Blumbergs Canadian Charity Law List - January 2009 - the Budget, CRA Audits, Political Activities

February 01, 2009 | By: .(JavaScript must be enabled to view this email address) Mark Blumberg
Topics: Canadian Charity Law

1) Budget Disappointment - Unfortunate but not surprising The 2009 Federal Budget had nothing specific in it for charities that I can see.  There is tremendous disappointment amongst some “sector representatives” and others who had called for further tax incentives for donors who donate to charity.  Could the federal government’s reluctance to provide more to the charitable sector have something to do with: a)  concern that the tax base not be further eroded to pay for existing obligations with respect to programs; b) some very questionable positions taken by some of the government relations committee of some of these so called “sector representatives” over the last year or two;  and/or c) the composition of some of these committees?    It is interesting, although not contained in the budget, that Finance has confirmed to the CCIC, that the 8% increase in ODA (‘foreign aid’) will be maintained, but not increased to 15% as some had wanted to help the world’s hardest hit.  Other than direct spending in areas that will have direct results, the best thing that the federal government can do is continue its crackdown on abusive charity gifting schemes that are costing billions of dollars in revenues.  With the extra revenue the government can fund universities, hospitals, infrastructure, international development etc.  A few are starting to wonder whether it makes any sense to provide additional tax incentives primarily for a small number of large donors, because when you add up the government subsidies of donations of 40-60 cents per dollar plus charities’ fundraising costs which can exceed 30-50 cents per dollar one realizes that grants and contributions by the government to charities may in some cases be preferable and far more efficient than donations.  Now would be a good time for some organizations to take stock of what they have done and who they involve in representing them.  I am very concerned that our sector is being “led” in the wrong direction by some professional advisors and “fundraisers” who seem to be quite comfortable making huge amounts of money off abusive charity gifting schemes that undermine the public’s confidence in the sector and make it far harder for legitimate charities to obtain funding.  The reason I say “led” in quotations is that few are actually following the “leaders”.  Any thoughts, comments or suggestions would be appreciated because I will try and write a proper article on this point.

2) New 2008 T2050 Application to Register a Charity: A Discussion of the changes This article discusses the changes in the New 2008 T2050, Application to Register a Charity Under the Income Tax Act, and the guide T4063 Registering a Charity for Income Tax Purposes.

3) Canadian Charities and political activities Here is a copy of my presentation to the Ontario Council for International Cooperation (OCIC) on political activities by Canadian charities.  In order for Canadian charities to effectively achieve their objects or mandate they often need to engage in some “political” activities, especially when the objects or mandate require the assistance and support of government to be accomplished.  It is important for Canadian charities to understand the types of activities that are allowed and those that are prohibited.  It is especially important if we head to an election anytime soon.  OCIC is a community of Ontario-based international development and global education organizations working globally for social justice.

4) Canada Revenue Agency (CRA) Audits and Canadian Registered Charities This article provides information and suggestions as to how a Canadian charity should, and should not, deal with CRA audits.  It also discusses possible CRA responses and the likelihood of each response.

5) Recent case on the revocation of a Canadian registered charity and business activities - Hostelling International Canada This article deals with the recent Canadian Federal Court of Appeal case Hostelling International Canada - Ontario East Region in which the Federal Court of Appeal upheld the CRA decision to revoke the charitable registration of a youth hostel that had registered charitable status for 35 years.  The youth hostel was in fact in the opinion of the court a commercial business and not a charity.

6) Why a major gift combined with a bequest to a charity may be more tax effective than just a bequest This short note discusses why a major gift combined with a bequest to a Canadian registered charity may be more tax effective than just a bequest to that same charity.

7) Canadian Foundations and Tough Economic Times - A Comment In this comment, I encourage foundations to be more active in the current difficult economic times.

8) Zimbabwe Sanctions and Canadian Charities Canadian charities operating in Zimbabwe need to be extremely careful.  It is not the place for a new and inexperienced charity to begin foreign operations.  In fact, only Canadian charities with substantial experience in difficult international operations should even consider operating in Zimbabwe.  It is one of the most difficult countries to carry out charitable operations by virtue of the very difficult political, security, human rights and economic situation and the resultant Canadian and international sanctions.  This article will set out some information on the Zimbabwe Sanctions including the full text of the Act and Regulations governing the sanctions.

9) Top Ten Canadian Charity Law Issues - Revised November 2008 Here is my updated list of Top Ten Canadian charity law issues.  Although there are many important and interesting legal issues that Canadian charities face, these are some the most important issues to focus on before getting lost in the charity law forest.  Actually the charity law forest is now only a couple of trees.  The rest were cut down to publish articles on obscure legal issues.

10) New T3010B and questions on foreign activities A draft of part of the new T3010B was included in an organization’s bulletin.  Here is a copy of the part relating to foreign activities with some of my comments in red. Notes Globalphilanthropy.ca gets global attention.  The Newsletter “Global Giving Matters” published by The World Economic Forum and the Synergos Institute recently profiled globalphilanthropy.ca, along with one other organization, Alliance magazine, under the heading “Activities, websites and other cutting-edge information for global givers”.  We modestly and humbly accept any praise, it does not have to be from large well respected organizations!! The Canadian Fundraiser published an article of mine on http://www.canadianfundraiser.com/newsletter/article.asp?ArticleID=2844 on charities making the most of a lawyer. I attended as a representative of Water For People Canada a three day program organized by OCIC and CIDA entitled “Voluntary Sector Capacity Building Workshop: Promoting Effective Partnerships with CIDA”.  It was very interesting and informative workshop on CIDA’s Voluntary Sector Fund.  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, among other newsletters, at Blumbergs’ Newsletter Page For further information on legal resources for Canadian Non-Profits and Charities please visit the Blumbergs’ Canadian Non-Profits and Charities page or www.globalphilanthropy.ca If you require legal services or legal advice with respect to non-profits or charities please contact me at //';l[1]='a';l[2]='/';l[3]='<';l[4]='|97';l[5]='|99';l[6]='|46';l[7]='|115';l[8]='|103';l[9]='|114';l[10]='|101';l[11]='|98';l[12]='|109';l[13]='|117';l[14]='|108';l[15]='|98';l[16]='|64';l[17]='|107';l[18]='|114';l[19]='|97';l[20]='|109';l[21]='>';l[22]='"';l[23]='|97';l[24]='|99';l[25]='|46';l[26]='|115';l[27]='|103';l[28]='|114';l[29]='|101';l[30]='|98';l[31]='|109';l[32]='|117';l[33]='|108';l[34]='|98';l[35]='|64';l[36]='|107';l[37]='|114';l[38]='|97';l[39]='|109';l[40]=':';l[41]='o';l[42]='t';l[43]='l';l[44]='i';l[45]='a';l[46]='m';l[47]='"';l[48]='=';l[49]='f';l[50]='e';l[51]='r';l[52]='h';l[53]=' ';l[54]='a';l[55]='<'; for (var i = l.length-1; i >= 0; i=i-1){ if (l[i].substring(0, 1) == '|') document.write("&#"+unescape(l[i].substring(1))+";"); else document.write(unescape(l[i]));} //]]> "> or at 416-361-1982 x. 237 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 Fax. (416) 363-8451 Email: //';l[1]='a';l[2]='/';l[3]='<';l[4]='|97';l[5]='|99';l[6]='|46';l[7]='|115';l[8]='|103';l[9]='|114';l[10]='|101';l[11]='|98';l[12]='|109';l[13]='|117';l[14]='|108';l[15]='|98';l[16]='|64';l[17]='|107';l[18]='|114';l[19]='|97';l[20]='|109';l[21]='>';l[22]='"';l[23]='|97';l[24]='|99';l[25]='|46';l[26]='|115';l[27]='|103';l[28]='|114';l[29]='|101';l[30]='|98';l[31]='|109';l[32]='|117';l[33]='|108';l[34]='|98';l[35]='|64';l[36]='|107';l[37]='|114';l[38]='|97';l[39]='|109';l[40]=':';l[41]='o';l[42]='t';l[43]='l';l[44]='i';l[45]='a';l[46]='m';l[47]='"';l[48]='=';l[49]='f';l[50]='e';l[51]='r';l[52]='h';l[53]=' ';l[54]='a';l[55]='<'; for (var i = l.length-1; i >= 0; i=i-1){ if (l[i].substring(0, 1) == '|') document.write("&#"+unescape(l[i].substring(1))+";"); else document.write(unescape(l[i]));} //]]> "> http://www.blumbergs.ca/non_profit.php http://www.globalphilanthropy.ca/ —————————————————————————————

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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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