It may take a while to know the full story but so far the headlines are “Baptist group accused of child-trafficking in Haiti ” http://www.theglobeandmail.com/news/world/haiti/baptist-group-accused-of-child-trafficking-in-haiti/article1450829/ or “Haiti ‘orphans’ case: Misunderstanding or kidnap?” from the BBC.
A few thoughts:
CRA in its recent consultation on foreign activities provides more explicit guidance on importance of Canadian charities when operating abroad understanding and complying with foreign laws
A.1 Local laws
It is well established that when a charity operates within Canada, it must comply with Canadian laws, including the Act and the common law. However, a charity that carries on activities outside Canada may operate in areas where the legal framework and laws are very different.
While the Income Tax Act does not require that registered charities comply with laws in foreign jurisdictions, being registered in Canada does not exempt a charity from the laws in the jurisdiction where they operate. The CRA strongly suggests that all charities make themselves aware of local laws, and how they are applied, prior to carrying out their charitable programs abroad. Being aware of local laws and their application will help ensure that the public benefit provided by a charity’s activities is not offset by harm that may result to those carrying on the activities, to the charity’s beneficiaries, or to anyone else. For more information on public benefit, please see Policy Statement CPS-024, Guidelines for Registering a Charity: Meeting the Public Benefit Test.
There are a number of complicated issues at stake here. It is very important that CRA is not saying that in order for Canadian charities to be registered as Canadian charities, they must follow foreign laws which would make CRA the enforcer of certain repressive foreign laws. However, a Canadian charity is not exempt from complying with the laws in the jurisdiction in which they operate. Canadian charities that do not comply with foreign laws can face serious criminal and civil penalties. Canadian charities should be first and foremost aware of local laws. Many are not. They simply do not even think of the issue. Perhaps others just assume that the law in a foreign country is probably similar to the law in Canada or perhaps there is no law on a particular point in the foreign country. This “awareness” should take place ideally before operations are started in the foreign country. “Being aware of local laws and their application will help ensure that the public benefit provided by a charity’s activities is not offset by harm that may result to those carrying on the activities, to the charity’s beneficiaries, or to anyone else”. Many Canadian charities operating outside of Canada for a number of reasons probably do more damage than good. This is a very important point often lost on well meaning Canadians who think as long as they are doing something well-meaning that others will benefit from the well meaning initiative. Not only can such thinking cause more damage than good, but also it will undermine the work of other charities or Canadian charities that may be tarred with the same brush.
Here is another story on the situation:
Kidnapping of Haitian children was no act of charity By Eugene Robinson in the Washington Post
Mark Blumberg is a lawyer at Blumberg Segal LLP in Toronto, Ontario. To find out more about legal services that Blumbergs provides to Canadian charities and non-profits please visit http://www.canadiancharitylaw.ca or http://www.globalphilanthropy.ca Mark can be contacted at or at 416-361-1982.
This article is for information purposes only. It is not intended to be legal advice. You should not act or abstain from acting based upon such information without first consulting a legal professional.
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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.