November 03, 2013

“Talking About Charities 2013” Public Opinion Poll Released

The Muttart Foundation has released the 2013 edition of its “Talking About Charities”.  It updates its last similar opinion poll from 5 years ago.

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Topics: Transparency

November 02, 2013

Partial Settlement of ParkLane Gift Program class action according to Paliare Roland website

At the website of the Toronto class action law firm Paliare Roland they have a note that “On Friday, October 18, 2013, the Ontario Superior Court of Justice approved the settlements with the Law Firm Defendants (including Edwin C. Harris Q.C.), and with the Funds for Canada Foundation, Mary-Lou Gleeson, Matt Gleeson and Gleeson Management Associates Inc. (the “FFCF/Gleeson Defendants”). ... The settlement with the FFCF/Gleeson Defendants is for $950,000, and requires them to co-operate in the ongoing prosecution of the action by producing documents and giving evidence.  The settlement with the Law Firm Defendants is for a minimum of $23,130,789 and a maximum of $27,242,843. The Law Firm Defendants will also be obliged to produce documents and give evidence.”  It will be interesting to see how the litigation proceeds.

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October 31, 2013

Peter Braid’s Bill on “National Charities Week” and to amend donation deadline has been withdrawn

Peter Braid on October 23, 2013 withdrew his bill entitled “An Act respecting a National Charities Week and to amend the Income Tax Act (charitable and other gifts)”.  We welcome the withdrawal of the private members bill as we, and a number of organizations, had expressed concerns with the private members bill, especially the idea of extending the deadline for charitable contributions, and the lack of consultation with the sector.

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October 31, 2013

CRA revocation letter to the Corban Foundation on forgivable loan program

Here is an interesting series of letters from CRA to the Corban Foundation in the 1990s relating its revocation as a registered charity.  It deals with the meaning of a gift,  and various programs to provide tuition assistance to those attending Christian schools.  It provides CRA’s views on the legal arguments and cases.

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October 29, 2013

Presentation to the Schulich School of Business, York University on Structures for Social Enterprise

I enjoyed giving a presentation tonight to an MBA class at Schulich School of Business at York University on Structures for Social Enterprise.  Great students and lots of questions.

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October 27, 2013

CRA’s view of compensation of directors of registered charities.

I am looking at a number of old audit letters from CRA.  In one of the audit letters it discusses the CRA’s views on director compensation.  We have previously discussed this issue on our blog.  Here are some paragraphs from a CRA letter calling for the revocation of a particular registered charity’s status with one of the concerns being director compensation.

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October 26, 2013

How does a Canadian charity change its fiscal year end with CRA?

Occasionally a Canadian registered charity will want to change its fiscal year end.  Sometimes it is because you want to align with another charity or funder.  Sometimes you just find that there are better or worse times to be involved with financial statements and audit.  If you are a Canadian charity and want to change your fiscal year end here is information from the CRA on how to do that.

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October 24, 2013

Article “Initial T3010 Descriptions of Political Activities by Canadian Charities” by Mark Blumberg

So far the CRA 2013 database has about 7900 charities on it.  There are in total approximately 86,000 Canadian charities who will file their T3010s.  Therefore, less than 10% of the 2013 T3010 forms have been filed and inputted into the CRA database. We have imported the information from the T3010 database in Schedule 7 dealing with description of political activities from the small number of charities that have made filings.

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October 23, 2013

Presentation to Circle on “Compliance Issues with Successfully Funding Aboriginal Groups”

I had the privilege of presenting a presentation today on Compliance Issues with Successfully Funding Aboriginal Groups for The Circle of Philanthropy and Aboriginal Peoples in Canada’s All My Relations Gathering in Toronto.

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October 19, 2013

Advisory from Blumbergs– it is best not to incorporate a charity under the Ontario Corp. Act

It looks like the new Ontario Not-for-Profit Corporations Act, 2010 (“ONCA”) will not come into force until July 2014 or perhaps in 2015.  If one is considering establishing a new charity today and you are based in Ontario we would strongly encourage you to use a Federal corporation under the Canada Not-for-profit Corporations Act (CNCA) and avoid using the old Ontario Corporations Act (OCA).  Otherwise, you will establish an Ontario corporation and you will probably have to make changes to bring it into compliance with the new ONCA in a year or two or three.  For most, save the aggravation and double work and start off Federal.

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October 19, 2013

Updated Canada Not-for-profit Corporations Act Suitcase from Blumbergs

Here is an updated from Blumbergs Canada Not-for-profit Corporations Act (CNCA) Suitcase .  The Canada Not-for-profit Corporations Act (CNCA) came into force on October 17, 2011.  Organizations now have less than one year to continue to the new act or face involuntary dissolution and if you are a charity then loss of registered charitable status.  You might find the CNCA Suitcase a useful resource.

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October 19, 2013

Cost decision in Lipson v. Cassels Brock & Blackwell - law firm ordered to pay $298,000 in costs

In the ongoing case of Lipson v. Cassels Brock & Blackwell there has been a cost award in the certification motion.  The Ontario Court of Appeal had earlier heard an appeal of Mr. Justice Perell’s decision in the certification motion and Ontario Court of Appeal sided with Mr. Lipson and which is dealt with on this blog and elsewhere.  The Ontario Court of Appeal ordered “Costs of the certification motion remitted to the motion judge to be dealt with in light of this Court’s reasons.” and now Mr. Justice Perell, in his decisions, determines the cost as “I think the appropriate exercise of discretion is award Mr. Lipson the $298,582.71 that he seeks but to make $150,000.00 payable to him by Cassels Brock in the cause and the balance of $148,582.71 payable forthwith. I would not backdate the costs award. I make no order as to costs with respect to the costs submissions.”  This award of costs is in addition to an earlier award of costs from the Ontario Court of Appeal which provided costs for the appeal “on a partial indemnity basis in the amount of $50,000 for fees, $10,000 for disbursements, and in addition the amount of the applicable taxes.”

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October 18, 2013

Charities Directorate of CRA adds additional webinars to website on charity law

The CRA has added a number of new webinars to their websites on arts, CED, the T3010 and political activities.

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October 16, 2013

CNCA Suitcase 2013

October 15, 2013

Political activities self-assessment tool

Zachary Euler of the CRA Charities Directorate mentioned today in a presentation to the Blumbergs’ Charity Law Institute that CRA has recently posted a “Political activities self-assessment tool” on their website.  The “Political activities self-assessment tool” is a helpful, plain language English/French tool that will help charities understand whether they are conducting political activities, whether they are appropriately tracking and reporting on those activities.  I guess you could call it ‘CPS-022 for Dummies’.

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October 13, 2013

Blumbergs’ Canadian Charity Law Institute 2013 - corporate law, CRA compliance and more

On October 15, 2013, Blumbergs will be having the 2nd Annual Blumbergs’ Canadian Charity Law Institute in Toronto. It will be a full day of practical legal and ethical compliance information geared toward charities, professional advisors and those interested in regulatory issues affecting charities. Space is limited.  We have 125 registered already. 

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October 13, 2013

Latest numbers from Industry Canada on continuances and incorporations under the CNCA

Under the CNCA since it came into force in October 2011 there have been 2700 incorporations and 1800 continuances.  This is according to numbers provided by Industry Canada.

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October 11, 2013

Class Action Lawsuit Against CEAF and OACSS over tax receipting program for Christian schools

The Hamilton law firm Scarfone Hawkins has just filed another charity class action lawsuit.  The case is Terry Emms vs.  Christian Economic Assistance Foundation and Ontario Alliance of Christian School Societies.  The case essentially deals with the Christian Economic Assistance Foundation (CEAF) School Support Program (SSP).  CEAF was a registered charity that was recently revoked by CRA.  A large number of Christian schools had apparently participated in the program.

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October 10, 2013

Hall v. The Queen - donation to Scientology does not result in tax deduction in Canada

Scientology is not considered a registered charity in Canada.  If an individual donates to Scientology they will not receive an official donation receipt in Canada.  In Hall v. The Queen, Mr. Hall donated money to the International Association of Scientologists (“IAS”) and argued that the fact that he did not get a tax benefit is a violation of his Charter rights.  Justice Pizzitelli of the Tax Court of Canada dismissed Mr. Hall’s appeal.  It is interesting that in the decision it notes “... IAS is not a registered Charity in Canada nor apparently even applied to be.”  Apparently Scientology has in the past tried to obtain registered charity status but CRA declined their application.

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October 06, 2013

Charity Commission of England and Wales refuses to register Human Dignity Trust

The Charity Commission made clear that it is not questioning the worth of the organization but refused to register it as it did not have exclusively charitable objects.  The Human Dignity Trust was focussed on challenging laws around the world which criminalize consensual gay sex.  It is a difficult set of facts but the case would probably be decided in a similar fashion in Canada.  A charity can carry out some political activities, but its stated or unstated objects have to be exclusively charitable.

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October 05, 2013

Some recent CRA webinars dealing with political activities

The Charities Directorate has recently put up new webinars dealing with political activities.  Charities are allowed to conduct political activities but there are rules and limits around how that should be done.  These webinars will help charities understand CRA’s views on what is a political activity, what kinds of political activities can charities be involved with and the restrictions on registered charities.  Also I have reproduced the transcripts of these presentations which some may prefer to review.

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October 05, 2013

Toronto Star article “Toronto Christian program tries to ‘heal’ gays”

The Toronto Star published an article entitled “Toronto Christian program tries to ‘heal’ gays” with a by-line “A Star reporter goes undercover inside a gay conversion program in Toronto to uncover the controversial practice of “healing” homosexuality.”  It is an interesting article and worth reading.

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October 05, 2013

Sowah v. The Queen -2013 TCC 297 -another tax receipt rejected by Tax Court of Canada

I am not sure if I should even cover Sowah.  The CRA denied a claim by Emily Sowah $10,252 because the receipt did not have all the required elements and also Emily Sowah was not able to prove that she had made such cash donations to the Jesus Healing Center, which is a registered charity.  Apparently over 3 million in receipts were issued by the Jesus Healing Center.  The Tax Court of Canada sided with CRA.  My lack of interest in the case is partly based on there having been a number of similar decisions of the Tax Court on these type of cases.  However, according to CRA over 100,000 people have submitted false official donation receipts and their value is between 300 -500 million which is a shame.  Also keep in mind the false receipting problem pales in comparison to the $6 billion of receipts issued as part of “abusive charity gifting tax schemes”.

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October 05, 2013

Federal Court of Appeal deals with motion by IRFAN

International Relief Fund for the Afflicted and Needy (Canada) (“IRFAN”) was revoked for cause in 2011.  Previously we had provided copies of the CRA letters outlining in quite a large amount of detail the concerns CRA had with IRFAN.  A few months ago IRFAN appealed the revocation and over the summer there was a procedural motion brought before the FCA.  The FCA notes “In its appeal, the appellant alleges that the Minister abused her discretion and acted unreasonably, in a procedurally unfair manner, and with a closed mind. The appellant also alleges that the Minister’s decision violates sections 2 and 15 of the Charter by violating its “associational rights with partner organizations abroad and charitable contributing communities and individuals in Canada” and its equality rights.”  IRFAN asked that certain allegedly “fresh” evidence should be allowed in the appeal and the FCA rejected that demand.

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October 03, 2013

Charity Directorate Service standards for charities and charitable giving

How long does it take the Charities Directorate to answer a call, respond to a letter or respond to a charity application?  Well, it depends.  But you might find CRA’s Service standards for charities and charitable giving helpful in getting a sense of average times.  For example over 80% of the time CRA answers calls within 2 minutes!  When someone calls me I typically answer the phone within 3-5 seconds!

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Do you require legal advice with respect to Canadian or Ontario non-profits or charities?

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Charity Lawyer Mark Blumberg

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.

mark@blumbergs.ca
416.361.1982
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