May 12, 2013
In Gateway City Church and The Minister of National Revenue, the Federal Court of Appeal dismissed Gateway’s appeal to prevent the Minister from revoking its charitable status. CRA revoked the registered charity’s registration for 3 reasons namely “Failure to maintain adequate books and records, failure to devote all of its resources to its own charitable activities, and provision of personal benefits to a proprietor, member, shareholder, trustee or settlor”. The Court noted ”...the Church’s application can be granted only if the Church meets the test for the granting of stays and injunctions. The Church must show as per (RJR-MacDonald v. Canada (Attorney General): it has an arguable case against the revocation, it will suffer irreparable harm if the revocation is allowed to happen, and the balance of convenience lies in its favour.” The FCA found that Gateway did not meet the test for irreparable harm and dismissed the application. The FCA provided a detailed analysis of the irreparable harm requirement including some tangible examples of why Gateway did not meet the test.
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CRA has released a letter providing responses to the questions posed at the 2011 Canadian Tax Foundation National Conference. CRA provides comments on the NPO Risk Identification Project and various comments on previous Interpretation Bulletin’s regarding NPO’s that have been released. It is interesting to note CRA identifies that there “39,000 entities that file T2, T3 and/or T1044 returns.” There are a large number of non-profits that do not need to file such returns and presumably some NPOs that are supposed to file but don’t. The bulletin also discusses profit that is “incidental” and what are reasonable operating reserves for a non-profit.
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CRA recently released a letter that provides general comments and suggested information that needs to be submitted to the Charities Directorate of the CRA when municipal or public bodies performing a function of government in Canada are applying to be a ‘qualified donee’. This new requirement to apply and be registered on a publicly available list of qualified donees came into effect on January 1, 2012. This category is particularly relevant to the Aboriginal community such as Indian bands. The CRA is still developing the process for applying for registration. However, this letter provides groups with an idea of the information that CRA would require.
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May 10, 2013
The Charities Directorate is launching a new Charities Program Update bulletin. It will be sent to the 23,000 subscribers to the Charities Directorate email list. Lots of interesting information and statistics are contained in the Update.
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May 08, 2013
Today the Ontario government announced the release of the plain language guide to the ONCA.
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May 04, 2013
The CRA has revoked the registration of The Life Centre Word of Faith Ministries Inc. as a charity. The Globe and Mail covered this story in “Toronto pastor, wife charged in alleged $8.6-million Ponzi scheme” http://soa.li/mVtmmlY
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The Canada Revenue Agency has revoked the charitable registration of the Canadian registered charity Trinity Global Support Foundation. The London Free Press has written extensively on this charity and we have covered here: “FCA case on Trinity Global Support Foundation - CRA wins again” http://www.globalphilanthropy.ca/index.php/blog/comments/fca_case_on_trinity_global_support_foundation_-_cra_wins_again
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April 30, 2013
On October 15, 2013 we 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.
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April 25, 2013
Industry Canada today announced today that “The forms under the Canada Not-for-profit Corporations Act have been modified to ensure a high level of Web accessibility to which the Government of Canada is committed. Only the format and look have been modified. The content of the forms remains unchanged. Corporations Canada will continue to accept applications that use the old versions of the forms. Please refer to our website to find specific forms.”
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In this case Trinity Global Support Foundation (the “Foundation”) asked the court to delay CRA publishing a notice of intention to revoke the registered charity status until the Foundation’s other legal claims have been dealt with. The FCA ruled against the Foundation because the Court determined that “there is no substantive evidence that the Foundation or its clients will be forced to shut down or be significantly affected prior to its notice of objection being considered.” The Court also did not think that losing its charitable status caused irreparable harm as “It is clear from the evidence that the reputation of the Foundation has already been subject to intense public scrutiny for reasons distinct from the notice of intention to revoke. As such, I see no basis upon which to conclude that any possible further harm to the Foundation’s reputation will be such as to amount to irreparable harm.” The judge does not mention the London Free Press coverage but presumably that is what is being referred to. The conclusion of the FCA decision is important “Given my conclusions with respect to irreparable harm, I need not consider the balance of convenience element of the test. However, it is clear that serious allegations have been raised in the context of the proposed revocation. It is clear from the Foundation’s own evidence that it has been engaged in fundraising activities using tax shelter arrangements, which have been an activity of legitimate concern generally to the Minister. As such, in my view the public interest in the Minister protecting the integrity of the charitable sector outweighs the Foundation’s interest in staying revocation and I see no reason for the Court to grant an equitable remedy to the Foundation.”
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