A step forward for charities: Senator tables Bill to reform restrictive rulesEarly last week, Senator Ratna Omidvar tabled Bill S-222, The Effective and Accountable Charities Act (the “Bill”), to break down barriers for Canadian charities working with other organizations, both in Canada and abroad. The Bill, if enacted, will bring age... |
Corporations Canada releases simplified process to extend deadline to call annual meetingNon-profit corporations incorporated federally under the Canada Not-for-Profit Corporations Act (“CNCA”) will benefit from a newly simplified process under which they can apply to extend the deadline for calling and holding their 2020 annual general meeting. CNCA corporations are required... |
Accessing restricted funds amidst the COVID-19 crisisThe COVID-19 pandemic and resulting measures to encourage and enforce social distancing have resulted in a severe economic slowdown that is widely expected to lead to a deep recession, if not worse. This downturn has hit charities hard. Foundations have... |
Best Practices for Membership AssociationsThere are many types of member-based organizations. These include trade and industry associations, community associations, lobbying groups, as well as non-profit social and athletic clubs. While they have many differences, common to each of these entities is a broad membership... |
Recent Court Decisions Address Requirement to Provide Membership ListsTwo recent decisions of the Ontario Superior Court of Justice shed light on how courts will interpret the requirement under corporate legislation to furnish members with a membership list upon request. Under the Ontario Corporations Act, any person may request... |
Ontario Court Rejects Claim for Return of Donation: A Reminder of the Importance of Written Gift AgreementsA recent decision of the Ontario Superior Court of Justice addressed a claim by a donor seeking a return of a charitable donation. The case is a reminder of the critical importance of documenting clearly in writing the terms of... |
News Alert – Finance Releases Proposed Legislative Changes to Political Activities RulesOn Sept 14, 2018, the Department of Finance released draft legislation proposing amendments to the provisions in the Income Tax Act (Canada) (the “Act”) that deal with political activities by registered charities and registered Canadian amateur athletic associations (“RCAAAs”). This draft legislation,... |
Supreme Court of Canada Upholds Decision to Deny Accreditation to Trinity Western University Law SchoolOn June 15, 2018, the Supreme Court of Canada released its much-anticipated decisions in Trinity Western University v. Law Society of Upper Canada (2018 SCC 33) and Law Society of British Columbia v. Trinity Western University (2018 SCC 32). The... |
Charity Checklist: What to do if your charity is auditedThere are over 86,000 registered charities in Canada. Each year, the Canada Revenue Agency Charities Directorate audits approximately 700 of these charities. Some of these audits occur based on random selection, some as a result of targeted reviews of particular... |
Changes Proposed to Expand Scope for Social Investments in OntarioThe Ontario Government recently released draft legislation aimed at various matters under the label of reducing red tape. Contained in that legislation is a substantive change that is very significant for charities in Ontario. This change has the potential of... |
Federal Government Announces Social Innovation Review ProjectThe federal government announced on June 8, 2017 that it is convening a committee to review and develop a strategy to advance social innovation and social finance in Canada. The new group, called the Social Innovation and Social Finance Co-Creation... |
Ontario Superior Court Comments on Director and Officer DutiesA recent decision of the Ontario Superior Court of Justice addresses directors’ duties towards the corporation and its employees. Specifically, the court addressed whether a director or officer’s fiduciary duties extend to protecting an employee from the consequences of that... |
Tax Court Addresses Distinction between Employees and Independent ContractorsA recent decision of the Tax Court of Canada serves as a reminder that charities and non-profit organizations must ensure that they properly distinguish between employees and independent contractors. In Sistema Toronto Academy Inc. v. MNR, the Tax Court of... |
CRA Releases Guidance on Low Cost Housing Corporations for the AgedIn April, CRA released a short guidance, CG-025, which sets out the criteria that must be met by an organization seeking to be recognized as a low cost housing corporation for the aged. Such corporations, provided that they obtain and... |
Tax Treatment of Charitable Donations from Spousal TrustsYour Guide to Charitable Giving and Estate Planning, Spring 2016 Understanding recent changes to estate taxation affects the use of spousal trusts Charities and advisors in the area of gift planning must ensure that they fully understand the rules surrounding donations to registered charities from spousal trusts. These rules have... |
Liberal Government Increases Top Tax Rates and Adjusts the Charitable Tax Credit at the Same Time!On December 7, 2015, the Minister of Finance, Bill Morneau, confirmed the intention of the Liberal Government to move ahead with their proposal to reduce the 22% personal income tax rate to 20.5% to strengthen the middle class. He further... |
New CRA Advisory on Political Activities Focuses on Federal ElectionOn August 21, 2015, the Canada Revenue Agency (“CRA”) published an important notice reminding charities of the rules in the Income Tax Act that prohibit registered charities, and charities’ staff and volunteers in their capacity as representatives of charities, from... |
Third Party Penalties in Income Tax Act Do Not Attract Charter Protection: Supreme Court of Canada Affirms Federal Court of Appeal Decision in Guindon v. CanadaOn July 31, 2015, the Supreme Court of Canada released its decision in Guindon v. Canada. At issue was whether the third party penalties in section 163.2 of the Income Tax Act (the “Act”) amount to criminal sanctions to which... |
CRA Comments on Spousal Sharing of Estate Donation Tax CreditsIn a recent technical interpretation issued on January 27, 2015, CRA commented on the ability of a surviving spouse or common law partner to share donation credits arising from gifts made by the estate of the deceased spouse. CRA commented... |
Ontario Ministry Releases Report on Potential Dual Purpose Corporate LegislationThe Ontario Ministry of Government and Consumer Services has released a long anticipated report on a potential framework for the introduction of a “hybrid” corporate structure in Ontario. Such legislation would be designed to facilitate social enterprise and may be... |
Ontario Government Passes Broader Public Sector Executive Compensation Act, 2014In the November issue of this Newsletter, we reported on Bill 8, the Ontario Broader Public Sector Executive Compensation Act, 2014. This legislation will impose limits on executive compensation for certain organizations in the broader public sector in Ontario, including... |
CRA Comments on Tax Treatment of Fundraising Event Organized by an IndividualA technical interpretation published recently by the CRA addresses the tax treatment of fundraising events organized by individuals. While many of the factual details of the event are redacted from the published document, the technical is nonetheless revealing of certain... |
Proposed Changes to Charitable Gifts by WillTaxes and Wealth Management, Issue 7-4, October 2014 |
CRA Releases Guidance on Ineligible Individual RulesOn August 27, the Canada Revenue Agency (CRA) released CG-024, a Guidance outlining CRA’s interpretation and intended enforcement approach to the rules in the Income Tax Act (Canada) surrounding ineligible individuals. The ineligible individual rules were introduced in the 2011... |
Speech by Director General of the Charities Directorate is Published OnlineAt the 2014 National Charity Law Symposium held on May 23, 2014, Cathy Hawara, the Director General of the CRA Charities Directorate, gave a speech that covered several important topics relating to the Directorate’s constitutional role, institutional structure and approach... |
ONCA Delayed Until 2016The Ontario government has confirmed that the Not-for-Profit Corporations Act (ONCA) is not expected to be in force until 2016. The ONCA was passed by the Ontario Legislature in 2010 and will come into force on a day to be... |
Anti-Spam Law to Come Into Force in One MonthCharities and non-profit organizations should be aware that key portions of Canada’s anti-spam legislation, commonly referred to as “CASL”, will come into force beginning July 1, 2014. This includes the “anti-spam” provisions in the Act that deal with commercial electronic... |
Alberta Societies Act Amended to Permit Continuance by Non-Profit CorporationsThe Legislative Assembly of Alberta recently passed Bill 12, the Statutes Amendment Act, 2014, into law on May 14, 2014. Among other things, Bill 12 amends the Societies Act to permit non-profit corporations incorporated under corporate statutes outside Alberta to... |
New CRA ResourcesThe CRA Charities Directorate has released new resources in 2014 that will be of interest to charities and their donors. New Videos on Political Activities CRA has released three short videos that provide an outline of the rules related to... |
Update on the CNCA Continuance ProcessFor federally incorporated non-profit corporations (both charities and NPOs), the deadline for completing their continuance under the Canada Not-for-Profit Corporations Act (CNCA) is approaching rapidly. The continuance must be completed by October 17, 2014. The consequences of non-filing by this... |
Manitoba repeals The Charities Endorsement ActEffective December 31, 2013, the Manitoba Legislature has repealed The Charities Endorsement Act. This change reduces the regulatory burden on charities engaged in fundraising activities in Manitoba. The Charities Endorsement Act had previously provided that no person or organization could... |
Updating information with government regulators is importantIn November of 2013, the Canada Revenue Agency (CRA) Charities Directorate provided new resources on the process for updating and changing information relating to a charity. This serves as an important reminder to charities that keeping their records up to... |
Canada’s Anti-spam Law (CASL) is coming into force on July 1, 2014 – Some suggestions for compliance preparationOn December 4, 2013, the Government of Canada announced that the anti-spam provisions of Canada’s anti-spam legislation (CASL) will come into force on July 1, 2014. We have reported on developments with CASL in previous issues of this Newsletter. As... |
Saskatchewan introduces bill to govern informal public appealsThe Legislative Assembly of Saskatchewan has recently introduced Bill 105, The Informal Public Appeals Act. The proposed legislation would provide guidance and rules around public appeals for donations to support a particular purpose, whether charitable or otherwise. An example of... |
Finance Committee Releases Public Recommendations for 2014 BudgetThe Standing Committee on Finance has published copies of the recommendations it received from the public as part of its annual Pre-Budget Consultations. In June, the Committee solicited public submissions for items to be included in the 2014 Federal Budget. ... |
CRA Releases New Guidance on the Promotion of Health and Charitable RegistrationOn August 27, 2013 the Canada Revenue Agency (“CRA”) released CG-021, a new Guidance that sets out CRA’s interpretation of the law pertaining to the promotion of health and charitable registration. Both existing health care organizations that are registered as... |
CRA Comments on the Donation of Shares to a Public FoundationIn a recent advanced income tax ruling request, CRA discussed whether the transfer of 100% of the voting common shares of a taxable Canadian corporation to a public foundation resulted in the public foundation acquiring control of the corporation. Under... |
Clergy Residence Deduction – Can it be claimed for two separate residences?In a technical interpretation dated June 4, 2013, CRA commented on whether two members of the clergy who are spouses and maintain separate residences can claim the clergy residence deduction for each residence. The clergy residence deduction allows members of... |
CRA Releases Guidance on Drafting Charitable PurposesOn July 25, 2013, CRA released a new Guidance, CG-019, entitled “How to Draft Purposes for Charitable Registration”. This Guidance updates previously released policy statements on acceptable charitable purposes (or “objects”) and sets out CRA’s recommended approach to drafting charitable... |
Director General of CRA Charities Directorate Discusses Political ActivitiesCRA has published the text of a recent address by Cathy Hawara, the Director General of the CRA Charities Directorate, that was given at the Canadian Bar Association National Charity Law Symposium on May 10, 2013. This address has become... |
Human Resources and Skills Development Canada Releases Report on National Call for Concepts for Social FinanceEarlier this month, Human Resources and Skills Development Canada released a Report on its National Call for Concepts for Social Finance. The Call for Concepts was a public policy consultation initiated by HRSDC in November 2012 seeking public submissions on... |
CRA Comments on NPOs and Community Contribution CompaniesAs reported in previous issues of this Newsletter, Canada is seeing the development of new corporate forms designed specifically to accommodate social enterprise. Legislation in British Columbia has introduced a new form of corporation called the “Community Contribution Company” (“C3”)... |
Tax Treatment of the Provision of Rent-Free Leases to CharityCharities are occasionally offered the opportunity to use the property of another person free of charge. This may include the provision of rent-free office or parking space, or the use of physical resources such as cars or equipment. In some... |
CRA Releases Guidance on Arts Activities and Charitable RegistrationOn December 14, 2012, CRA released Guidance CG-018 Arts Activities and Charitable Registration. The Guidance replaces CRA’s former published policy statements on arts and charitable registration, which were quite limited in scope. The Guidance provides a thorough summary of CRA’s... |
Department of Finance Comments on Penny FundraisingAs announced in the 2012 Federal Budget, the Government of Canada will be phasing out the penny. The Department of Finance has recently released a short document addressing Frequently Asked Questions from charities relating to the discontinuance of the penny.... |
CRA Releases Guidance on Registration and Information on Failure to File T3010CRA has released two new items of interest on its website. The first consists of a new Guidance, CG-017, which sets out the general requirements for charitable registration. The Guidance provides a summary of the basic requirements under the Income... |
CRA Comments on Donations of Depreciable PropertyA recent CRA technical interpretation provides a useful review of the rules surrounding donations of depreciable property. CRA was responding to questions from a taxpayer inquiring about the tax treatment of such donations in several different scenarios. Essentially, CRA considered... |
CRA Announces Completion of Joint Action Plan for Small and Rural Charities InitiativeThe Canada Revenue Agency (“CRA”) announced on September 20, 2012, that it has completed its Joint Action Plan as part of CRA’s Small and Rural Charities Initiative. This Initiative, which began in 2007, involved a government consultation with small and... |
CRA Comments on Treatment of Donated Employment IncomeIn a technical interpretation released on July 26, 2012, CRA commented on the tax treatment of income earned abroad by employees of a charity that is transferred to the charity pursuant to an employment requirement. In the situation addressed in... |
CRA Releases Updated Guidance on Community Economic Development: Expands Acceptable Program Related InvestmentsOn July 26, CRA released CG-014, an updated Guidance on community economic development activities and charitable registration. The new Guidance replaces CRA’s former published policy on the subject, RC4143, which was originally released in 1999. In the 13 years since... |
CRA Releases Updated Information re Application ProceduresIn July 2012, CRA released an updated summary of its procedures when dealing with an application for charitable registration. This guidance is a helpful tool both as an overview of the process, and as reminder of some of the tips and... |
CRA Comments on NPO Issues Facing Sports Clubs and AssociationsTwo recent CRA technical interpretations offer guidance into the CRA’s views on issues affecting sports clubs and associations operating as non-profit organizations (“NPOs”). As part of an ongoing audit project, the CRA is reviewing the operations of a wide range... |
Recent Case Reminds Charities about the Risks with False Donation ReceiptsThe recent decision of the Tax Court of Canada in Grosset v. The Queen offers a reminder to charities and their donors to beware the risks involved with false receipts. The case involved two taxpayers, Oneil and James Grossett, appealing... |
Speech by Director General of Charities Directorate Published OnlineThe text of a recent address given by the Director General of the CRA Charities Directorate, Cathy Hawara, at the Canadian Bar Association National Charity Law Symposium has been published on the CRA website. Ms. Hawara addressed the changes that have... |
CRA Releases Updated Fundraising GuidanceCRA has just released an updated version of its guidance on fundraising activities by registered charities. The new Guidance GC-013 Fundraising by Registered Charities, was issued on April 20, 2012, and replaces former Guidance CPS-028, which was originally released on... |
NPO Issues – Whose Income Is It?As reported previously in this Newsletter, non-profit organizations have been subject to an ongoing CRA audit project over the past two and a half years. The audit project is reviewing the tax compliance of a broad range of NPOs, in... |
Tax Treatment of Charitable Donations from Spousal TrustsIn December 2011, CRA released a technical interpretation that offers clarification on the rules surrounding donations to registered charities from spousal trusts. Such clarification is valuable both to charities issuing receipts as well as well as to advisors in the... |
National Arts Service OrganizationsIn the November issue of this Newsletter, we reported on the draft Guidance issued by the Charities Directorate concerning the registration of arts organizations. Arts organizations should be aware that, in addition to the option of applying for registration as... |
Social Enterprise in CanadaThe 2012 Lexpert®/American Lawyer Guide to the Leading 500 Lawyers in Canada |
Court Releases Decision on Certification of Donation Tax Shelter Class ActionIn November 2011, the Ontario Superior Court of Justice released its decision on a motion for class action certification in Lipson v. Cassels Brock & Blackwell LLP. The case arises out of a charitable donation tax shelter arrangement that was... |
CRA Releases Draft Guidance on Registration of Arts OrganizationsOn November 1, the Canada Revenue Agency (“CRA”) released for consultation a draft Guidance on Arts Organizations and Charitable Registration, which outlines CRA’s views on when an arts organization will qualify for registration as a charity. CRA has invited comments... |
CRA Releases Animal Welfare GuidanceIn the February issue of the Charities and Not-for-profit Newsletter, we reported on the release by CRA of a draft guidance on the promotion of animal welfare, and when this would be considered to be charitable at law. On August... |
Recent Decision Highlights Importance of Proper ReceiptingThe recent decision of the Tax Court of Canada in Oloya v. R. highlights the pitfalls that can occur when insufficient attention is paid to the form and content of donation receipts issued to donors. The case involved an appeal... |
NPO UpdateOver the past few months, CRA has released several documents commenting on the rules under the Income Tax Act that apply to non-profit organizations (NPOs). We have reported in past issues of this Newsletter on CRA’s increasingly strict interpretation of... |
When Do Naming Rights Constitute an Advantage?Where a donor makes a significant gift to a charity, it is not uncommon for the donor to request, or the charity to offer, naming privileges in connection with the gift. This often consists of naming a building, or portion... |
2011 Federal Budget: Provisions Regarding Charities and Other Qualified DoneesCharity Talk, Canadian Bar Association |
Federal Court Of Appeal Upholds Decision Denying Charitable CreditsIn the April 2010 issue of this Newsletter, we reported on the decision of the Tax Court of Canada in Coleman v. M.N.R., in which the Tax Court denied charitable donation credits claimed by various donors to a structured scholarship fundraising... |
Budget 2011 Extends Charity Regulatory Regime to Other Qualified DoneesThe Budget has proposed significant changes to the regulatory regime that applies to qualified donees other than registered charities. The Income Tax Act provides that official donation receipts can be issued not only by registered charities, but also by other... |
CRA Releases Proposed Guidance on the Promotion of Animal WelfareOn February 4, 2011, CRA released for consultation a proposed Guidance on the Promotion of Animal Welfare. The Guidance sets out the guidelines that CRA uses to determine if an organization established to promote the welfare of animals can be... |
The State of Social Enterprise in CanadaHorizons - Innovative Communities: Agents of Change There is a real buzz in the charitable and not-for-profit sector in Canada. The buzz is around the concept of “social enterprise.” What does it mean? How does it work? How does it fit within our traditional structures? All these... |
Can the Purpose of Promoting Debate on Government Policy be Charitable?A recent decision of the High Court of Australia considered whether an organization established for the purpose of promoting the effectiveness of international aid – in part by challenging established government policy – was charitable. A majority of the Court... |
Charities Directorate Receives Positive Review From Auditor GeneralOn October 26, 2010, the Auditor General of Canada released its Fall Report to the House of Commons. The Report included a review of the performance of the Charities Directorate. Although the Report noted some areas in which the Directorate... |
Upcoming Seminars in Southwestern Ontario and TorontoSouthwestern Ontario Miller Thomson’s Southwestern Ontario Charities and Not-for-Profit Group will be hosting a complimentary seminar on November 25, 2010 from 8:30-11 a.m. at the Hilton Garden Inn, 746 Old Hespler Road in Cambridge, Ontario. Speakers will include Blair Botsford,... |
Department of Finance Releases Draft Legislation on Disbursement Quota ChangesOn August 27, the Department of Finance released draft legislation which will implement the amendments to the disbursement quota proposed in the 2010 Budget in March. These amendments will eliminate the majority of the disbursement quota by removing the requirement... |
CRA Confirms Strict Interpretation of NPO Tax ExemptionOn June 25, 2010, CRA released a follow-up technical interpretation to an interpretation released in December of 2009 addressing whether a condominium corporation could qualify as a non-profit organization when using surplus income to reduce members’ fees or to fund... |
Fees Under the New Not-For-Profit Corporations ActMahsa Pezeshki, Corporate Law Clerk Miller Thomson Markham mpezeshki@millerthomson.com 905.415.6473 Industry Canada has recently released a schedule of fees related to various applications and corporate procedures under the new Not-For-Profit Corporations Act (“NFPCA”). While the NFPCA is not yet in... |
Client Awarded Judgment Against Accountant Who Advised In Favour Of Donation Tax Shelter SchemeThe Ontario Superior Court of Justice recently awarded approximately $45,000 to two individuals who sued their accountant for advising them to participate in a donation tax shelter arrangement and for taking secret commissions in respect of the scheme. The donors... |
European Approach to Cross-Border GivingRecent developments in Europe related to cross-border giving demonstrate the increasing recognition of the importance of facilitating charitable giving and charitable activities that cross international borders. In contrast with the very restrictive rules in Canada, judgments in the European Union,... |
Case Law UpdateSeveral court decisions have been released in the past few months which highlight issues of which charities and donors should be aware. Lockie v. The Queen In Lockie v. The Queen, the Tax Court of Canada considered the appropriate determination... |
What Counts as a Donor Benefit? A Recent Case on ScholarshipsIn January 2010, the Tax Court of Canada released its decision in Coleman v. M.N.R. The case provides guidance on the approach that courts will take in determining whether a benefit has been received by a donor in respect of... |
Federal Court of Appeal Rejects Constitutional Challenge to CRA Jurisdiction |
Budget 2010 Significantly Reduces Disbursement Quota Obligations for Charities |
Budget 2010: Some Changes Will Have to Wait |
Membership Rights Under the Canada Not-For-Profit Corporations Act |
Federal Court of Appeal Confirms Transfers of Non-Qualifying Securities |
Ontario Public Guardian & Trustee Releases Fundraising Bulletin |
Returning Gifts |
Update on International Record-Keeping Requirements |
Charitable Registration Revocation Process: Recent Trends |
Court Upholds CRA Revocation of Charity Registered in Error |
Court Decision Eases Record-Keeping Obligations For International Charitable Activities |
Donations of Depreciated Securities |
Tax Court Upholds Transfers of Non-Qualifying Securities |
The Tax Court of Canada: Charity Suspension Postponements Unavailable?Canadian Tax Journal, 167-176 |
Donors Bring Class Action Against Tax Shelter Charity |
Competition Bureau Launches Education Campaign to Help Organizations Combat Fraud |
Tax Court Denies Application for Postponement of Suspension in International Chairty Association Network (ICAN) v. HMR11:2 Charitable Thoughts, Ontario Bar Association, Charity and Not-For-Profit Section |
