January 11, 2016

OBA Program on new developments with forfeited property of dissolved not-for-profit corporations

On Tuesday, April 19, 2016 I will be chairing an OBA program entitled "The Forfeited Property of Dissolved Not-for-Profit Corporations: New Developments in the Law".  There will be 3 speakers from the Ontario government discussing upcoming changes. 

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January 10, 2016

Which Canadian charities spent the most outside of Canada in 2013

January 10, 2016

Which are the largest Canadian registered charities by assets - 2013

Topics: Transparency

December 24, 2015

CRA’s comments on charity registration process at 2015 APFF conference roundtable

At the 2015 APFF conference roundtable, CRA responded to several questions regarding the charitable registration process:

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December 21, 2015

Latest Update on CNCA continuances and dissolutions from Industry Canada

I recently contacted Industry Canada and they advised that as at December 18, 2015 there were 19,997 not-for-profit corporations under Canada Not-for-profit Corporations Act (“CNCA”) . The figure includes new incorporations, continuances from the CCA and continuances from other acts/jurisdictions. The number of continuance have slowed down with less than 50 per month being submitted to Industry Canada. The number of continuances to the CNCA was 12,525 as at December 5, 2015. There are also 3,163 not-for-profit corporations still under the Canada Corporations Act (“CCA”)

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December 18, 2015

The important charity information British people get to see that Canadians are forbidden from seeing

The Charity Commission of England and Wales just released a report entitled Campaigning and political issues arising in the run-up to the 2015 General Election.  When they put it out they probably did not think that it is such a special report.  It explained that in the 2015 UK election there were complaints about UK charities, the Charity Commission investigated and what the result was.   Nothing that exciting, except in Canada if the CRA was to prepare a similar report and provide it to either MPs or the public then people at CRA would go to jail.    

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December 16, 2015

V. Ross Morrison v. The Queen -deals with Canadian Humanitarian Trust and Canadian Gift Initiative

The Honourable Justice F.J. Pizzitelli of the Tax Court of Canada dealt with a motion in V. Ross Morrison v. The Queen. The court dismissed the motion with costs. The cases deals with the Canadian Humanitarian Trust (“CHT”) and Canadian Gift Initiative (“CGI”) which CRA would describe as abusive charity gifting tax schemes.   Mr. Morrison had wanted that the CRA to "disclose or produce for inspection the names and municipal and/or email addresses of all persons who have filed Objections to the Reassessments in the CHT and CGI Donation Programs and whose Objections have not been resolved (the “Outstanding Objectors”);" The court noted "I do not agree with any of the Appellant’s arguments. The Appellant has neither provided nor argued any legal precedent that supports his position on any of these issues. There is ample precedent against."

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December 12, 2015

CRA revoking registered charities for long term inactivity

The CRA has been focusing in on charities that have not been active for a number of consecutive years.  They have been sending out letters to the various charities asking  them if they want to voluntarily give up their charitable status, or explain the reason for inactivity, or CRA may take compliance action.  CRA is presumably concerned with inactive charities as they clog up the system and also may be targets for charity scammers to take over and use inappropriately.   

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December 08, 2015

R. v. Kueviakoe - using the criminal courts to go after charity fraud

In R. v. Kueviakoe, 2015 ONCJ 681 (CanLII) Ekue Kueviakoe was charged with numerous offences contrary to the Income Tax Act (Canada) because he prepared many false income tax returns.  He was fined at a rate of 100% of the tax avoided on all those income tax returns and sentenced to a one year conditional sentence ie. house arrest.  He will have to pay over $70,000 in fines.   The Judge took into account a myriad of factors in determining the sentence including sick members of his family, his loss of a stable job resulting from the fraud etc.  The Judge noted that in terms of the taxpayers "The Canada Revenue Agency reassessed each of those people such that they are responsible for paying their portion of those taxes.  The Canada Revenue Agency has therefore already been reimbursed.  The individual taxpayers might also have been assessed administrative penalties for their part in this."  

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December 07, 2015

Canadian government proposes larger tax incentive for donations against donors income over $200,000

As we know the Federal government is creating a new higher top marginal tax rate for those earning income over $200,000 and increasing the tax on that income from 29% to 33%.  From a tax policy perspective this will increase the progressivity of the income tax system in Canada.  The Federal government is also increasing the tax credit for donors that are in the 33% marginal tax bracket so that instead of the 29% tax incentive they will receive a 33% Federal tax incentive.  So for people earning over $200,000 in 2016 this will mean a greater tax incentive for certain donations that offset their income over $200,000.  The increased incentive will only take effect on January 1, 2016.

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December 06, 2015

Charity Commission encourages directors of charities to take responsibility for fundraising

There has been a large amount of scrutiny of fundraising practices in the UK over the last number of years and especially the last few months.   The Charity Commission of England and Wales has published new draft guidance "which states more clearly than ever that trustees must take responsibility for the fundraising undertaken by their charities."

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December 06, 2015

Toronto Star article “Cancer foundation co-founder misused donor cash, judge finds”

The Toronto Star had an article of December 5, 2015 entitled "Cancer foundation co-founder misused donor cash, judge finds". It sheds some light on how a co-founder of a Canadian registered charity, Steven Sokolowski, has been ordered to repay to the charity a large amount of money for "private parties, pricey wine and payments to girlfriends."  The article is worth reading.  It highlights the importance of having good governance and adequate internal controls in a charity.

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December 04, 2015

CRA Revokes the Registration of Le Refuge des Rescapes for involvement in tax shelter scheme

Today the Canada Revenue Agency announced the revocation of the registration of of the Canadian registered charity Le Refuge des Rescapes for issuing over $2 million in official donation receipts connected with an abusive charity gifting tax scheme. 

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December 03, 2015

Some good new notices on the CRA website that will help donors and charities

I noticed recently a couple of new notices/disclaimers on the CRA website relating to CharityFocus.ca and the credibility of registered charities.

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November 27, 2015

Report by the Mowat Centre: “Change Work: Valuing decent work in the not-for-profit sector”

The Mowat Centre recently released a report with the aim of promoting the discussion of decent work in the NFP sector and encouraging action on NFP workforce development issues. The report is a result of an 18 month collaboration between the Ontario Nonprofit Network, Toronto Neighbourhood Centres and Mowat NFP. 

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November 25, 2015

CRA initiative “Protect yourself against fraud”

It is interesting to see that CRA used to refer to "abusive charity gifting tax schemes" and they appear to be lumping them in with fraud.  "Meet Mary & William. Mary and William are a married couple with kids. They have fallen victim to a donation tax shelter scheme. Find out more about Mary and William’s story and how you can protect yourself against fraud."

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November 25, 2015

Mattachione, V. et. al. v. The Queen (TCC)

The Tax Court of Canada recently released a decision where they dismissed the appeals of former spouses relating to reassessments under the Income Tax Act with respect to their alleged charitable donations made in 2003, 2004 and 2005. 

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November 23, 2015

CRA letter on gifting to a public foundation

CRA recently released a letter which discusses whether a gift of a share of the capital stock of a corporation to a public foundation to which subsection 118.1(5) applies after 2015, would qualify as an 'excepted gift' as defined in subsection 118.1(19) of the Income Tax Act. 

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November 14, 2015

The Paris terrorist attacks are a reminder to Canadian charities to be vigilant

The terrible events recently in Paris remind charities of the importance of ensuring that their resources are not used to support of terrorism.  This applies to charities operating in Canada and also those who operate outside of Canada.  Periodically charities should review the CRA checklist on avoiding terrorist abuse.  There are other resources that charities may wish to review as well.

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November 10, 2015

New E-Mail Address for Filings to Corporations Canada

Corporations Canada has a new email address when filing documents through e-mail.  This is particularly important for CNCA corporations.  The e-mail address has been changed to IC.corporationscanada.IC@canada.ca.  In the meantime, Corporations Canada still receives and accepts filings sent through the old email address corporationscanada@ic.gc.ca, but moving forward, the new email address should be used when filing documents through e-mail to Corporations Canada.

November 02, 2015

What does the 2015 Federal election mean for Canadian charities?

The Conservative loss in the 2015 Federal election and the Liberal majority government will have some impact on the Canadian charity sector.  Here is my article What does the 2015 Federal election mean for Canadian charities

November 02, 2015

Successful appeal by CRA in Canada v. Castro, 2015 FCA 225

We have previously blogged about the decision of the Tax Court of Canada in David, R. et al. v. the Queen (TCC) (here and here). In this decision, the court allowed the appeals of the respondents relating to tax credits that had been previously disallowed by the Minister of National Revenue for gifts the respondents had made to CanAfrica International (CanAfrica), a registered charity, in 2006 (each of the respondents was issued an inflated tax receipt by CanAfrica).  

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November 02, 2015

CRA letter - does a park qualify as a municipal/public body performing a function of government

CRA recently released a letter which discusses whether a park qualifies as a municipal or public body performing a function of government for purposes of 149(1)(c) of the Act and the definition of a qualified donee in subsection 149.1(1).

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November 01, 2015

Ontario Bar Association program “Top Compliance Issues for Canadian Charities” on Nov 9, 2015

On November 9, 2015 I will be presenting a program for the Ontario Bar Association, along with Nevena Urosevic, on Top Compliance Issues for Canadian Charities.  It is available both in-person and by webcast.

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October 26, 2015

GLGI abusive charitable gifting tax scheme slammed in Tax Court of Canada

In the case Mariano v. The Queen 2015 TCC 244 the Honourable Justice F.J. Pizzitelli reviewed in great detail the Global Learning Trust (2004) and the Global Learning Gift Initiative (GLGI) program.  These programs are what CRA calls abusive charity gifting tax schemes.  For those interested in the regulation of charities and the definition of gift this is a must read case.  It discusses gifts and donative intent, fair market value and valuation reports.  Mr. Justice F.J. Pizzitelli goes into great detail and analyzes the various positions, their expert witnesses and the conduct of the promoter's advisors.

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


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.

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