The Canadian Charity Law Association is delivering some upcoming webinars. Registration is free but space is limited.
In July 2016 the Income Tax Rulings Directorate of CRA wrote to the Charities Directorate clarifying the procedure for reviewing whether aboriginal bands should be viewed as qualified donees. Very importantly the CRA ITR Directorate concluded "it is our view that all bands created under the Indian Act meet the criteria to be considered municipal or public bodies performing a function of government in Canada for the purpose of paragraph 149(1)(c) of the Act and are therefore exempt from income tax."
In a press release from ESDC entitled "Canadians are invited to share their ideas on the development of a Social Innovation and Social Finance Strategy", the Federal government is doing an online consultation on social innovation and social finance.
We have just released our updated Blumbergs' Receipting Kit 2017. The Blumbergs' Receipting Kit 2017 is for Canadian registered charities and other qualified donees who wish to issue official donation receipts under the Income Tax Act (Canada), which are sometimes referred to as "tax receipts". It has a general description of how receipting should be conducted and then copies of documents and resources from the CRA and elsewhere that relate to receipting.
Mark Blumberg will be delivering two upcoming Chartered Professional Accountants of Ontario (CPA Ontario) charity programs: Charity Fundraising and Receipting Rules - A Primer for Accountants and T3010 and Transparency in the Charitable Sector.
The Ontario government is moving to pass the Cutting Unnecessary Red Tape Act, 2017. The Act does many things but importantly for Ontario non-profits "The proposed amendments would enable the future proclamation of the Not-for-Profit Corporations Act (ONCA). The proposed amendments to the Corporations Act would enable Ontario not-for-profit corporations to benefit from some of the ONCA features prior to its proclamation, such as allowing notice of members' meetings to be sent electronically and members' meetings to be held electronically. These proposed amendments would increase flexibility, encourage participation in meetings, provide clarity and reduce burdens and costs for not-for-profit corporations."
CRA has just published a lengthy page on Personal information of directors, trustees and like officials that discusses how the Charities Directorate uses personal information provided in a charity application and in your registered charity's annual filings.
The CRA has reminded B.C. Societies to make the necessary transition under new B.C. Societies Act by the BC deadline of November 28, 2018 or face dissolution of their society. As CRA notes "If your corporate status is dissolved, you are no longer a legal entity, you will not meet the requirements for charitable registration, and your charitable status could be revoked."
The CRA has published its Guidance CG-028 Head bodies and their internal divisions on September 22, 2017. It discusses what is a head body and what is an internal division and what CRA will require for registration as a charity. This guidance will be helpful not only for charity applications by internal divisions but also for head bodies and internal divisions in clarifying their requirements after registration. This guidance is not relevant to most charity applications where there is a corporation or group that is not an internal division of a registered charity. CRA published another note saying that they will be mailing to all internal divisions separate business numbers so they can access the CRA's My Business Account portal. Such access will be important for charities when they are doing electronic filings, which is anticipated to come into place in October 2018.
The CRA has updated its Guidance CG-014, Community economic development activities and charitable registration to discuss the topic of whether a charity can help small businesses in a disaster and to what extent. As we have had and will continue to have large scale disasters such as flooding and wildfires this guidance may be helpful to some registered charities. The changes were made on August 9, 2017.
Although the CRA has little guidance on internal controls, they are increasingly focusing on internal controls, or the lack thereof, in charities. Internal controls are "a procedure or policy put in place by management to safeguard assets, promote accountability, increase efficiency, and stop fraudulent behavior." A simple example is having two people sign cheques or having two people count cash. I am hoping that one day CRA will provide greater guidance on their expectations surrounding internal controls but for now here are some thoughts and suggestions.
The Canada Revenue Agency recently released its views on when the adjusted cost base of a life insurance policy may be used to determine the cost of a life insurance policy when a life insurance policy is gifted to a qualified donee.
Here is Blumbergs' comments on the Ontario Government Proposal to Allow Compensation of Directors of Charities Without Court Order that were submitted to the Ministry of the Attorney General today.
CRA has been encouraging charities to file their T3010 and now they are trying something new - automated phone calls.
CRA has recently announced that starting in late 2018, registered charities will be able to file their annual Form T3010, Registered Charity Information Return online through the Canada Revenue Agency’s My Business Account (MyBA). Currently the T3010 form must be printed and then mailed into CRA, so we hope that the online filing option will make the annual filing process easier for Canadian registered charities.
We were recently informed by the CRA Charities Directorate that the generic CRA email address previously provided for certain communications with CRA is no longer available. Regular communications with CRA should continue being completed through mail, courier or fax. Our previous blog on this issue is provided below:
CRA has recently released two new videos as part of their Gifting and Receipting video series. These vidoes are as follows: Auctions: when you can issue donation receipts and Auctions: advantage and 80% rule.
You can subscribe to the Blumbergs' Charity Law List here. It is a great way for directors and staff of non-profits and charities to keep on top of developments affecting the non-profit and charity sector.
Here is a recent Charity Village article by Andy Levy-Ajzenkopf entitled Setting a new tone: The newly released report on the political activities of charities. The article discusses The Report of the Consultation Panel on the Political Activities of Charities and we have discussed that report and charities and political activities in general in certain earlier blogs such as here.
The New York Times recently had an article Canada Debates Whether Gift of Leibovitz Photos Is Also a Tax Dodge which discusses a donation of photographs taken by Annie Leibovitz. There was also coverage in the CBC, another CBC and Toronto Star. The story is fascinating as it involves celebrities, tax incentives, valuation, and cultural property all in one.
Global News recently had coverage entitled "Government revokes group’s charity status, audit cites possible funding of Pakistani militants" which discusses two recent revocations of Canadian charities.
The Canada Not-for-profit Corporations Act (“CNCA”) permits a not-for-profit corporation that is incorporated under another act (such as a provincial non-profit act) to continue (import) to the CNCA provided that the other act permits the continuance. This allows a not-for-profit corporation to effectively re-incorporate under the CNCA and be governed by it as though it was incorporated under it. The The Federal government has now made it easier for Ontario corporations to move to Federal jurisdiction by pre-approving Ontario and no longer requiring a legal opinion that the transfer can take place for Ontario corporations. This will be helpful for some of the 50,000 Ontario corporations who may wish to skip ONCA and move directly to the CNCA.
The Canada Revenue Agency's website, which includes the Charities Directorate, will apparently be moving to the new www.canada.ca domain on July 11, 2017. The old CRA pages will remain up during the interim period of the move. Hopefully those visitors who go to pages on the old website will be automatically redirected to the new website.
Corporations Canada of Innovation, Science and Economic Development Canada has been dissolving non-profit corporations that are under the Canada Corporations Act (CCA) but have not continued to the new Canada Not-for-profit Corporations Act ("CNCA"). Corporations Canada has advised me that as of June 13, 2017 there are only 304 remaining CCA non-profit corporations and that they are still processing some transitions.
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
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.