June 20, 2011

Ontario’s new Not-for-Profit Corporations Act - additional information from Ontario government

The Ontario Ministry of Consumer Services has recently updated its website pages on the new Not-for-Profit Corporations Act, 2010 with a small amount of information on the act.  The new act will be of interest to Ontario non-profit corporations but will probably only be proclaimed in late 2012.  We are anticipating that in the future the Ontario government will provide information and resources to non-profits on the new act.

The link to the Ontario Ministry of Consumer Services pages on the new Not-for-Profit Corporations Act, 2010 is at:

http://www.sse.gov.on.ca/mcs/en/Pages/Not_For_Profit.aspx

For the complete Not-for-Profit Corporations Act (Ontario), which is not yet in force, see:

http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_10n15_e.htm

April 18, 2011

Update on the Canada Not-for-profit Corporations (CNCA) and when it will come into force

The update on the CNCA is that there is no update.  On February 16, 2011 Marcie Girouard, Director General of Corporations Canada, and Coleen Kirby, Manager of the Policy Section, spoke in Toronto about the Canada Not-for-profit Corporations (CNCA).  Coleen advised that it was expected that the CNCA would come into effect in late Spring but if there was an election that her estimate is that it would take about another 3 extra months. She made it clear that it was up to the cabinet, and not her as to timing.  If the end of Spring is late May, then late August is the best guess at that point as to when the CNCA would come into force. 

At that meeting I asked a question about whether there would be a heads up about the date of the new legislation or would it come into effect immediately - the response was that Industry Canada does not know what the government will do about giving advance warning.  The exact date will have little effect on most charities as they will have 3 years to “continue” under the new act and file necessary paper work. 

However, the date of coming into force will have an impact on people trying to incorporate under the current/old Canada Corporations Act.  From the time draft documents are prepared and signed, especially if the incorporators are in a number of different countries and the content of the application is complicated, it can take in some cases weeks or months for documents to be finalized, signed and submitted to Industry Canada.  As well, in many cases organizations applying to CRA for charitable registration will put in draft corporate materials so that if CRA requests a change, for example to the objects, it is easier to change a draft rather than obtaining supplementary letters patent under the current/old act.  It is not clear if any notice and advance warning will be given to people that their documents will not be accepted after a certain date. 

My suggestion to Industry Canada is that it would be best if there is at least a 1-2 month lead time before the CNCA comes into effect and this will give organizations that are in the process of assembling documents the time to get the documents in. 

Another interesting piece that came from the Industry Canada presentation was that Industry Canada will have a “by-law builder” which will help charities assemble by-laws that have have some flexibility in them and they can be customized to the needs of the charity. 

February 26, 2011

Industry Canada releases Canada Not-for-profit Corporations Regulations with Executive Summary

On February 26, 2011, Industry Canada published the Canada Not-for-profit Corporations Regulations under the Canada Not-for-profit Corporations Act.
It provides an Executive Summary as well.

Here is the text of the Executive Summary and the Regulation Industry Canada releases Canada Not-for-profit Corporations Regulations

January 31, 2011

Corporations Canada free information session on the new Canada Not-for-Profit Corporations Act - TO

Are you a Federal non-profit corporation currently under the Canada Corporations Act?.  If so in the next 3 years after the new Canada Not-for-Profit Corporations Act comes into force will have to continue/transition to the new Act.  Corporations Canada will be holding an information session on the new Canada Not-for-Profit Corporations Act (NFP Act) in Toronto and you may find it very useful. The information is below:

THIS MESSAGE IS SENT ON BEHALF OF MARCIE GIROUARD, DIRECTOR GENERAL, CORPORATIONS CANADA //
CE MESSAGE EST ENVOYÉ AU NOM DU MARCIE GIROUARD, DIRECTRICE GÉNÉRALE, CORPORATIONS CANADA
French version follows.
Corporations Canada will be holding an information session on the new Canada Not-for-Profit Corporations Act (NFP Act) in Toronto. The information session will be held on Wednesday, February 16th, 2011 in the Scott Room of the Delta Chelsea Hotel, 33 Gerrard Street West.
Networking will start at 9:00 a.m. and will be followed by a presentation from 9:30 a.m. to 11:00 a.m. The presentation will touch on the following NFP Act topics:
• Changes that the new NFP Act brings
• The transition process
• Basic compliance rules (e.g., annual return, change of directors)

If you are interested in attending, please reply to Liana Dupré at .(JavaScript must be enabled to view this email address) by February 4th, 2011.  Also, if you are aware of others who may be interested in attending this session, please feel free to forward this invitation.
We look forward to seeing you there.
Yours sincerely,
Marcie Girouard
Director General

———————————————————————————————————————————————————————————————————————————————-
Corporations Canada tiendra une séance d’information au sujet de la nouvelle Loi canadienne sur les organisations à but non lucratif (Loi BNL) à Toronto. La séance d’information aura lieu le mercredi 16 février, 2011 dans la salle Scott de l’hôtel Delta Chelsea au 33 rue Gerrard Ouest.
Le réseautage débutera à 9h suivi d’une présentation de 9h30 à 11h. La présentation comprendra les points de la Loi BNL suivants :
• Les changements apportés par la nouvelle Loi BNL
• La procédure de transition
• Des règles de base sur la conformité (p. ex. le rapport annuel, les changements concernant les administrateurs)

Si vous êtes intéressé(e) à participer à la séance d’information, veuillez en informer Liana Dupré (.(JavaScript must be enabled to view this email address)) par courriel d’ici le 4 février 2011. De plus, nous serons heureux d’accueillir toute autre personne qui souhaite participer à la séance, et vous encourageons à faire acheminer la présente invitation.
En espérant vous voir à la séance, je vous prie d’agréer mes salutations distinguées.
Marcie Girouard
Directrice générale

December 21, 2010

Blumbergs’ Canadian Charity Law List - December 2010

Here is a copy of the Blumbergs’ Canadian Charity Law List for December 2010.

1) GIVE THE GIFT OF COMPLIANCE - upcoming CLIP Webinars


Here are a few of many upcoming CLIP webinars (online seminars) and charity chats on receipting, fundraising and foreign activities. They are available at no charge and provide 1 hour webinars on these important subjects - great for people who work at charities, as well as volunteers such as board members. You just need a computer connected to the internet. The Charity Law Information Program (CLIP) is supported by a contribution from the Charities Partnership Outreach Program (CPOP) of the Charities Directorate of the Canada Revenue Agency.



C-470 Salary Caps and Compensation Disclosure


2) Finance committee reviews C-470 and amends to remove salary cap, increase salary disclosure for 100G


The Finance Committee has reviewed C-470. The Finance Committee has amended the private members bill and it will be sent for Third reading in the House. The $250,000 compensation cap has been removed which is important as it could have resulted in many hospitals, universities, research institutions having to terminate employment contracts that paid over 250,000 or possibly be revoked. If the bill is passed in its current form, there would be a requirement for the Minister to disclose any employee or executive earning above the $100,000 for years beginning in 2012 “unless otherwise justified”. The amendments made it mandatory for the disclosure to be made, except that in some cases an organization – for example a women’s shelter, may able to justify that information not being disclosed. It would be effective as of 2012 rather than 2011 as originally proposed to give CRA time to make changes.



3) “Bill C-470 and the Backlash Against Fundraising” - by Malcolm Burrows

Malcolm Burrows recently wrote a very thoughtful article for the September 2010 edition of Gift Planning in Canada on C-470, the private members bill to cap salaries at registered charities and to force charities to disclose salary information on the top 5 employees irrespective of their earnings. I have received permission to reproduce the article here and thought that some who are interested in compensation and HR practices in the charitable sector would find it useful.



4) Blumberg Segal LLP’s submission on C-470 compensation Bill - enough red herrings, more transparency

The House of Commons Standing Committee on Finance asked a number of organizations and individuals to submit one-page submissions on Bill C-470 and here is our submission.



5) Blumbergs' Submission “Canadians demand more transparency in non-profit and charitable sector”

Here is a Pre-Budget Submission to the House of Commons Standing Committee on Finance entitled “Canadians demand more transparency in non-profit and charitable sector” by Blumberg Segal LLP.



Charity Scams and Abuse


6) Australians cracking down on Canadian-style abusive charity gifting tax shelters


A while ago, I got a call from Australia. An investment advisor was wondering about certain Canadian individuals involved with what he thought were some pretty risky charity gifting tax shelter schemes in Australia. Here is an Aggressive Tax Planning alert from the Australian government which “describes a leveraged donation arrangement where a taxpayer (donor) claims a gift deduction for pharmaceuticals and other items to a Deductible Gift Recipient (charity) for use overseas, which far exceeds the amount of cash outlaid.” The market for these schemes in Canada seems to have collapsed as CRA is denying the amounts, former investors are complaining bitterly about the schemes and their promoters and investors are launching class action lawsuits against the charities involved, the schemes promoters and the law firms who provided legal opinions.



7) CP article entitled “Probes of tax scams prompt revamp of charitable receipts”

The Canadian Press has written an article on the fraudulent misuse of charitable receipts.



8) Canadian MP Calls for RCMP probe of promoters involved with abusive charity gifting schemes

Here is a good idea from Albina Guarnieri, MP from Mississauga East-Cooksville. I must admit I only recently saw this, I was too focused on her extremely ill conceived Private members Bill on charity compensation disclosure.



9) Maréchaux v. Queen - victory for CRA at Federal Court of Appeal in “leveraged donation” scheme

The decision is quite concise and well worth reading for the ever decreasing number of people in Canada who still believe that you can take part in a tax shelter gifting arrangement and make money off a donation to a registered charity. F. Max E. Maréchaux, is a partner at the law firm Miller Thomson LLP and he is represented by Miller Thomson LLP in this matter. According to the decision “F. Max E. Maréchaux participated in a “leveraged donation” scheme. The essence of the scheme was that, for an expenditure of $30,000, he received a charitable donation tax receipt for $100,000, and claimed a tax credit of $44,218, a potential return on his outlay of nearly 50% in a matter of months. Very little of the money was retained by charities to advance their purposes.” Mr. Maréchaux had lost a decision at the Tax Court of Canada and his appeal to the Federal Court of Appeal was dismissed, as “Mr Maréchaux had not made a “gift””.



10) Advisory on Tax Shelter Gifting Arrangements by the Canadian Cultural Property Export Review Board

Here is an advisory recently posted on the site of the Canadian Cultural Property Export Review Board warning people to be cautious about any tax shelter involving the gift of cultural property in Canada. The Canadian Cultural Property Export Review Board has instituted a number of measures to minimize the possibility of inflated valuations of cultural property including changes to the application form.



11) R. v. Viccars, 2010 ABPC 351 - lawyer involved with tax evasion scheme convicted and sentenced

This case deals with sentencing of a lawyer, Mr. Viccars, for facilitating a tax evasion scheme dealing with tax write offs for computer software. It has nothing to do with charities or non-profits but it is interesting to read the judge’s comments as it relates to lawyers and their responsibilities. Governments have been using criminal proceedings to go after some people involved with fraudulent issuance of charitable donation receipts, what is sometimes referred to as fraudulent receipting. It will be interesting to see if criminal prosecutions will be used as a tool to deal with professional advisors involved with certain sophisticated abusive charity gifting tax shelters. Shutting down a registered charity, controlled by a promoter of an abusive charity gifting tax shelter, who has another ten in his back pocket is helpful - but we need criminal prosecutions exactly as we saw here.



12) The CRA revokes the registered status of Biathlon Canada

Another registered Canadian amateur athletic association (RCAAA) loses its status because of involvement with abusive charity gifting tax shelters. $25.9 million in donation receipts. This sports group should be ashamed of itself.



13) R. v. Leo-Mensah, 2010 ONCA 139 - charity receipting fraud results in longer sentence

Charity receipting fraud in Canada is a big problem. According to CRA, between 100,000-135,000 donors have been involved between 2004 and 2009 with hundreds of millions in fraudulent donation receipts issued. There is no question that the courts will sentence anyone involved to prison. The issue is how much time. In R. v. Leo-Mensah it dealt with that issue. The Crown sought a stiffer sentence and the courts agreed and gave the accused an extra two years, that is after he had already spent 11 months in pre-trial custody for which he receive a credit on a two-for-one basis. He also received a significant fine. The trial judge had not taken into account “as an aggravating factor, that the value of the fraud committed exceeded $1,000,000. This she was obliged to do pursuant to s. 380.1(1)(a) of the Criminal Code.”




What's New from CRA?


14) Auditor General Report on CRA, Registered Charities and Abusive Charity Gifting Schemes


The 2010 Fall Report of the Auditor General of Canada has been released and Chapter 7 deals with Registered Charities and the Canada Revenue Agency. The audit report is positive for the Charities Directorate.



15) Cathy Hawara appointed Director General of the Charities Directorate of the CRA

Cathy Hawara, previously Acting Director General, has now been appointed Director General of the Charities Directorate of the CRA, effective October 5, 2010. This is very good news as we will have some greater stability at the Charities Directorate. She has continued the approach of consultation with the sector, providing education to registered charities on their Income Tax Act obligations and a much needed vigorous crackdown on a few bad apples who are involved with abusive charity gifting tax shelters and receipting fraud.



16) CRA encourages donors to “Donate wisely this holiday season”

Here is a CRA press release on donating wisely. If you are interested in donating wisely there are a number of articles on my website that may be helpful including: http://www.globalphilanthropy.ca/index.php/blog/comments/how_to_effectively_donate_to_a_canadian_charity_-_some_suggestions_from_a_c/



17) CRA notes new guidances that will be released for consultation

The Charities Directorate of CRA in Charities Connection No. 5 - November 2010 notes new guidances that will be released for consultation by the Charities Directorate.



18) CRA releases Charities Connection #5 with info on new T3010-1, Guidance Documents and Consultation

The CRA has just released Charities Connection #5 with information on the new T3010-1 Registered Charity Information Return, highlights from some recent Guidance Documents, information on their upcoming consultations and speakers kits that anyone can use to educate groups about wise giving. The biggest piece of information is confirmation that the t3010-1 is essentially similar to the T3010B but certain minor changes are made to the form to comply with the recent disbursement quota changes announced in March 2010.



19) New T1044 Form - Non-Profit Organization (NPO) Information Return and Guide for Canadian non-profits

The CRA has revised its T4117 Income Tax Guide to the Non-Profit Organization (NPO) Information Return and the T1044 Form - Non-Profit Organization (NPO) Information Return. If an organization is a registered charity under the Income Tax Act they would not have to complete the form. Although this form is filed with CRA, unlike the T3010 Registered Charity Information return, it is not available to the public.



20) Cathy Hawara’s presentation “What’s New at the Charities Directorate” November 2010

Here is a copy of the presentation “What’s New at the Charities Directorate” delivered by Cathy Hawara, Director General, Charities Directorate. It covers a number of topics including the recent very positive Auditor General’s Report on the Charities Directorate, Changes to the Disbursement Quota (DQ), the Charities Directorate’s strategic direction, a Compliance update and view guidance posted on web site and upcoming guidance consultations.



21) CRA to introduce new T3010-1 form for fiscal periods ending on or after Dec 1, 2010
CRA advised today “A revised Registered Charity Information Return has been developed in response to changes announced in the federal budget of March 4, 2010. This new Form T3010-1 will be used by charities with fiscal periods ending on or after December 1, 2010 and will be mailed to charities early in January 2011.”



22) New T3010 form - the T3010-1 appears to be similar to earlier form

It appears that the changes from the T3010B to the T3010-1 will be minor and all of the changes are referenced in the link: http://www.cra-arc.gc.ca/chrts-gvng/chrts/bdgt2010/t3010_nsrt-eng.html relating to the March 4, 2010, Federal Budget. That will be a relief for many charities wondering if there will be dramatic changes.



23) CRA’s Annual Report to Parliament 2009-2010 - has references to registered charities

The Canada Revenue Agency’s annual report to parliament is interesting reading. It has some references to the Charities Directorate, the Charities Partnership and Outreach Program, audits by the charities directorate etc.




Foreign Activities and CIDA


24) CIDA Launches Two Calls for Proposals under the new Partners for Development Program


There are now 3 CIDA calls for Proposals under the new Partners for Development Program.


25) Copy of Mark’s Presentation on new CRA Foreign Activity Guidance


Here is a copy of a presentation I have given on CRA’s Foreign Activity Guidance. It has been delivered in Calgary, Edmonton and Ottawa over the last couple of months. If groups are interested in trying to arrange such a presentation then let me know.



26) CIDA Call for Proposals (Muskoka Initiative Partnership Program)

Here is information from the Canadian International Development Agency (CIDA) Partnerships with Canadians Branch (PWCB) on a new $75 million “call for projects over $500,000 to take a comprehensive and integrated approach to address maternal, newborn, and child health (MNCH), under its Partners for Development Program.”




Ratios, Evaluating Charities and Smart Giving

27) Is fundraising by commission allowed or a good thing in Canada - part of the Great Debate


Recently there was a debate between Ken Mayhew, Dan Pallotta and myself on a number of issues surrounding compensation. Ken Mayhew and myself opposed commission based fundraising and Dan Pallotta supported it. There are a number of concerns with commission based fundraising, principal among them that it encourages aggressive short term behaviour by fundraisers that may undermine the reputation of their charity and the charitable sector.



28) How Much Should A Canadian Charity Spend on Overhead - an article by Mark Blumberg

Canadians are increasingly asking “How Much Should A Canadian Charity Spend on Overhead?” Is this the right question? In this article I discuss the shortcomings of using certain rations in evaluating charities.



Other

29) My presentations to the AFP Congress 2010 - Top Legal Issues and the Great Debate

Here is a copy of my presentation on Top Legal and Ethical Issues for Canadian Fundraisers and my slides for the Great Debate in which we discussed a number of issues relating to ratios, fundraising costs and compensation.



30) Article entitled “Third-party fundraising, boon or bust?” By Andy Levy-Ajzenkopf

Here is an article by Andy Levy-Ajzenkopf entitled “Third-party fundraising, boon or bust?” which discusses the issue of charities using third party fundraisers. http://www.charityvillage.com/cv/archive/acov/acov10/acov1037.asp



31) Xentel DM, telemarketer, hit with $500,000 fine for violating National Do Not Call List rules

The CBC notes in an article entitled “Telemarketer hit with $500,000 CRTC fine” that “The federal telecommunications regulator has hit a Calgary-based telemarketing firm, Xentel DM, with a $500,000 penalty for misusing the charity exemption to the National Do Not Call List rules.” Xentel DM Incorporated has recently changed its name to “iMarketing Solutions Group Inc."



32) Fiduciary Considerations Involving Charitable Property - presentation by Ken Goodman, Deputy PGT

Here is an interesting presentation by Ken Goodman entitled "Fiduciary Considerations Involving Charitable Property". It is important to remember directors of registered charities have to comply with BOTH the requirements of the Income Tax Act AND their fiduciary obligations.



33) Globe and Mail article “Ottawa gives Bill Clinton foundation special designation” by Paul Waldie

Here is an article by Paul Waldie on a rarely used category of qualified donee which are organizations that Her Majesty in right of Canada has made gifts to over the last two years and that are listed in an attachment to IC84-3R, Gifts to Certain Charitable Organizations Outside Canada. There are only about 5 organizations that are currently eligible for this status.



34) Maintaining Proper Books and Records: What You Need to Know from CCCC and Teresa Douma

I recently saw a great presentation on books and records from Teresa Douma, Senior Director, Legal Services for the Canadian Council of Christian. Charities. Maintaining adequate books and records is vital for accountability and properly running a charity, not just because the Income Tax Act requires it.



35) “Philanthropist Frank Giustra hit with tax penalty” reports Globe and Mail about Guistra charity

Private foundations in Canada have to comply with the “Excess Corporate Holdings” requirements introduced by Finance in the 2007 Federal Budget. Canadian private foundations that hold more than 2% of the issued and outstanding shares of any class of shares of a corporation at any time during their first fiscal periods beginning after March 18, 2007, must complete an Excess Corporate Holdings Worksheet and may in certain circumstances have to divest themselves of some shares or pay a penalty. This rule only does not apply to charitable organizations and public foundations, but only private foundations. Paul Waldie of The Globe and Mail reported that “A private foundation formed by mining financier Frank Giustra, who has won wide acclaim for his philanthropic work, has run afoul of federal tax authorities for violating investment rules governing charities. In a rare move, the Canada Revenue Agency has hit Mr. Giustra’s The Radcliffe Foundation with a $147,000 penalty for “excessive corporate holdings.”



36) CRA reviews two new disbursement quota scenarios

The letter from CRA discusses two disbursement quota scenarios in a gift from one charity to another related charity and depending on whether all or a portion of the gift is designated a “designated gift” how it will affect the disbursement quota obligations of the charities. I was wondering how CRA will deal with the issue of the new anti-avoidance provisions with the limited information provided as to the reasons for the transaction: “We note that the proposed amendments to paragraph 149.1(4.1)(a) and existing paragraph 149.1(4.1)(b) of the Act can subject donor and recipient charities to revocation of their registration if it may reasonably be considered that a purpose of the transaction was to avoid or unduly delay the expenditure of amounts on charitable activities. Whether any purpose of a transaction is to avoid or unduly delay the expenditure of amounts on charitable activities is a question of fact and must be determined on a case-by-case basis.”



37) CLIP Seminar Slides on CRA’s Fundraising Guidance, Top Legal Issues and Charitable Receipting

Here are my seminar slides on Understanding CRA’s Fundraising Guidance, Top Legal Issues and Charitable Receipting by Mark Blumberg prepared for the Charity Law Information Program (CLIP).



38) Determining the “Cost” of Life Insurance Policies as a Charitable Gift when transfer to charity

Here is a letter from CRA in response to a question about valuing a life insurance policy when it is transferred from a non-arm’s length person to a donor and subsequently gifted to a qualified donee. It deals with the deemed fair market value rules.



39) Ontario Not-For-Profit Corporations Act Receives Royal Assent

The Ontario Not-For-Profit Corporations Act received Royal Assent on October 25, 2010. Here is a copy of the Explanatory Notes and the Ontario Not-For-Profit Corporations Act.



40) CRA updates document “Employee or Self-Employed?” - make sure your staff are properly classified as either employees or independent contractors


Here is a copy of the updated document Employee or Self-Employed rc4110-10e.pdf from the CRA.


41) As this is the season for giving - here are some ideas for last minute procrastinators on how to effectively donate to a Canadian charity


The charity sector provides vital services and support in communities all over Canada. Here are a few tips to consider when donating to a Canadian registered charity. Hopefully this is helpful - but there is no science to donating - and I expect that not everyone will agree with the thoughts and this is a work in progress.




Notes


Upcoming Events

As noted above I will be delivering about 30 webinars over the next 3 months. For more information and a few of the topics see: http://www.globalphilanthropy.ca/index.php/blog/comments/upcoming_clip_webinars_online_internet_seminars_on_charity_law_fundraising_/Webinars


I am co-chairing a program entitled "Charity Corporate Changes and Avoiding Compliance Problems" which will be part of the OBA’s Institute 2011. For further information see http://www.globalphilanthropy.ca/index.php/blog/comments/ontario_bar_association_institute_2011_charity_corporate_changes_and_avoidi/ The OBA Institute is the largest continuing legal education event in Ontario. Lawyers may find this program helpful if they are interested in the new Ontario non-profit corporate legislation, the new federal Canada not for profit corporations act, avoiding problems with issuing receipts and class action lawsuits dealing with abusive charity gifting schemes.


Here is the upcoming UJA Federation of Greater Toronto 2nd Annual Charity Law Seminar for Jewish communal organizations on January 13, 2011 http://www.globalphilanthropy.ca/index.php/blog/comments/uja_federation_of_greater_toronto_2nd_annual_charity_law_seminar_for_jewish/

I will be presenting on a number of topics.

I will be speaking at the Strategy Institute 8th Annual Foundation, Endowment & Not For Profit Investment Summit being held in Toronto on January 18 - 19, 2011. My topic is Governance and Compliance Challenges for Foundations in 2011. For more information on the summit see http://foundationendowment.ca/


I will be giving a presentation on "Recent Legal Developments Affecting Registered Charities" for the Institute of Chartered Accountants of Ontario (ICAO).

Past Events

I delivered a number of presentations over the last few months from Vancouver to Montreal for CLIP. I also did some Online Charity Chats and Online Webinars.


I delivered workshops in Ottawa with Volunteer Ottawa on 1) Top CRA Compliance Issues for Canadian Registered Charities and their Directors and 2) Foreign Activities by Canadian Charities: CRA’s new Guidance on Activities Outside of Canada for Canadian Registered Charities


I presented 3 programs for the Institute of Chartered Accountants of Ontario (ICAO) including on Top Compliance Issues - Registered Charities, Directors, CAs; Charity Fundraising and Receipting Rules and Recent Legal Developments Affecting Registered Charities.


At the 2010 AFP Greater Toronto Congress I delivered 2 presentations including:
1) "Top 20 Legal and Ethical Issues for Canadian Fundraisers" on December 1, 2010 Speaker - Mark Blumberg

2) The Great Debate: Charity Ratios and Ranking on Thursday, December 2, 2010 with Dan Pallotta, Author/ Founder of Pallotta Teamworks, Mark Blumberg, Blumberg Segal LLP, Ken Mayhew, Chief Development Officer, Multiple Sclerosis Society of Canada, Susan Storey CFRE, Vice President, KCI (Ketchum Canada Inc.)


I delivered a presentation entitled “Selecting and Working with Canadian Charities as CSR Partners” at the 4th Annual Risk Mitigation & Corporate Social Responsibility (CSR) in Africa Conference organized by the Southern Africa - Canada Chamber of Business.


I also did a number of presentations for the CMAs in Ontario.



I hope that you found the above material helpful and please feel free to forward the e-mail newsletter to anyone you think may be interested. They can also sign up for the BLUMBERGS non-profit and charities law newsletter at http://www.canadiancharitylaw.ca/index.php/pages/subscribe/


For further information on legal resources for Canadian Non-Profits and Charities please visit www.canadiancharitylaw.ca or www.globalphilanthropy.ca


If you are on Twitter you might want to follow me at: http://twitter.com/canadiancharity Surprisingly I now have about 525 followers on Twitter.


If you want general information on registered charities in Canada you might find the archived webinars that were prepared for the Charity Law Information Program (CLIP) of Capacity Builders helpful http://www.globalphilanthropy.ca/index.php/blog/comments/webinars_on_canadian_charity_law_-_charity_law_information_program_clip_by_/


If you would like to retain our law firm for legal services or legal advice with respect to non-profits or charities, please contact me at .(JavaScript must be enabled to view this email address) or at 416-361-1982.



Mark Blumberg

—————————————————————————————
Mark Blumberg, B.A., LL.B., LL.M., TEP

Blumberg Segal LLP
Barristers & Solicitors
390 Bay Street, Suite 1202

Toronto, Ontario, M5H2Y2

Tel. (416) 361-1982 ext. 237
Toll Free 1-866-961-1982
Fax. (416) 363-8451
Email: .(JavaScript must be enabled to view this email address)

www.canadiancharitylaw.ca

www.globalphilanthropy.ca

You can follow me on Twitter at: http://twitter.com/canadiancharity

—————————————————————————————

November 25, 2010

New T1044 Form - Non-Profit Organization (NPO) Information Return and Guide for Canadian non-profits

The CRA has revised its T4117 Income Tax Guide to the Non-Profit Organization (NPO) Information Return and the T1044 Form - Non-Profit Organization (NPO) Information Return.  If an organization is a registered charity under the Income Tax Act they would not have to complete the form.

 

Non-profits only have to file the NPO information return if they are not registered charities and if
■ it received or was entitled to receive taxable dividends, interest, rentals, or royalties totalling more than $10,000 in the fiscal period;
■ the total assets of the organization were more than $200,000 at the end of the immediately preceding fiscal period (the amount of the organization’s total assets is the book value of these assets calculated using generally accepted accounting principles); or
■ it had to file a NPO information return for a previous fiscal period.

For copies of the form see:

http://www.cra-arc.gc.ca/E/pub/tg/t4117/README.html

October 25, 2010

Ontario Not-For-Profit Corporations Act Receives Royal Assent

The Ontario Not-For-Profit Corporations Act received Royal Assent on October 25, 2010.  Here is a copy of the Explanatory Notes and the Ontario Not-For-Profit Corporations Act.

Ministry News
Here is a press release from October 19, 2010:

Strengthening Ontario’s Not-For-Profit Sector
McGuinty Government Passes Not-For-Profit Corporations Act
NEWS
Ontario is making it easier for not-for-profit corporations to operate and do business in today’s marketplace while strengthening the economy and creating jobs.

The province’s Not-for-Profit Corporations Act passed third reading today in the Ontario Legislature. Upon Royal Assent the new legislation will provide Ontario’s 46,000 not-for-profit corporations with a modern, legal framework to:

enhance corporate governance and accountability
simplify the incorporation process
give more rights to members
better protect directors and officers from personal liability
allow not-for-profits to engage in commercial activities where revenues are used by the corporation in support of their not-for-profit purposes
The Act is based on extensive consultations across the province. This includes three consultation papers, a web advisory panel and regional workshops in Ottawa, London, Toronto and Thunder Bay attended by more than 200 organizations. 
The nonprofit sector employs more than 16 per cent of Ontario’s paid workforce. Supporting Ontario’s non-profit organizations is an important part of the government’s Open Ontario plan to grow key sectors of the economy and create a climate where business can thrive.

QUOTE
“Almost eight million Ontarians volunteer their time and effort to help not-for-profits relieve poverty, advance education, strengthen medical research, share faiths and build communities.  The Not-for-Profit Corporations Act will strengthen a sector that offers so much to so many.”
– John Gerretsen, Minister of Consumer Services

QUICK FACTS
The previous Corporations Act, which governed not-for-profit organizations was enacted in 1907 and last substantially updated in 1953.
Ontario’s volunteers contribute over 800 million hours a year.

For more information:

Christine Lall, Minister’s Office, 416-325-0238
Stephen Puddister, Communications, 416-326-7279

ontario.ca/consumerservices-news

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Backgrounder
Ontario’s Proposed Not-For-Profit Corporations Act
The proposed Not-for-Profit Corporations Act would provide a modern legal framework that addresses the needs of today’s not-for-profit corporations in Ontario.

Main highlights of Ontario’s proposed Not-for-Profit Corporations Act:
Simplifying the incorporation process. The current incorporation process is complex and lengthy, normally taking six to eight weeks to incorporate. Under the proposed new Act, incorporation could take only a few days.
Enhancing corporate governance and accountability by providing a statutory duty of care for directors; and, at the same time, providing specific protection from liability for directors.
Allowing not-for-profit corporations to engage in commercial activities where the revenues are used for the corporation’s not-for-profit purposes.
Providing for a less expensive review engagement or audit exemption in appropriate circumstances.
Harmonizing with other Canadian jurisdictions that have modern legislation, such as the Canada Not-for-Profit Corporations Act which received Royal Assent on June 23, 2009.
Enhancing member democracy by expanding member remedies to ensure directors are acting in the corporation’s best interests.
Increasing transparency for financial information and access to records.
Consultation
The Ministry of Consumer Services undertook extensive stakeholder consultations throughout the development of the proposed Act. Three consultation papers were developed to solicit opinions and regional workshops were held in Ottawa, London, Toronto and Thunder Bay attended by stakeholders from approximately 200 organizations. The Ministry also formed a web advisory panel to engage in online consultation with key stakeholders on preliminary policy recommendations. 

Government’s Commitment
The proposed Not-for-Profit Corporations Act meets the government’s commitment to business law modernization. It also supports:

Open for Business by streamlining operational and administrative requirements and improving the processing efficiency of applications.
Ontario’s Poverty Reduction Strategy by facilitating the operations of not-for-profit corporations focused on improving housing, education, food and employment assistance.
The Partnership Project: a consultative process to strengthen the relationship between the government and the not-for-profit sector, led by the Ministry of Citizenship and Immigration and the Ontario Trillium Foundation.
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Here is a copy of the act on the Ontario government website:
http://www.ontla.on.ca/web/bills/bills_detail.do?locale=en&BillID=2347&detailPage=bills_detail_the_bill&Intranet=

July 01, 2010

helping those who help others: Bill 65 (Ontario Not-for-Profit Corp. Act, 2010) - McMillan note

Here is a note by Wayne D. Gray and Lydia Wakulowsky of McMillan on Bill 65, the Ontario Not-for-Profit Corporations Act, 2010.  It provides a short summary of the legislation.

http://www.mcmillan.ca/Upload/Publication/Bill65_HelpingOthers_0610.pdf

June 29, 2010

CNCA - Canada Not-for-profit Corporations Act - draft regulations and consultation on regulations

Industry Canada last week released draft regulations for the CNCA, the new Federal non-profit act.  There is also a “Notice from the Director — Consultation on proposed Canada Not-for-profit Corporations Regulations” dated June 25, 2010 which contains an explanatory note and a “Consultation on proposed Canada Not-for-profit Corporations Regulations”.  Industry Canada is launching a consultation on proposed
regulations under the Canada Not-for-profit Corporations Act.  Industry Canada has requested that comments on the Canada Not-for-profit Corporations Act (CNCA) be submitted by October 1, 2010.

Here is a Notice from the Director on the Consultation on draft Canada Not-for-profit Corporations Regulations
http://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/cs04589.html

Here is the explanatory note from Industry Canada:
http://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/cs04590.html

The draft regulations at:
http://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/cs04591.html

Here is a PDF of the draft regulations: http://www.ic.gc.ca/eic/site/cd-dgc.nsf/vwapj/Consultationdraft-BIL-170610.pdf/$FILE/Consultationdraft-BIL-170610.pdf

 

May 22, 2010

Official Notice of Fee Proposal For Services under the Canada Not-for-Profit Corporations Act (CNCA)

Here is the “Official Notice of Fee Proposal For Services under the Canada Not-for-Profit Corporations Act”.  This notice which is required under the User Fee Act gives the public and idea of what fees are proposed for the CNCA - these may or may not be the final .  Nothing looks too out of the ordinary.  Perhaps a $40 fee for non-electronic filing of the annual return is a little much - but then again I think the message these days is do it electronically.  One thing that this process raised for me - if you are a federal non-profit (whether charitable or not) you pay all these fees to Industry Canada for the benefit of having incorporated federal non-profit status but why is it that you don’t have to pay any fees to the Charities Directorate when you apply for charitable status or for almost any other services they provide? 

The US IRS charges $850 to apply for 501(c)(3) status which is similar to our registered charity status?  Most of the time when you don’t pay for something you don’t appreciate the value of it.  Perhaps charging a fee for charitable registration, like $200, would make some organizations think more carefully about applying and the obligations of being a registered charity.  Also the funds could be ploughed back into improving the operations of the Charities Directorate - everything from reviewing applications, having consultations and providing guidance on issues affecting charities, answering charity inquiries and going after scam charities, etc. 

http://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/cs04533.html

Notice from the Director - Official Notice of Fee Proposal
PDF version (13.8 KB, 1 page)
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May 10, 2010

Official Notice of Fee Proposal
For Services under the Canada Not-for-Profit Corporations Act

Corporations Canada wishes to inform you that the official notice on the fees proposed under the Canada Not-for-Profit Act (Bill C-4) and the associated service standards has been published in the Canada Gazette, Part 1 on May 8, 2010.

Bill C-4 received Royal Assent on June 23, 2009. Consultations on the proposed fees and services standards were held from January 4 to February 5, 2010. The Official Notice of Fee Proposal is a required step under the User Fees Act to allow stakeholders to submit official complaints. Complaints may be resolved by an independent review panel. Once all complaints are resolved, the proposed fees will be tabled in the House of Commons and Senate for 20 sitting days for review. Once the User Fees Act process is complete, the proposed regulations which include the fees will then go through the regulatory process. This process involves pre-publication of the proposed regulations in the Canada Gazette, Part I before final approval can be obtained from Treasury Board.

You can obtain the Official Notice of Fee Proposal for Services under the Canada Not-for-Profit Corporations Act :

•on the Corporations Canada’s Website under the heading “What’s New” in the left hand menu;
•on the Canada Gazette website at http://www.gazette.gc.ca
•by contacting Corporations Canada directly at 1-866-333-5556 to obtain a copy by mail.
Comments on the proposed fees or service standards may be submitted to Corporations Canada by May 28, 2010. For further information, call 1-866-333-5556 or send an e-mail to .(JavaScript must be enabled to view this email address).

Aissa Aomari
Acting Director General

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http://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/cs04534.html

Official Notice of Fee Proposal For Services under the Canada Not-for-Profit Corporations Act
PDF version (31.79KB, 3 pages)

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May 8, 2010

Purpose
This Official Notice of Fee Proposal is one of the steps required by the User Fees Act in order to set fees for services under the new Canada Not-for-Profit Corporations Act. Interested persons have 20 days following the publication of this notice in the Canada Gazette, Part I, to make an official complaint regarding the proposed fees and service standards.

Background
The Canada Not-For-Profit Corporations Act received Royal Assent on June 23, 2009. This Act will replace the Canada Corporations Act and provides a modern corporate governance regime for federal not-for-profit corporations. Before the NFP Act can come into force, the fees have to be first established in accordance with the process set out in the User Fees Act after which the regulations must then be approved by the Governor-in-Council.

Consultations on the proposed fees were held from January 4 to February 5, 2010.  Two comments were received. The first one stated that the proposed fees, costing methodology and service standards were fair and reasonable. The second one also supported the fee proposal and service standards.

Proposed Fees and Service Standards
The fees below are proposed for the services under the new Canada Not-for-Profit Corporations Act.

Receipt, Acceptance, Examination, Issuance or Copying of any Document and Other Actions under the Canada Not-for-Profit Corporations Act
 

Fee
Service Standards
Application sent to the Director for the following documents:
 
 
(a) a certificate of incorporation under section 9:
 
 
i) if the application is made using Industry Canada’s online incorporation feature (when available)
$200
  24 hours
ii) if the application is made using any other means
$250
5 business days
(b) a certificate of amendment under section 201 or subsection 215 (5)
$200
5 business days
(c) a restated certificate of incorporation under subsection 203(3) (unless issued with a certificate of amendment)
$50
5 business days
(d) a certificate of amalgamation under subsection 208(4)
$200
5 business days
(e) a certificate of continuance under subsection 211(5) (unless subsection 212(6) applies)
$200
5 business days
(f) a document evidencing satisfaction of the Director, as required under subsection 213(1)
$200
5 business days
(g) a certificate of arrangement under subsection 216(6)
$200
5 business days
(h) a certificate of revival under subsection 219(3)
$200
5 business days
(i) a certificate of revocation of intent to dissolve under subsection 221(11)
$50
5 business days
(j) a corrected certificate under subsection 288
$200
20 business days
Application sent to the Director for issuance of a certificate of compliance under subsection 290(1)
$10
1 business day
Application sent to the Director for issuance of a certificate of existence under section 290
$10
1 business day
Receipt of an annual return sent to the Director under section 278:
 
 
(a) if the annual report is filed using Industry Canada’s online incorporation feature (when available)
$20
N/A
(b) if the annual return is filed using any other means
$40
N/A
Application for exemption sent to the Director under subsection 2(6), 25(1), 25(2), 104(3) or 171(2), or section 173 or 271
$250
30 days
Provision by the Director of copies of documents under subsection 279(2)
$1 per page
1 business day or 6 business days for inactive corporations
Provision by the Director of certified copies of documents under subsection 279(2), per document
$35
1 business day or 6 business days for inactive corporations

Notes:

1.No fee will be charged for an application for a certificate of amendment if the only purpose of the amendment is to add an English or French version to the corporation’s name, or to replace a corporate name that the Director has directed to be changed under subsection 13(2).
2.No fee will be charged for a certificate of dissolution issued under subsection 220(5) or 221(15) nor for a certificate of intent to dissolve issued under subsection 221(5)
3.No fee will be charged for a corrected certificate issued under section 288 where the correction is required solely as the result of an error made by the Director.
Official Notification Period
The period within which complaints may be submitted begins on May 8, 2010 and ends on May 28, 2010.

Complaint Process
An official complaint may be made to Corporations Canada by email, fax or mail. Corporations Canada will attempt to resolve any complaints received and provide a proposed resolution in writing. If a complaint cannot be resolved to the complainant’s satisfaction within 30 days of the expiry of Official Notification Period, the complainant may make a request in writing that Corporations Canada refer the complaint to an independent advisory panel.

The User Fees Act stipulates that the regulating authority and the complainant must each select one member to sit on the panel and those members must select a third member within 40 days of the expiry of the Official Notification Period. The panel must, within 30 days after all members have been selected, send a report in writing of its findings and recommendations for resolving the dispute to the regulating authority and the complainant.

The panel has the power to award costs of the proceedings, including the cost of the fees and expenses of panel members. If, in the opinion of the panel, a complaint is frivolous or vexatious, the complainant bears all the costs.

Contact Details
Corporations Canada
Jean Edmonds Towers South
365 Laurier Avenue West
Ottawa, ON K1A OC8
E-mail: .(JavaScript must be enabled to view this email address)
Fax : 613-941-5781

Supporting Documents
For more information on how the fees were determined, you may wish to refer to the consultation documents which are available on the Corporations Canada website at http://www.corporationscanada.ic.gc.ca.

It is also possible to obtain a paper copy by communicating with Corporations Canada at 1-866-333-5556.

Corporations Canada
Industry Canada