reviewed the T3010 Registered Charity Information Return database for 2011 as part of the Sean Blumberg Transparency Project.  The database covers 82,848 of the approximately 86,000 registered charities that had filed their T3010 and were processed into the CRA’s Charity Listing database by November 2012.

Here is an important article in the Chronicle of Philanthropy outlining an initiative to try and have charities electronically file their annual returns in the US and have this information more easily accessible online at no charge. 

Here are comments from the Association of Fundraising Professionals on the Private Members Bill of Mr. Peter Braid, MP from Kitchener-Waterloo.  The AFP expresses some concern about the part of the Bill which would change the deadline for donations to charities from the end of December to the end of February. 

It is actually quite hard to find out how to get on the CRA newsletter (EML) list.  In my opinion, our firm's charity law newsletter is far better than the CRA newsletter - our newsletter has all the info from CRA and a whole lot more.  Plus our newsletter has elements of comedy.  The CRA newsletter does not have any intentional comedy! 

Here is an interesting article entitled “Watchdog Cracks Down on Misleading Statements on Fundraising Costs”.
 

The Charities Directorate has just published a new page which sets out how members of the public can obtain information about registered charities.

In this article entitled “Atheist Activist Group Sues IRS Over ‘Preferential Treatment of Churches’” in the Christian News Network it discusses the exemption that churches have to filing the US form 990 and how one group is challenging that preferential treatment. 

The Charities Directorate of the Canada Revenue Agency has announced the revocation of The Voice of the Cerebral Palsied of Greater Vancouver as a charity for allegedly high fundraising costs while using a third party fundraiser. 

In an interesting coincidence the US Congress published a report on February 11, 2013 on the “Present Law and Background relating to the Federal Tax Treatment of Charitable Contributions”.  This was the same day as the Canadian Finance Committee of the House of Commons published a similar report on Canadian donation incentives. 

CRA recently released a letter which provided comments on the rules relating to the voluntary gifting of property to a registered charity and whether a qualified donee is required to issue a donation receipt.

CRA recently released a letter that discussed whether an entity that operates a private high school for the purposes of earning profit qualifies as a non-profit organization. CRA held that the Academy was not operating exclusively for a purpose other than profit.

CRA recently issued a letter on whether an NPO will jeopardize its exemption from tax where it incorporates a Community Contribution Company (C3) to carry on for-profit activities.